This document provides best practices for celebrity investments and endorsements. It discusses identifying the right celebrity investor or endorsement partner by analyzing which celebrities appeal to a company's target demographics. It also covers structuring celebrity investment deals, including equity terms and tax implications. For endorsements, it discusses determining budget, desired outcomes, and drafting deal terms around exclusivity, payments, approvals, and obligations of both parties. The goal is to strategically leverage a celebrity's influence while protecting the company through clear agreements.

1. CELEBRITY INVESTMENT
& ENDORSEMENT
BEST PRACTICES
Speakers
Andrew Apfelberg, Todd Jacobs, Scott Manson & Katy Spillers
© Greenberg Glusker 2013

2. Picking The Right Investor
• Identification of your company’s primary need – capital or sweat
equity/endorsement partner
• If capital providers are a primary focus:
• Analysis of celebrities who are active in your companies space
• Identification of decision-makers who invest celebrity dollars, e.g.
business managers, accountants, family offices
• Potential strategies for targeting a group of celebrities with common
interests/associations, e.g. a business manager that works with
multiple celebrities
• Tailoring your company’s business plan/pitch to appeal to celebrity
investors, e.g. charitable angle/mission-based investing, synergies with
existing endorsement deals etc.
• Practical considerations:
• celebrity investors may require more lead time, especially if there
are multiple individuals that need to sign off on deal
terms/documents
• it is still important to confirm accredited investor status;
“celebrity” is not equivalent with an accredited investor.

3. Investment Transaction
• If your company is willing to issue equity in exchange for endorsement services:
• Consideration of type of equity: restricted stock, warrants, options
• Consideration of size of equity grant:
• allocation of option pool
• market terms for celebrity equity grants
• Consideration of tax implications of equity grants
• Helping celebrities understand 83(b) elections
• Potential tax deductions for companies
• Consideration of terms of equity:
• Strike Price
• 409A considerations
• Vesting schedules
• Consideration of services required in exchange for equity
• Term
• Deliverables/Milestones
• Exclusivity
• Confidentiality concerns
• Press Release language; Ability to list celebrity as an advisor/affiliate.
• Work made-for-hire/IP assignment clauses if services will result in actual
deliverables

4. Picking The Right Endorsement
• Analysis of company/product’s core demographic and role/stage in
strategic plan
• Analysis of celebrities that have influence with core demographic
• Analysis of aspiration demographic and desired future elements of strategic
plan
• Analysis of celebrities that have influence with aspirational demographic
• Finding intersection with core demographic
• Finding different roles for different celebrities
• Who are the stakeholders in this arrangement other than your customers
and prospects
• Determining appropriate budget and components
• Being clear on what the company wants from the celebrity and prioritizing
• How to reach out credibly to the celebrity
• Issues/items that the celebrity will want to know and best way to present
them
• What does the celebrity want to get out of the relationship

5. Endorsment Transaction
• Difference between licensing, endorsement and brand ambassador
relationship
• Typical deal terms
• Exclusivity
• Territory
• Length of relationship
• Permitted use of celebrity’s name, likeness, image and other
intellectual property
• Approvals / veto power
• Promotional efforts and personal services by the celebrity
• Actions to be taken by the company
• Financial
• Risk allocation
• Custom deal terms for your company
• Terminating a deal that does not work and extending arrangements that
are productive

6. Endorsment Transaction
• Difference between licensing, endorsement and brand ambassador
relationship
• Typical deal terms
• Exclusivity
• Territory
• Length of relationship
• Permitted use of celebrity’s name, likeness, image and other
intellectual property
• Approvals / veto power
• Promotional efforts and personal services by the celebrity
• Actions to be taken by the company
• Financial
• Risk allocation
• Custom deal terms for your company
• Terminating a deal that does not work and extending arrangements that
are productive