Back in February, we saw yet another celebrity participate in a tech investment—R&B superstar Ne-Yo. He invested in Holberton School and took part in a $2.3 million round for the coding school. It is too early to judge whether this is a strong investment that will grow and produce a worthwhile exit for the producer and singer. On a positive note, he is joining the board as a trustee with the goal of attracting people from underrepresented groups to learn how to code, something both Nas and Tristan Walker are contributing to as well, with initiatives such as Code2040. Holberton has made it accessible for people from diverse backgrounds by differentiating from other coding schools, as there is no fee upfront, but rather money deducting from your first three years of working (17%) in order to pay the costs. This sets up an incentive structure, whereby it is in their best interest to help successful students get a job after they graduate.
Finding His Niche
This article is about a music mogul, but he is not a producer, singer or rapper. It is someone more known for pulling strings behind the scenes—Troy Carter. This article will walk through how Troy discovered and cultivated Lady Gaga for nearly a decade before getting fired, to how he has gone on to co-founding Cross Culture Ventures (CCV). In between, he invested in companies such as Dropbox, Afrostream, Warby Parker, Lyft and Uber with his company, Atom Factory, as well as appearing on the hit US show, Shark Tank. But let’s start by introducing who he is and how he got started.
Troy dropped out of college, to the dismay of his mother, at only 17 years old in 1990, and like many young men out in Philadelphia, he aspired to be a rapper.
No surprise his track on YouTube has over 14,000 views by the time of this article. Surprisingly, he had the opportunity to demo this track to Jazzy Jeff, Will Smith and their long term manager, James Lassiter. Although Troy didn’t get signed in the 90’s based on his performance, it was a start of his journey in the music business, as James took him on as an apprentice and flew him out to work in LA as a personal assistant. After five years, he moved back to the east coast. Forming lasting relationships from here on become one of Troy’s key strengths. In New York, he went on to intern for Bad Boy Records for just under two years, working with the likes of The Notorious B.I.G. and Diddy. He then moved back to LA to work with James again. Barely in his 20s yet, Troy was loving the LA lifestyle, aka the sun, parties and girls. The lifestyle was actually costing him a fortune in expenses, as he was renting cars to live the fast life, and when James found out, he was soon sacked as a result.
Lessons from Philly
Feeling dejected and with financial woes on his back, Troy returned to Philly back where he started, but unsure what his next step would be. Two things were apparent though, from his experience he knew:
1. He was not destined to become a rap sensation.
2. He admired artist management.
Growing up in urban areas, such as Philly, means there are certain "codes of conduct" you live by, like loyalty and having a sense of family, like relationships with friends. Eve was a friend like that to Troy, so when she reached out to him looking for help on finding a manager, he took on the challenge himself. Immediately, he felt like a steward and a protector to some degree, as if Eve was his younger sister. This sense of investment on his side played to his strength and her best interests, as he was always looking out for her in deals and negotiations.
In terms of achievements, what was quite unique about Troy’s management of Eve is that she was not only an Grammy award-winning rapper, but she transcended rap to act in films such as Barbershop, and her on a hit TV show named after herself. In 2004 after all this, he sold his management company to British owned Sanctuary Records, earning him over two million in the deal. This, of course is a life changing amount, but after buying a house with his wife, taxes and investing into his new company, he was back on his bottom in Philly again. To make matters worse, Eve decided to part ways with her long time friend, Troy. The deal with Sanctuary went sour, and Troy’s car was repossessed, whilst the financial crises of 2007–2008 took his house for ransom too. However, in these difficult moments, when backed into a corner, Troy reverted back to his hustling roots from Philly, and had to maneuver out of this position, leveraging his relationships and expertise in management.
From Music to Startups
Facing eviction from his home, record producer Vincent Herbert, who had just left Universal Records, introduced Troy to a new client, the then unknown and dropped from Def Jam, Lady Gaga. She was in a desperate state at the time as her father allowed her to use only one year out of college to explore a career in music. The experience managing Lady Gaga exposed Troy Carter to the rift and opportunity that existed between music and technology. Like Chamillionaire, he built a direct to consumer relationship, globally leveraging tech, specifically social media, such as Twitter and YouTube to build Lady Gaga’s cult following. He went on to manage other successful artists such as John Legend and John Mayer. Troy built his network out in Silicon Valley and began to be invited to sit on boards before trying his hand at investing himself. He took on the role of Head of Creator Services at Spotify in June 2016 in a bid to battle other rising streaming services from Apple, Soundcloud and Tidal. To date, he has over 100 investments under his belt including Uber, Lyft, Dropbox and Warby Parker. I don’t think he will be returning broke to Philly for a third time any time soon.
In 2016, he founded Cross Culture Ventures (CCV) alongside his investment team, which includes Marlon Nichols, Trevor Thomas and Suzy Ryoo. The diversity of team ranges from experiences in branding, music, angel investing and marketing. I love their motto, “Our diverse skill set is a key asset and major differentiator.” The resiliency and tenacity Troy has shown throughout his career is the same attributes he looks for within his founders. CCV focus on cultural shifts when assessing early stage startups, investing up to $500k. Shifts such as the fact that the minorities will be the majority of the US population by 2040. This creates compelling opportunities for founders as demonstrated by Tristan Walker with Bevel. For example, CCV has invested in Nairobi based mSurvey, looking at diverse communities and founders beyond US borders. Another of their investments is Oakland born Mayvenn, which is a mobile platform aimed at black stylists and salon owners in the US.
Remember, less than one percent of VC backed startups are black-owned, which demonstrates why we need investors such as Troy Carter to help bring a diversity of thought to the market, and improve tech inclusion.