Bono has been backing Elevation Partners, a private-equity firm that specializes in funding tech companies, since 2004. Elevation has shoveled money to Facebook (good!), Yelp (pretty good!), Palm (not so good) and others; earlier this year, the company announced its intent to raise $1 billion for a new fund. Justin Timberlake is another artist who has turned his attention to Silicon Valley – last year, he joined Specific Media owner-brothers Tim and Chris Vanderhook in their $35 million investment into the once-mighty MySpace.
Potential payday: Varies wildly.
Downsides: Investments are always risky. "If they want cash, that sets my alarms off," Stiffelman says. "Then I say, 'Okay, who else is putting money in, what are they raising, what's the model, who's the investor?' If they lose all this money, is this going to have a material impact on their solvency?"
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