Tired of watching the market plunge every day at 3:55pm? Concerned that money market funds might break the buck? Nervous from watching the hedge fund managers in Greenwich out seeking a new line of work? So, what other investment options are out there? How about... models?
Taking a cue from reality series like America's Next Top Model and Project Runway, a new website, Beauty Holding, offers the opportunity for anyone to invest in the future earnings potential of fashion models. Beauty Holding combines elements of social media, reality shows, fantasy sports teams and investment into a single site. Users invest funds to "sponsor" the model of their choice. Once a model receives $10k in sponsorship, her career is "launched" with the creation of a professional portfolio and introduction to various modeling agencies. Sponsors receive a 50% share of the model's first year net earnings.
So, is this a path to easy money? According to Beauty Holdings, an actively working professional model makes at least $50-100k per year with successful models exceeding $250k.
According to Beauty Holdings' Ingrid Devatova (herself a former model and director of a modeling agency), the website generates revenues in three ways:
1. Model booking fees and agency commissions
2. Internet advertising
3. Interest earned from sponsor float balances
The site recently launched and already has two models with sponsorship levels in the $3k range. They expect their first model to achieve the level of "golden beauty" ($10k in sponsorships) within the next few months and project 7-10 additional "golden beauties" in the following year.
So, is Beauty Holding a good investment? Well, I'm a bit of a skeptic. It seems to me that if I sponsor someone's launch into the business, I'd like to see some residual earnings beyond their first year. If I'm an angel investor in a business, I wouldn't settle for a piece of the first year's revenues.
That being said, I'd much rather admire the images of this portfolio than be staring at a depressed Jim Cramer at the closing bell.
