Mind your business: Influencers as entrepreneurs

KSI turned his YouTube fame into music, then boxing, before co-founding the hugely hyped Prime Hydration drink. 

The Love Island star Molly-Mae Hague rose from reality TV to influencer stardom, before moving into business as creative director of PrettyLittleThing and eventually founding her own tanning brand, Filter by Molly-Mae. 

David Beckham, one of the most recognisable footballers in the world, built on his sporting legacy to create a global portfolio spanning Inter Miami CF to Haig Club whisky.

These examples show how major influencers, athletes and brand ambassadors are no longer just public personalities. Many are now entrepreneurs, directors and investors in their own right, and it is something we are seeing far more frequently in our due diligence reporting. While the shift is striking, it is hardly surprising. With their reach, appeal and millions of ready-made customers, they have platforms primed to generate serious money.

For brands, these extra revenue streams and added profile may seem attractive at first, but they can come with strings attached. Behind the glossy feed there can be financial or business issues hidden from view, and those risks can land squarely on a partner brand. Due diligence therefore should not be limited to fake followers, value checks or a scan for negative press. It needs to dig deeper into financials, corporate records and other business factors which have the power to damage reputations. 

And, let’s not forget, the bigger an influencer’s business empire grows, the greater the chance of tangled interests which could compromise a partnership.

Hidden risk in influencers’ corporate records

Conflict of interest

Wahed Invest, a US-based investment platform, used a professional footballer to endorse its services without making clear that he was paid in company stock worth around $500,000. On the face of it, it looked like an independent endorsement but in reality, the footballer had a direct financial interest in the business. Undeclared ownership of this kind can mislead audiences, undermine credibility and create reputational risk for any brand involved.

Financial mismanagement

Company records can flag dissolved businesses, overdue filings, debts or bankruptcies. These issues raise questions about financial stability and whether someone is a safe long-term partner.

Rapper and entrepreneur 50 Cent filed for bankruptcy in 2015 after being ordered to pay $5 million in damages in a court case. His filing listed assets and liabilities between $10 million and $50 million. The story was widely covered in the press, with headlines mocking the irony of a rapper named after money going bankrupt, and questioning the stability of his wider business ventures.

Former world heavyweight champion Mike Tyson also filed for bankruptcy in 2003, despite career earnings of around $400 million. Media coverage focused on his extravagant spending and poor financial management. His history of legal problems and controversial behaviour only added to the scrutiny. This shifted attention away from his sporting legacy and on to his financial troubles.

Headlines around debt and bankruptcy tend to make headlines and have the potential to overshadow other achievements, leaving partner brands in the fallout.

Undeclared commercial ties

Kim Kardashian was fined $1.26 million by the US Securities and Exchange Commission in 2022  for failing to disclose she was paid to promote EthereumMax on Instagram. 

Some influencers or athletes hold roles or interests in companies that may overlap with competing products or revenue streams. If these connections are not transparent, they can create the perception of conflict and invite scrutiny.

Footballers’ image rights companies are a good example. Wayne Rooney’s agreement with Proactive Sports Management, managed through his company Stoneygate, ended up in the High Court. The judge ruled parts of the long-term contract unenforceable on restraint of trade grounds. There was no suggestion of wrongdoing by Rooney, but the case drew media attention to the opaque and sometimes complex structures around players’ commercial arrangements.

Business collapses

Even though an influencer or celebrity might have millions of followers, it doesn’t make their business immune from failure. 

An example of this is Jaclyn Hill Cosmetics. The beauty influencer launched her own brand in 2019, but early product batches were criticised by customers for contamination and quality issues. The backlash on social media was immediate and intense, damaging Hill’s credibility with her audience. In 2023 the parent company, Forma Brands, filed for bankruptcy and the cosmetics line was shut down.

Why your brand should care

Reputational damage: When a high-profile individual faces financial or legal problems, the impact is rarely contained to just them. These issues can spill over into any brand they are associated with, putting reputations and partnerships at risk.

Undermine campaigns: Negative press around debts, bankruptcies or other financial concerns can quickly undermine a campaign. A brand that has invested heavily in an endorsement may suddenly find its messaging overshadowed by headlines about unpaid creditors or business failures.

Regulatory exposure: There is also the regulatory dimension; undeclared commercial interests can raise questions under competition law, while a lack of transparency in advertising risks breaching ASA guidelines. Both can lead to scrutiny which damages trust with consumers and regulators.

Undermine credibility: Conflicts of interest are another important factor. A wellness influencer may appear to be an authentic advocate for a supplement brand, but if they are also a director or shareholder in a competing nutrition company, the partnership is compromised. These situations are often invisible at first glance, which is why careful checks are so important. In our own due diligence reporting, we regularly uncover cases where an influencer’s financial background or business interests present risks that are far from obvious in their public profile.

All of these risks can hit the bottom line, derailing campaigns, wasting investment and eroding long-term returns.

Protect partnerships through due diligence

In the UK, systems such as Companies House make it relatively straightforward to see whether an individual is a director of active or dissolved companies, whether filings are overdue or whether there are concerns such as outstanding debts. County court judgements, bankruptcy filings and individual voluntary arrangements also provide useful signals about financial stability. Cross-referencing shareholdings can reveal links to suppliers, competitors or other businesses which  may create conflicts of interest.

However, while corporate records can be revealing, they rarely tell the whole story. Some public figures operate through elaborate company structures which make it difficult to see who ultimately controls or benefits from a business. Others use offshore vehicles or nominee directors, which can obscure ownership. In these cases, information may be fragmented, incomplete or deliberately opaque. This is where additional checks, sometimes involving manual on-the-ground research, become important. Speaking to former business partners, reviewing litigation histories or examining overseas filings can surface risks that a desktop search would never uncover.

These checks are not a one-off exercise. Brands should review corporate records before signing contracts, but also continue monitoring during long-term partnerships. Contracts can include clauses which require influencers to disclose new business ventures or potential conflicts. This ensures brands are not blindsided if an influencer launches or invests in a competing company after a deal has begun.

You may be thinking this sounds like a lot of effort. In reality, the effort upfront is far less costly than dealing with a reputational crisis once a campaign is live. Finding red flags early allows you to walk away or renegotiate before any damage is done. Treating influencers and ambassadors with the same level of due diligence as any other commercial partner helps to identify potential issues early and reduce the risk of problems arising later in the partnership. 

If you want to understand more about the potential risks posed by influencers and ambassadors partnerships, speak to our team.