The rapper-turned-entrepreneur sees cash money in the commodity’s boom.
MC Hammer has had many professional careers: he’s been a preacher, a rapper, and a tech entrepreneur.
Now the pioneer of the parachute pants has an equity stake in Cash4Gold, a Pompano Beach-Fla., refinery. Customers who send in their gold—grandma’s necklace, dad’s watch—will receive an estimate of its worth. If they’re happy with the estimate, they get a check.
With the price of gold hitting new highs, it’s hardly surprising that pawnshops are flourishing. Cash4Gold claims to be the first such service to operate fully online; indeed, its backers include a handful of tech venture capital firms, including Luxembourg-based Mangrove Partners ( an early backer of Skype) and Boston’s General Catalyst and Highland Capital Partners.
Hammer (nee Stanley Burrell) says it’s not far from his technology passions. “If you don’t think this is a technology driven business,” he says, “what do you think it takes when we have 5000 pieces of gold in a warehouse and one person asks for their piece back?” It’s a huge technical operation.
From spokesman to investor
CEO Jeff Aronson started the company in 2007, just as the price of gold began to soar and the economy turned down. MC Hammer joined forces with him last fall, first agreeing to be a celebrity spokesperson. Even with the money Cash4Gold pays back to sellers and a huge marketing budget—Hammer starred in a Super Bowl Ad last year with Ed McMahon—the company brought in $90 million in revenues last year. Since then, Aronson says it has grown steadily and will hit “several hundred million” in 2009.
But if Cash4Gold is raking it in, some customers claim they’re not. A class-action suit filed in October alleges the company never mailed some people their checks. It alleges that Cash4Gold frequently claims that it has lost items that were mailed in for estimates and offers poor customer service to people trying to follow up on the lost items. The company says the complaint is “seriously flawed” and that it intends to defend the case.
Meanwhile, several copycat companies have popped up as the price of gold continues to climb, but Cash4Gold has achieved name recognition and is now expanding internationally. Two weeks after its UK launch this fall, Aronson says the company had acquired as many customers as it had in its first six months of business in the US.
As Hammer says in the commercial, “We’re meltin’ gold, baby!” And making money.
