Back in 1981, a young and ambitious sales executive named Howard Schultz found himself stepping into a quaint coffee shop nestled within Seattle’s bustling Pike Place Market. This establishment, known as Starbucks, was a modest operation, boasting only four locations where patrons could buy coffee beans and brewing equipment, but not a single brewed beverage was served. What captured Schultz’s attention wasn’t merely the quality of the coffee, but the vibrant ambiance, the lively conversations, and the budding sense of community that revolved around this simple commodity.

Schultz became a fervent believer that coffee could transcend its status as a mere product and become a coveted experience.

Within a mere year, Schultz managed to convince Starbucks’ founders to bring him on board, taking the reins of marketing and operations in 1982. His relocation to Seattle marked the start of his journey with Starbucks. A pivotal moment came soon after when a trip to Italy altered the course of his career. In Milan, Schultz was mesmerized by the pervasive coffee culture—espresso bars were integral to daily life, serving as communal hubs where locals gathered multiple times throughout the day.

Returning to Seattle, Schultz was inspired by the concept of a “third place”—a space distinct from home and work—that he envisioned Starbucks could embody. However, the company’s founders were not aligned with his aspirations. Their focus remained on selling coffee beans rather than developing a coffeehouse chain.

Faced with this impasse, Schultz made the bold decision to leave Starbucks in 1986, founding his own venture, Il Giornale. His new company embraced the Italian coffee culture he had come to admire. The venture thrived, yet Schultz realized that to truly bring his vision to life on a grand scale, acquiring Starbucks was imperative.

In 1987, the opportunity to purchase Starbucks presented itself when the founders decided to sell the company for $3.8 million. Lacking the necessary funds, Schultz embarked on a quest to secure backing from a select circle of Seattle’s business leaders, seeking investors who could appreciate both the potential risks and the promise of this venture.

One of those investors was a local entrepreneur named Harold Gorlick.

Gorlick was not a venture capitalist or financier. He was a hands-on businessman. His family had emigrated to the United States from Eastern Europe in the early 1920s and eventually settled in Seattle. Like many immigrant families, they built their success from the ground up. In 1951, Harold and his brother co-founded Thrifty Supply Company, a chain of thrift stores that grew steadily across the Pacific Northwest.

By the mid-1980s, Gorlick had built a comfortable fortune and developed a reputation as someone who knew how to spot a good opportunity. So when Howard Schultz approached him with the chance to invest in a small, six-store coffee company, he listened. And ultimately, he decided to invest.

Harold co-founded Thrifty Supply with his brother Morris. For reasons I could not ascertain, as an adult, Morris chose to spell his last name “Gorelick” as opposed to his brother’s “Gorlick.”

Morris had several children, including a son named Kenneth. Around the time Harold was considering investing in Starbucks, Kenneth was beginning to make a name for himself in the music business.

After getting his start as a sideman for Barry White’s Love Unlimited Orchestra while still a teenager, Kenneth Gorelick signed a record deal with Clive Davis’ Arista Records in the early 1980s.

Performing under the name “Kenny G,” his 1982 debut album went gold. His next two releases went platinum.

By 1986, his fourth album, “Duotones,” had turned him into a bona fide star, thanks to the hit instrumental single “Songbird.”

By the mid-1980s, Kenny G was in his mid-20s and, for the first time in his life, had meaningful money to invest. Around that same time, his uncle Harold reached out with a suggestion.

As Kenny would later recall in interviews, the message was simple: he had been selling a lot of records, he had some cash, and he should meet a guy named Howard Schultz who was raising money for a small Seattle coffee company called Starbucks.

Kenny listened.

At the time, Starbucks was still a tiny regional business. The company had just six stores, all in the Seattle area, and generated only a few million dollars in annual revenue. It wasn’t publicly traded, and there were no guarantees it ever would be. In fact, Starbucks was still five years away from its 1992 IPO. What Schultz was pitching to investors like Gorlick and Kenny G wasn’t a proven global brand. It was a risky bet on the idea that Americans might someday embrace espresso bars and pay a premium for coffee.

Kenny decided to invest. He also performed at a handful of store openings in those early days. Here he is performing at the opening of a Starbucks in Manhattan in 1999:

(Photo by Ron Galella, Ltd./Ron Galella Collection via Getty Images)

In the years that followed, Starbucks grew at a pace few could have imagined. The company expanded beyond Seattle, then beyond the West Coast, and eventually across the globe. By the time it went public in 1992, it had already grown to 165 stores. At its IPO on June 26, 1992, Starbucks was valued at roughly $250 million to $271 million.

What happened next is where the story gets interesting.

By mid-1996, Starbucks’ market cap had climbed to around $2 billion. Just three years later, in 1999, it reached roughly $7 billion. Over the next two decades, the company continued to grow steadily, eventually hitting an all-time high market value of $144 billion in July 2021.

From its IPO to today, Starbucks stock has delivered a total return of more than 26,500%.

Today, Starbucks operates more than 41,000 locations worldwide and is worth roughly $115 billion.

So what did that early investment turn into for Kenny G?

Over the last decade, a persistent rumor has circulated that Kenny G made more money from his Starbucks investment than he did from his entire music career.

That is almost certainly a bit of a stretch.

The origin of that claim appears to trace back to a 2014 Reuters interview in which Kenny discussed his investing habits and the success of his portfolio. In that interview, he said that over the previous 10-year period, which would have included the lowest point in the record selling businsess, he had earned about as much money from stock trading as he had from music royalties.

That’s very different from saying his Starbucks investment alone surpassed his lifetime music earnings. But the distinction has been blurred over time.

However, in that same 2014 interview, Kenny revealed that he still owned “a fair amount” of his original shares.

So let’s do some quick napkin math to estimate what that might mean.

If you invested $1,000 in Starbucks at the 1992 IPO and never sold a share, today you would have $340,000. If you invested pre-IPO, you would have significantly more, but we can’t calculate for sure without knowing the company’s pre-IPO valuation. So let’s just use the IPO return.

It’s also safe to assume that he didn’t invest a token amount. By the mid-1980s, Kenny G was already a successful recording artist with multiple gold and platinum albums. It is also safe to assume that Howard Schultz wasn’t looking for investors to chip in a couple grand. The pre-IPO investment group was made up of very prominent Seattle businessmen. In addition to Kenny’s uncle, one of Starbucks’ key backers in those early days was Bill Gates’ father, Bill Gates Sr.

Let’s assume Kenny chipped in $100,000. Using the IPO baseline, $100,000 invested would be worth $34 million today.

We currently estimate Kenny G’s net worth at $100 million. That number is based on a combination of his estimated stock holdings (he also owns early shares in Apple), his music catalog value, royalties earned from his 75 million records sold and his real estate holdings.

Speaking of his real estate holdings…

We actually got a bit of insight into Kenny G’s wealth as part of a 2023 alimony dispute filed by ex-wife Lyndie Benson. In a filing that would help calculate his monthly spousal support obligation, Kenny revealed that his monthly rental income was…

$600,000

Not $600,000 per year. $600,000 PER MONTH. Want to know who was paying that much to rent his mansion? As it turns out, fellow former Seattleite, Jeff Bezos. Jeff and Lauren Sanchez rented Kenny’s Malibu compound while they were completing their own nearby estate. Kenny’s blufftop Malibu compound is actually two estates combined into one. He paid $12.5 million for the first half in 1997 and $3 million for the second half a few years later. Today, this property is almost certainly worth $40 million.

Has Kenny G made more money from Starbucks than from his music career? Almost certainly not. But again, that’s not what he said in the 2014 Reuters interview. In that interview, he claimed that in the previous decade, he made more from investing than from music royalties. Even that statement is probably not accurate when applied to the next decade, when the streaming model was launched and eventually perfected.

Either way, he has forged an extremely impressive multi-faceted career. Musician. Venture capitalist. Real estate investor.

When we look back at the history of Starbucks, it is easy to assume its global dominance was inevitable. But in the late 1980s, investing in Howard Schultz’s vision required a massive leap of faith. It took people who were willing to look past a local bean-roaster and see the potential for a cultural shift in how Americans consumed coffee.

Kenny G made that leap. And while his saxophone is what made him a global household name, his keen eye for opportunity—whether it was an unproven espresso bar in Seattle or premium, blufftop real estate in Malibu—proves that his sense of timing extends far beyond the recording studio. He may not have made more from coffee than he did from music, but thanks to a perfectly timed introduction from his uncle, he secured his place in one of the greatest venture capital success stories in modern history.