Ashton Kutcher has one key benchmark he looks at when he decides whether or not to invest in a startup: would he want to work there?
"It's all about the people," Kutcher told CNNMoney in an email. "Invest in companies with founders that you would work for."
One of Kutcher's biggest bets lately is Zenefits, a startup that aims to simplify HR. The Zenefits platform handles everything from payroll to health insurance and 401k all in one place.
Its big selling point is that it's available for free. That's because Zenefits makes money from commissions it collects via health insurers and other benefit providers.
Founded in April 2013 by Parker Conrad and Laks Srini, Zenefits has grown rapidly. It now handles benefits for 10,000 companies. Last year it's revenue reached $20 million, and it projects $100 million this year.
The actor is hardly alone in believing Zenefits is Silicon Valley's next big thing.
Zenefits just raised $500 million in its latest round of funding, led by Fidelity and private equity firm TPG. Other investors include actor Jared Leto and venture capitalist Marc Andreessen, who took early stakes in Twitter (TWTR) and Facebook (FB).
Related: Jared Leto's new role: Venture capitalist
After this funding round, Zenefits is now valued at $4.5 billion. That's very high for such a young company and signals how game-changing venture capitalists think this idea could be.
The face of the company is Conrad, whose life story is the stuff TV scripts are made of. Now 34, he failed out of Harvard and got testicular cancer in his 20s, but he managed to return and graduate. He later founded investment research firm Wikinvest (now known as Sigfig) only to be ousted by his co-founder.
His ups and downs are likely to be useful as Zenefits grows and faces legal battles. At issue is whether Zenefits violates many state's "anti-rebate" laws because it gives its software away for free. The anti-rebate laws prevent insurance agents from giving people incentives or kickbacks to buy their products.
Utah actually banned Zenefits for several months because of the rebate debate.
"The incumbent will resort to regulation to try to even the playing field. We've seen this with Airbnb, Uber, and several other investments. Zenefits is no exception," Kutcher notes.
But the company won a big victory in Utah in April when the governor signed a bill ending the state's ban on Zenefits.
"Zenefits is positioned to be the most powerful enterprise software in the world," Kutcher adds. "Great software connects people by removing friction."
