ECompanies to Disclose Venture Capital Funds : Investing: It’s expected that Santa Monica Internet business incubator has raised $130 million.
ECompanies, the Santa Monica-based Internet business incubator formed in June by top executives from Walt Disney’s Buena Vista Internet Group and EarthLink Network, is expected to announce today that it has raised more than $130 million for its first venture capital fund.
ECompanies co-founders Jake Winebaum and Sky Dayton said they initially planned to raise $100 million for their fund, but they lifted the cap because of intense interest from investors.
Their success could be a harbinger of increasing investor interest in Tech Coast companies, which have long complained of a dearth of Southern California venture capital.
Another Southland venture capital fund, Zone Ventures, is close to raising more than $50 million from private sources. It is already investing $25 million from the federally funded Los Angeles Community Development Bank in high-tech start-ups in L.A.’s urban core.
Investors in ECompanies’ fund include Winebaum’s alma mater Disney and EarthLink, the Pasadena Internet service provider Dayton founded, along with Sprint, the long-distance company that owns 28% of EarthLink. Other investors include Accel Partners, CS First Boston, Goldman Sachs, Kohlberg Kravis Roberts & Co., Soros Fund Management, SunAmerica and Times Mirror Co., parent company of the Los Angeles Times.
The companies, which together are responsible for about 90% of the $130 million raised, each contributed in equal amounts. The balance of the fund was raised from individuals, including Winebaum and Dayton.
The fund, raised in just 60 days, will concentrate its investments in early stage technology companies, including start-ups housed in ECompanies’ incubator and others spread across the country, Dayton said. The first investments will probably be made in a matter of weeks, Winebaum said.
Investors in the ECompanies fund were selected based on their ability to provide start-ups with key services in addition to cash, Winebaum said. For instance, CS First Boston and Goldman Sachs have taken many young high-tech firms public, and buyout firm KKR could assist in brokering mergers and acquisitions in the consolidating Internet field, he said.
The fund will be managed by Steve Ledger and Tim Spicer, who will become general partners in ECompanies Venture Group. Ledger, founder and managing partner of the San Francisco-based hedge fund Storie Partners, was an early investor in EarthLink. Spicer is president and chief operating officer of San Francisco Sentry Investment Group, which counts Storie Partners as a member.
The fund isn’t the only sign of fast growth at ECompanies. The incubator, which turns 3 months old next week, has already hired 22 employees, Dayton said. Earlier this month, the company disclosed that it had lured Disney veteran Andrew Greenebaum away from his post as chief financial officer of the satellite broadcasting firm CD Radio to become CFO at ECompanies.
Karen Kaplan can be reached at karen.kaplan@latimes.com.
