Entrepreneurs seeking cash for new-media start-ups get a new door to knock on today.
William Morris Agency is teaming up with Silicon Valley venture capital firms Accel Partners and Venrock as well as telecommunications provider AT&T; Inc. to launch an investment fund for consumer technology and media start-ups. It’s part of an effort by the talent agency to cash in as more entertainment moves online.
“Intellectual property is shifting toward different distribution channels,” said Jim Wiatt, chairman and chief executive of William Morris. “There’s a huge opportunity for us to participate in that.”
The fund, which does not yet have a name, will make investments of less than $1 million in young companies that help foster growth in areas including broadband, wireless, gaming, advertising, entertainment and emerging media platforms.
“There’s new innovation every year, and the earlier you can be aware of or involved in that innovation, the better position you’re going to be in,” said media industry veteran Richard Wolpert, who will manage the fund.
Wolpert was formerly the president of Disney Online and chief strategy officer of RealNetworks Inc., which created the RealPlayer media streaming program.
Jim Breyer of Accel, who led funding efforts for companies such as Facebook Inc., and Venrock general partner David Siminoff, who made early investments in Yahoo Inc. and Amazon.com Inc. while a portfolio manager at investment firm Capital Research, will serve on the fund’s board, with Wiatt.
The new fund will focus on companies that need a little seed money to get off the ground, Wolpert said. He would not disclose how much money the fund had raised but said it was in the tens of millions of dollars.
Other talent agencies have struck partnerships with digital players. For example, United Talent Agency has teamed up with advertising agency Spot Runner Inc. to launch 60Frames Entertainment, which creates short Web videos, and venture capital firms have backed online entertainment sites such as Will Ferrell’s FunnyorDie.com.
The initiative is unique because it brings together a wide range of players, said Mike Vorhaus, managing director of Frank N. Magid Associates, a media research and consulting firm.
It’s also a smart business move, Vorhaus said, especially as talent agencies try to figure out how to make money in the burgeoning digital entertainment business. Their commission on a $10,000 Web deal is tiny compared with on a $10-million movie contract.
“This may be their best way to create a business model that works for new media: ownership,” Vorhaus said.
AT&T; is a limited partner in the fund, which means it can choose which companies it wants to invest in.
“It’s about getting in on the ground level with interesting innovation we can bring to our customers,” said Susan Johnson, AT&T;'s senior vice president of business development.
The fund is one of many putting money into the Southern California technology scene. In mid-2007, the region bypassed New England to rank second in the country -- behind Silicon Valley -- for tech investment. The amount of venture capital money invested in Southern California last year rose 12% to $3.8 billion.
“We’re focusing on Southern California because we truly believe there’s a sense of reality here about the intersection of media and entertainment and technology,” said Paul Bricault, a senior vice president and head of William Morris Consulting. “It is producing real results.”