If you thought financing rounds were raising eyebrows, here’s a prediction, it’s about to get a lot more interesting, and competitive, starting… now. Part of the reason why is that exits are about to get more competitive.
Tech Crunch points to a press release that $15 billion hedge fund General Atlantic is backing Jon Miller - former CEO of Time Warner’s AOL - and Ross Levinsohn - former CEO of News Corp.’s Fox Interactive Media’s roll-up fund. We’d heard a lot about these roll-up funds, and now we’re seeing that move from concept to reality. The challenge, now, is the execution.
Michael Arrington raises a good point: the fund will be competing with Demand Media, what makes that interesting, is that Levinsohn and Demand Media Chairman and CEO Richard Rosenblatt teamed up on Intermix Media’s sale to FOX: the Intermix board brought in Richard Rosenblatt to replace founder Brad Greenspan… and eventually, FIM’s CEO Levinsohn got News Corp. head honcho Rupert Murdoch to sign the big check $580M to Rosenblatt and other Intermix shareholders.
Of course, Intermix’s Myspace was the crown jewel, but the MySpace guys only got $5M in the sale, and Greenspan to this day thinks he and other shareholders were short-changed. Afterwards, Levinsohn basically told Greenspan off, read more on Valleywag’s post, called “Fox interactive head: Brad Greenspan is a loser“.
Not to be outdone, Brad Greenspan, founder of Intermix, has since started LiveVideo.com and been busy buying up assets, he bought video search (Flurl.com) and probably, safe to say, hates both men (Levinsohn and Rosenblatt). He also tried to derail Murdoch’s planned acquisition of Dow Jones, which was beyond ballsy, and ineffective. Expect to see Murdoch try to derail at least some of Greenspan’s plans in the future.
Back to this new fund, by the sounds of the press release, Miller and Levinsohn are:
“to Serve as Advisors to General Atlantic’s Media and Consumer Sector,” but I think by next week you will see news that the gentlemen are launching a new fund and leveraging GA’s far-flung assets and know-how.
According to Anton Levy, Managing Director and head of GA’s Media & Consumer sector, said, “We are excited to be bringing Jon and Ross on board to work with our media and consumer team as we continue to partner with the leading companies in this high growth sector.”
Paid Content adds:
The new fund is called Velocity Investment Group, and among the companies we have heard it is looking at is online video distribution firm Broadband Enterprises. The two have also been talking to numerous other companies, at least a dozen of them according to our sources. The focus initially is platform/distribution companies.
Also, the two have been talking to various investors for while, and among them were Texas Pacific Group. The fund came very close to doing a deal with Warburg Pincus, but Warburg was putting in too many restrictive clauses which the two didn’t agree to, and General Atlantic came in at the last second, our sources tell us.
What’s more noteworthy, in fact, is that to some extent, Levinsohn got shown the exit door by News Corp. and AOL sheepishly fired Miller and replaced him with NBC’s Randy Falco. Guess who this fund will also be competing with?
Media companies like NBC and News Corp.
I am not sure if I should be saying this, but this week I held talks with a couple of media firms who wanted to buy us. Both fantastic businesses, but on my way back, I could not help but think that it was too early to sell and that the demand vs. supply mechanism was in our favor and we should hold out. I might very well never cross any of these men (well, Mr. Levinsohn certainly knows about WatchMojo.com, but I digress), but you are just starting to see the flow of things towards digital, mark my words.
I love this business.
Subscribe: