William Morris Agency, a Hollywood entertainment firm, has teamed up with Silicon Valley venture capital firms Accel Partners and Venrock to form a joint investment vehicle to provide seed and growth capital to consumer technology companies in Southern California.
The total size of the fund was not disclosed although Paul Bricault, head of William Morris, said it would range from $10 million (€6.6 million) to $100 million. The fund is also scalable in size, not capped.
Global telecom company AT&T will participate in select investments made by the fund. AT&T opted not to be a general partner in the fund in order to avoid potential conflicts of interest should the fund invest in its competitors, according Bricault.
In line with the fund’s goal to “identify early stage companies at the point of inception”, investment size is loosely capped at $1 million.
The new fund will be managed by angel investor and serial entrepreneur Richard Wolpert, who most recently served as an advisor to Accel. Wolpert previously served as chief strategy officer of RealNetworks and president of Disney Online.
The new fund will invest in companies trying to reach a level at which an Accel or a Venrock would invest, said Wolpert. The seed and angel level investments will be made in companies that have either raised no capital or have raised some “friend and family” money but have no institutional investors.
Although venture capital is a new activity for William Morris, the fund’s activities are “on many levels very connected to our business”, said Bricault, who pointed to the firm’s decade of experience in the digital media space and roster of clients including MySpace.
“We have an obligation to our traditional clients to keep them abreast of what’s next,” added Bricault, who went on to note that the growth of new media is outpacing growth in traditional media.
However, William Morris’s involvement does not limit the fund to media-related companies, adds Wolpert. The fund is open to a wide variety of ideas within the internet consumer space.
William Morris is not the first Hollywood agency to make plans to move into venture capital. US venture firm Draper Fisher Jurvetson and talent agency Creative Arts Agency have rumoured plans to raise a $150 million to $200 million fund to invest in startups in the digital/entertainment sector.
Accel Partners has $4 billion under management and has invested in such companies as Macromedia, RealNetworks and Facebook.
Venrock, originally the venture capital arm of the Rockefeller family, has invested $1.9 billion in 405 companies over the last 39 years. Past Venrock investments include Apple Computers, DoubleClick and Intel.