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Sharp Alpha Advisors, a New York City-based venture capital firm, has raised $25 million for its second fund targeting early-stage software companies primarily in the sports, gaming and entertainment industries.
The firm, Sharp Alpha Fund II, plans to invest between $1 million and $2 million each in 15 startups, said managing partner Lloyd Danzig. Danzig said the fund is oversubscribed and will ultimately raise more than $25 million, but he declined to provide a hard cap for the fund.
Sharp Alpha is interested in companies in a category Danzig calls “competitive entertainment.” Examples include technology companies that deal in sports betting, fantasy sports, streaming platforms, and video games.
Companies that Sharp Alpha invests in give people “an adrenaline rush that makes them feel connected to the content they're engaging with, allowing them to lean in and immerse themselves in any activity or people.” I’m having fun,” Danzig said. “We believe it is one of the most desirable places, both economically and empirically, to build and therefore invest in technology.”
The fund recently invested in C15 Studios, a London-based technology startup that operates and distributes streaming channels for open-wheel racing league F1 and mixed martial arts league One Championship. C15 was co-founded last year by Jon Nilsson and Amory Schwartz, who previously worked together on his SportsTribal TV, a free ad-supported streaming television (FAST) service.
C15 plans to strike deals with other sports leagues to launch the FAST channel, which has grown in popularity as people cancel cable TV contracts and don't want to pay for subscription services. FAST services include Pluto TV, Tubi, and Amazon Freevee.
Fund II plans to make additional investments over the next three to five years and provide additional funding to select companies over the next three to five years. There are also sidecar vehicles that allow limited partners to invest more money in individual companies within the fund.
Investors in the fund include major U.S. financial companies, owners of U.S. professional sports franchises, family offices, funds of funds, and publicly traded companies with ties to the sports, gaming and entertainment industries, Danzig said. It is claimed that However, Danzig declined to reveal the names of specific individuals or companies.
Danzig, who has worked as an analyst, fixed income trader and data scientist, said, “It's a great time, perhaps recently, to invest early in great founders who are building compelling solutions to important problems.'' “I think it's the best time in my memory.” “We are extremely grateful and grateful to our limited partners for supporting us and believing that we can achieve the level of financial and strategic return they seek. ”
The fund follows Fund I, which raised $10 million in 2021 primarily from high-net-worth individuals and family offices. Sharp Alpha made 20 investments in the first fund, with an average deal size of about $250,000, Danzig said, adding that the fund has additional capital remaining for subsequent investments.
Two of the companies Fund 1 invested in have already been sold. Sports gaming app Betcha Sports, Inc. was sold to Vivid Seats Inc. for $25 million in December 2021, and Web3 gaming company VicTree was sold for $25 million in December 2021. Transferred an undisclosed amount to Divergent Yield Group in November 2023.
Danzig said Sharp Alpha is a “small company,” but declined to say how many employees work at the company. He said he is setting up an advisory committee to provide advice.
The board of directors consists of Roy Behlen, co-president and chief investment officer of asset management firm Westchester Capital Management; Daniel Bernard, Founder and Chairman of Redwood International Sports; Keith Horn, founder of investment advisory and consulting firm Rolling Capital Advisors; Don Cornstein, Vice Chairman, Caesars Entertainment; Emmanuel Perlman is the former executive chairman of Empire Resorts and serves on the boards of several companies.
