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Just four months after finally announcing their investment firm Velocity Investment Group, former FIM (NYSE: NWS) president Ross Levinsohn and former AOL (NYSE: TWX) chairman Jon Miller are merging with ComVentures to form Velocity Interactive Group. Call it the investment equivalent of marrying for love — and into money. ComVentures brings more than $1.5 billion in assets and three partners: David Britts, Keyur Patel and Roland Van der Meer. Miller and Levinsohn have been advising ComVentures and working with the venture fund on investments during the past year. The five are general partners in the combined firm, described now as an “investment firm that provides financing for seed, early stage and growth companies” with an emphasis on digital media and communications globally. In an interview Monday, Levinsohn said VIG plans to raise another round in 2008. The fund is investing “as little as $100,000, as much as $30 million.”
What happened to PE firm General Atlantic as Levinsohn and Miller’s backer when the first version of Velocity launched? Levinsohn said they hope to continue to work with GA but that PE is “generally oriented towards cash-flowing assets — which many i-companies are not.” He said GA enabled Velocity to make offers but nothing that went through given a “frothy” market.
Focus: Across the board, the five want to work with companies that need their help, not just their money. The rationale, in part: companies can be started on the cheap but to make it to the next level, they need funding and experienced advisers. Levinsohn: “The reason so many people have called Jon and I is that you hit the wall.” More after the jump.
Funding: Despite all the talk about Levinsohn and then the two of them walking into a $1 billion or so media roll-up fund, they were still in the process. Levinsohn: “You don’t raise a fund in two minutes. It takes between 9-18 months to raise a first-time fund. I think we could have done it …. But it would have taken a long time. … It’s a way for us to participate quicker.” Merging with ComVentures finally provides them with the capital.
Shopping: When I asked if they’re running into companies eager to sell now in case things turn sour, Levinsohn said it was just the opposite. “I’m actually amazed by it. A year ago … there was more desperation to sell.” The Facebook platform initiative and, to some extent, OpenSocial, turned that around, adding distribution to companies that once were only features. “They now have tens of millions of users and are raising money at huge multiples — hundreds of millions of dollars — and they’ll get it.”
Investments: The company includes five investments in its announcement, all stemming from ComVentures and all already known: in India, NTVD Networks ($20 million announced earlier this year) and India TV ($11.5 million through Fuse+Media); in the U.S., Fabrik (digital media management and storage), Doppelganger (social entertainment/virtual worlds) and Mixercast (rich-media distribution/creation service). Levinsohn said the first investments at the fund’s lower end will come after the first of the year. among other deals: “We have plenty of stuff in the hopper; January and February should be busy.” The current portfolio is here.