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TheWrap Raises $2 Million in Second Round, From Maveron, Others

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Join the Community!, the Hollywood business focused blog started by former NYT Hollywood correspondent Sharon Waxman, has closed a $2 million second round of funding, she tells us. The round was led by Maveron, the VC firm co-founded by Starbucks CEO Howard Schultz, and other first round investors. The site raised $500K in seed round and then undisclosed, though above a million, in first round.

This funding comes just as there have been stories by her fierce Hollywood rival Nikki Finke, alleging that TheWrap was running out of money, and that multiple VCs weren’t interested in investing. (BI covered the controversy here, and if you really want the gory details of the Hollywood snipe fest among all the trades, read this detailed post by HollywoodNews.

The new funding for TheWrap will be used for expansion of news coverage, Waxman told me, including a redesign that’s coming later in summer. The site started 15 months ago, and has broken some major stories including the Comcast-*NBC Universal* deal, though it pulled the trigger too fast on the exact mechanics of the deal. Waxman has become a fixture on TV of late, and just did a deal with “Reliable Sources” on CNN to be regular contributor to the Howard Kurtz-led show.

As for revenues, it is a usual cycle (in more ways than one) of seasonal awards advertising, something the company and other trades have a figure out a way to scale beyond. The company has also launched events, including movie screenings (with sponsors) and other bigger events to come.

I did a 15 minute video interview with Waxman in Santa Monica, on my trip this week there, and talked about a lot of issues including revenue development. She wouldn’t address the Finke issue. At all. Video embedded after the jump.

Among issues discussed:
— Usage of this new money.
— The oldline trades likes Variety and Hollywood Reporter and their future.
— Covering Hollywood and retraining the existing trade journalists.
— Developing revenue streams and expanding beyond Hollywood.
— The feud with Newser and Michael Wolff.


5 Responses to “TheWrap Raises $2 Million in Second Round, From Maveron, Others”

  1. Anita Busch

    Taleteller: The sad part about this is that no matter how hard she tries she doesn’t know how to be a journalist. She doesn’t understand the basics. I have experienced her failings first-hand with inaccuracies and breaking the Golden Rule of journalism about sources. I have also heard first-hand accounts from others as well. She is a danger to the profession and every journalist who cares about the profession needs to speak up. Other journalists know how bad she is. Just ask anyone at the NY Times.

    Yes, she moved to offices near her house after working out of her guest house which she was not supposed to be doing because it was against city ordinances. That just adds to the overhead costs. And she WAS running out of money, hence, the injection … or as you put it, the doubling down as you said of the initial investment. And yes, I also believe there must be conditions/performance milestones attached. Whomever you are, I think you are smart in recognizing this. Even the journalists reporting this news aren’t asking those questions, or pointing out the obvious.

  2. Anita, I think she moved to offices near her house — there is a video on her site documenting the move. Also, even though I share many of your opinions I urge you to let go of your jihad against her — it’s not worth it. And she’s not worth it.

    I’m not surprised that she got this funding — it’s just Maveron doubling down on an initial investment, and I’ll bet there are conditions or performance milestones or whatever attached. Either that or she is sleeping with Howard Schultz! Also, I don’t know how she can expand when she can’t even keep decent people.

    Re: the Finke dispute, she would be smart to not engage in any more squabbling, and just start being a journalist instead of an ego.

  3. Anita Busch

    to barrysonen: When you are in the sewer, the gutter appears to be the high road.

    The questions that are not being asked is what her expenses are and what kind of debt load she is currently carrying. A second round of financing from her initial investors means that they are, in essence, creating series b stock and then buying it up themselves.

    How much was the site in debt in the first place prior to the second round? If she has 15 staffers at let’s say $40,000 a year (which some will make more and others less) means that in salaries alone she is roughly $50,000 a month plus she has server costs and overhead because she can not legally run a business out of her Santa Monica guesthouse. That does not include what she pays herself. So, overhead per month may likely run into six figures.

    I can only hope that these investors wise up to how disrespected Waxman is by other journalists and others in the industry who care about ethics and accuracy.

  4. barrysonen

    Despite the “snipe fest”, I think that Waxman is a portrait of class. She always seems to be on the higher road in these petty blogger battles.