An employee at a Coast Guard testing center entered false scores in exchange for bribes, federal prosecutors say.
There have been 30 named storms and 13 hurricanes this year, the most active Atlantic season on record.
Quawan Charles was found dead in a field in rural Louisiana days after he had vanished. Now his family is asking whether his death could have been prevented with a faster response.
Kathryn Shea Duncan, 24, works to promote tourism in Lake Charles, La., which was hit hard by Laura and Delta this year.
Holden Matthews, 23, said he had set fire to the churches in order to raise his profile among ‘‘black metal” musicians, prosecutors said.
It was the fifth named storm to hit Louisiana during a busy and brutal hurricane season. Hundreds of thousands of residents in Louisiana and Mississippi were left without power.
There’s a new company that’s sitting on top of some of the fastest growing consumer-facing businesses in the world — liquor and marijuana delivery — and its name is Pacific Consolidated Holdings Group.
The investment firms and executive teams behind the Los Angeles-based delivery liquor delivery company, Saucey, along with Inception Companies, the backer of marijuana distribution company, Emjay, have formed Pacific Consolidated to merge their two companies and build what’s likely the largest “vice” company in the world.
(Although in a global pandemic and period of political tumult unseen since the 1960s, what even is vice anymore anyway?)
Financial terms of the transaction were not disclosed.
The merger is the first step of what’s a planned rollup strategy for PCH (also the nickname for the highway that runs along the California Coast), which aims to be the leading vertically integrated vice platform focusing on e-commerce, delivery logistics, and cross industry behavioral insights.
As the co-founder of Saucey and now chief executive of PCH, Chris Vaughn, said: “Everyone in the liquor industry is thinking about the marijuana business and everyone in marijuana is looking at liquor.”
Both Vaughn and his Saucey co-founder Daniel Leeb will take management positions at PCH, and Blumberg Capital and Bullpen will have a large equity stake in the newly formed holding company, Vaughn said.
“We’ve spent the past decade in bev-alc at the forefront of providing solutions to changing consumer shopping behaviors. What we’ve seen is a more exploratory customer than the industry recognizes, ready to try new form factors, products and categories. The one consistent theme is they want to be able to discover and shop these products conveniently, and to be able to trust their platform of choice,” said Vaughn in a statement. “The strength of PCH is that we’re able to provide unparalleled and personalized cross-industry shopping experiences to consumers, while also having the data to understand customer behaviors between cannabis, alcohol, tobacco and CPG. When you combine this with the diversified infrastructure of PCH and the incredible team we have working on these opportunities, it gives us the flexibility and the foundation for best serving the future of these industries.”
Saucey launched in 2014 and now operates across 22 markets including LA, San Francisco, San Diego, Sacramento, New York City, Chicago, Washington, Dallas, Orlando, Tampa and Miami.
Its sales growth has expanded 200% year-over-year even as the company maintains its profitability, according to a statement. The liquor side of the PCH business is indeed incredibly strong.
And of the 1 million users that the company surveyed (most in its largest market — California, which is perhaps one of the most mature consumer markets for cannabis consumption in the US) an overwhelming majority of 70% said they’d like to see integrated marijuana and liquor delivery services.
While Emjay was only formed a year ago, the company had built a groundwork of distribution, cultivation, and production licenses as it was getting off the ground. Formed by the Inception Companies, Emjay brought in Vaughn as an advisor to the company early on and as the company grew, so did the recognition among the investors and operators of the potential for a powerful merger, Vaughn said.
With Emjay, not only does PCH get a distribution company, but since it also acts a vertical operator the company can deliver marijuana products to consumers at a far lower cost than its competition.
Vaughn and Leeb have actually been operating the Emjay business since January and have grown the company’s revenues from less than $100,000 in transaction volume to the seven-figure sales that the company currently enjoys. And Emjay itself became a profitable business earlier this year, according to a statement. Now, the focus is on growing its footprint within Saucey’s massive California user base.
While there was a surge of interest and investment into the cannabis business in the industry’s early years following its legalization in certain states back in 2014, many of the market’s early leaders fell on hard times in 2019 as legal hurdles, grey market suppliers, a crisis in the vaping industry, and a lack of professionalization took their toll on the industry.
It’s a storm that Omar Mangalji, the former Goldman Sachs banker turned Los Angeles gadfly who co-founded the Inception Companies (and sometimes goes by the name Ronnie Bacardi).
“The broader cannabis market has largely struggled due to weak underlying fundamentals and poor management. But much like the dashed expectations that came with the rise and fall in the DotCom era, this industry is now evolving into Cannabis 2.0.”, Mangalji said in a statement.
With the merger of the two companies, Saucey users can create an Emjay account with their existing login and toggle between the two services simply by tapping on an icon.
In a move to shore up institutional support in what’s likely to be it’s last fundraising as a private company, the Los Angeles-based mobile gaming behemoth Scopely has raised $340 million in its latest eye-popping round of funding.
Acting as if there’s not still a global pandemic raging throughout the world, some of the largest institutional financing firms like Wellington Management, TSG Consumer Partners, CPP Investments, and funds managed by BlackRock poured more money into the gaming giant just one year after the company raised $200 million in another late-stage funding round.
“What we are seeing is that there’s a significant appetite from public market investors to interactive entertainment as a category,” said Scopely co-chief executive Walter Driver. “We were excited to crossover and invest in Scopely.”
These late-stage, traditionally pre-IPO investors joined NewView Capital, Battery Ventures, Greycroft, Revolution Growth and Highland Capital Partners in the funding, which values the company at $3.3 billion, according to a person familiar with the financing.
The massive windfall won’t mean anything for Scopely’s strategy as the already wildly profitable business continues to grow both organically and through its acquisition strategy of major mobile gaming studios, according to co-chief executive, Walter Driver.
Unlike the other big companies that have taken billions of dollars in the gaming market — chiefly Epic Games and Unity — Scopely isn’t making tools for gaming. The focus at the Los Angeles-based company is squarely on the games themselves and the players who spend billions of dollars on them.
“Scopely is focused on building the end-to-end publishing capabilities and development capabilities that will result in the longest term relationships with players for years to come,” Driver said. “This space is evolving really quickly and we have grown exponentially. If we want to be the leading company in the space, we have to be capitalized like the leading the company in the space.”
In terms of capitalization, no other mobile gaming studio comes close. The company’s closest competitor, both in proximity and in strategy would probably be the other LA-based mobile gaming company, Jam City, which is reportedly valued at $1.1 billion.
Scopely doesn’t shy away from developing aspects of the platform technologies that have powered Epic and Unity to their own multi-billion valuations, but it isn’t selling those tools to other companies, Driver said.
“Our belief is that over the longterm the most valuable companies in this space are going to be fully vertically integrated and own proprietary technology platforms,” he said.
For Scopely, technology development is all about user retention, and developing the publishing capabilities and development capabilities that will help the company and its games stay relevant to an increasingly expanding and increasingly savvy audience of gamers.
And the company has an eye on the future. It’s looking at moving more of its games between platforms desktop, mobile, and consoles as games evolve to be played across those different systems. While that doesn’t mean developing for augmented reality or virtual reality hardware yet, Driver doesn’t rule it out.
“We do think there’s going to be continued innovation of new genres and consumer experience and more convergence and cross-pollination between platforms. Scopely is going to be focused on a player-centric approach rather than a device-centric one,” said Driver.
For Driver and his co-founder, Javier Ferreira, Scopely’s growth — and that of the total gaming industry — represents an evolution in the ways that consumers want to be entertained.
Scopely’s players are spending 80 minutes per-day on games like “Star Trek Fleet Command”, “MARVEL Strike Force”, “Scrabble GO” and “YAHTZEE With Buddies” and that time spent is actually spent socially.
“People have found — and investors looking at the space have found also that people value the connection they’re getting from interactive experiences. It’s not just our relationship with the players, but their relationships with each other,” Driver said. “Inside of most passively consumed media experiences, you don’t have an identity. You don’t have friends.“
Or, to put in more nakedly capitalist terms, “We believe mobile gaming’s rapid growth makes it one of the most attractive categories in entertainment from an investment standpoint,” as Dan Sundheim the co-founder of late-stage Scopely backer D1 Capital, said in a statement. “We are confident that Scopely’s vision for the future coupled with its strategic approach to creating a vertically integrated game-making ecosystem, differentiated technology platform, and deep relationships with players will continue to cement its status as an industry leader.”
The storm, which was upgraded to a Category 1 hurricane, is expected to make landfall on Wednesday afternoon. Preparations across the state have already begun.
The state already has been slammed by Hurricanes Laura and Delta, which hit the coast during the tumultuous 2020 Atlantic hurricane season.
For years, attendance rates have dropped and congregations have closed nationwide. But many reused religious spaces are still sanctuaries.
Zeta is expected to become a hurricane before it makes landfall in the United States on Wednesday. It is the 27th named storm of an unusually active Atlantic hurricane season.
Before 2017, a person in Louisiana could be sentenced to life in prison after receiving a fourth nonviolent conviction under the state’s habitual offender law.
I went home to celebrate Frederick’s glorious life and was forced to reflect on my own.
The storm made landfall some 20 miles from where Laura touched down a few weeks ago, intensifying the devastation the state has experienced during a brutal hurricane season.
Schools have been closed and several parishes are under either mandatory or voluntary evacuation orders.
In Garrett Bradley’s moving documentary, a woman fights for her family and justice as a husband and father’s absence reverberates.
The governors of Alabama and Mississippi have declared states of emergency, while some parishes in Louisiana are under mandatory evacuation orders.
The category 3 storm is expected to hit the Yucatán Peninsula on Wednesday before heading to the northern Gulf Coast at the end of the week.
A two-term Republican convert, he served between the tumult of the scandalous Edwin Edwards era and the devastation of Katrina.
Spam calls and scammers are more than annoying; they’re hindering efforts to track the coronavirus.
His small town rallied around him after he reported an ambush. But the officer, John M. Goulart Jr., has now been charged with criminal mischief.
It’s part of what Struck Capital founder Adam Struck called a vision of making Los Angeles “a leading hub for innovation to save the world.”
Struck Capital, which is currently investing out of a $55 million second fund, would not disclose the size of DiCaprio’s stake, but said that the investment is significant.
“Los Angeles has a creative and innovative spirit like nowhere else, and I’m excited to be investing in the next generation of entrepreneurs and business leaders in my hometown,” said DiCaprio, in a statement.
DiCaprio has already made a number of investments in startup companies that have done very well for the Academy Award-winning actor. Two investments, the mattress retailer Casper and the meat alternative manufacturer, Beyond Meat, are now both publicly traded companies. In fact, Beyond Meat was one of the best performing public offerings of the last year.
And the two investments highlight themes of consumer innovation and sustainability that are a through-line across the startup commitments DiCaprio has made public, according to CrunchBase. Other investments include the lab grown diamond manufacturer, Diamond Foundry; the tea company promoting sustainable rainforest preservation, Runa Tea; recycling technology developer, Rubicon; the sustainable meal prep company, Love The Wild; and Magnus, an app that bills itself as a Shazam for art. DiCaprio is also investor in the Los Angeles-based ethically and sustainably focused financial services firm, Aspiration.
“He sees this as a way to support LA,” said Struck of DiCaprio’s commitment.
In addition to his commitment to the fund, DiCaprio will be making co-investments alongside the Struck Capital team. In fact, the actor has already investment in Raptor Maps, a company that uses drones to analyze the productivity and operations of solar farms.
“He chose us because he already appreciates our mandate,” said Struck. And while the firm may not be an impact investment fund by design, Struck said the company’s deals focus on financial inclusion, sustainability, and technological innovation as first principals.
“I think, fundamentally, if a business is mission driven, they’re most likely going to acquire higher enterprise values and retain more talent,” Struck said.
Struck is now the fourth largest dedicated seed fund in Los Angeles, and has nearly $150 million in assets under management. Its portfolio companies include: Sendoso, ScratchPay, Mythical Games, and Brainbase and has backed and exited a number of later stage companies like Mojo Vision, Postmates, Nutanix, Latch, Grab, and Wunder Mobility.
“Alongside the team at Struck Capital we’re creating a community, where the next generation of LA’s leaders can grow their business, learn from one another, achieve their visions, and improve our world,” DiCaprio said in a statement.
The deep bonds residents have for their coastal community have been tested by three epic hurricanes. Many wonder whether it’s time to leave.
The Louisiana State Police said Ronald Greene died in a crash after leading troopers on a high-speed chase. Over a year later, photos of his injuries have raised new questions about his death.
The storm is headed for the Texas and Louisiana coasts, another blow for states in the Gulf that have been hit by five other storms this hurricane season.
One of Louisiana’s most successful high school football coaches retired, concerned that his blood cancer made him vulnerable to Covid-19. At least 30 high school and club coaches have died of the coronavirus.
Officials urged people to prepare for “life-threatening” flash floods, torrential rains and strong winds. “This is the real deal,” Mississippi’s governor said.
Indulging in American food companies’ favorite pastime of marketing innovations that no one needs but potentially everyone wants, Beyond Meat is launching Beyond Meatballs in grocery stores nationwide this week.
The new product can be put on top of spaghetti, all covered with cheese, and comes pre-spiced with a blend of Italian spices, according to a company statement.
The company’s meatballs have 30% less saturated fat and sodium than real meat and will be available at Whole Foods, Stop & Shop, Sprouts, Harris Teeter, Kroger and Albertsons, and more by early October, according to the statement.
The suggested retail price for these pre-spiced and pre-rolled protein replacement balls of soy is $6.99 for 12 meatballs.
For Beyond Meat, which already has a line of breakfast sausages and pre-made burgers under the “Cookout Classic” brand, the new product is the latest effort to win more of the meat aisle at the 26,000 outlets across the U.S. that stock the company’s products.
“We’re thrilled to introduce Beyond Meatballs as they deliver on consumers’ growing demand for delicious and nutritious plant-based meat options without GMOs or synthetic ingredients,” said Stuart Kronauge, Chief Marketing Officer, Beyond Meat. “We are proud to introduce our newest innovation at retailers nationwide and know our fans will be excited about the great taste and convenience of Beyond Meatballs.”
As part of the marketing campaign the company is offering free meatballs and spaghetti or a meatball hero at Beyond Meatball pop-up shops in New York and Los Angeles on Wednesday.
Would-be Beyond Meatball eaters will have to reserve their complimentary meal and pick-up time in advance via The Beyond Meatball Shop’s LA and NY pages on Resy, while supplies last.
Primary care health tech startup Carbon Health has added a new element to its “omnichannel” healthcare approach with the launch of a new pop-up clinic model that is already live in San Francisco, LA, Seattle, Brooklyn and Manhattan, with Detroit to follow soon – and that will be rolling out over the next weeks and months across a variety of major markets in the U.S., ultimately resulting in 100 new COVID-19 testing sites that will add testing capacity on the order of around an additional 100,000 patients per month across the country.
So far, Carbon Health has focused its COVID-19 efforts around its existing facilities in the Bay Area, and also around pop-up testing sites set up in and around San Francisco through collaboration with genomics startup Color, and municipal authorities. Now, Carbon Health CEO and co-founder Even Bali tells me in an interview that the company believes the time is right for it to take what it has learned and apply that on a more national scale, with a model that allows for flexible and rapid deployment. In fact, Bali says the they realized and began working towards this goal as early as March.
“We started working on COVID response as early as February, because we were seeing patients who are literally coming from Wuhan, China to our clinics,” Bali said. “We expected the pandemic to hit any time. And partially because of the failure of federal government control, we decided to do everything we can to be able to help out with certain things.”
That began with things that Carbon could do locally, more close to home in its existing footprint. But it was obvious early on to Bali and his team that there would be a need to scale efforts more broadly. To do that, Carbon was able to draw on its early experience.
“We have been doing on-site, we have been going to nursing homes, we have been working with companies to help them reopen,” he told me. “At this point, I think we’ve done more than 200,000 COVID tests by ourselves. And I think I do more than half of all the Bay Area, if you include that the San Francisco City initiative is also partly powered by Carbon Health, so we’re already trying to scale as much as possible, but at some point we were hitting some physical space limits, and had the idea back in March to scale with more pop-up, more mobile clinics that you can actually put up like faster than a physical location.”
To this end, Carbon Health also began using a mobile trailer that would travel from town to town in order to provide testing to communities that weren’t typically well-served. That ended up being a kind of prototype of this model, which employs construction trailers like you’d see at a new condo under development acting as a foreman’s office, but refurbished and equipped with everything needed for on-site COVID testing run by medical professionals. These, too, are a more temporary solution, as Carbon Health is working with a manufacturing company to create a more fit-for-purpose custom design that can be manufactured at scale to help them ramp deployment of these even faster.
Carbon Health is partnering with Reef Technologies, a SoftBank -backed startup that turns parking garage spots into locations for businesses, including foodservice, fulfilment, and now Carbon’s medical clinics. This has helped immensely with the complications of local permitting and real estate regulations, Bali says. That means that Carbon Health’s pop-up clinics can bypass a lot of the red tape that slows the process of opening more traditional, permanent locations.
While cost is one advantage of using this model, Bali says that actually it’s not nearly as inexpensive as you might think relative to opening a more traditional clinic – at least until their custom manufacturing and economies of scale kick in. But speed is the big advantage, and that’s what is helping Carbon Health look ahead from this particular moment, to how these might be used either post-pandemic, or during the eventual vaccine distribution phase of the COVID crisis. Bali points out that any approved vaccine will need administration to patients, which will require as much, if not more infrastructure than testing.
Meanwhile, Carbon Health’s pop-up model could bridge the gap between traditional primary care and telehealth, for ongoing care needs unrelated to COVID.
“A lot of the problems that telemedicine is not a good solution for, are the things where a video check-in with a doctor is nearly enough, but you do need some diagnostic tests – maybe you might you may need some administration, or you may need like a really simple physical examination that nursing staff can do with the instructions of the doctor. So if you think about those cases, pretty much 90% of all visits can actually be done with a doctor on video, and nursing staff in person.”
COVID testing is an imminent, important need nationwide – and COVID vaccine administration will hopefully soon replace it, with just as much urgency. But even after the pandemic has passed, healthcare in general will change dramatically, and Carbon Health’s model could be a more permanent and scalable way to address the needs of distributed care everywhere.
The 2020 class of Techstars’ Starburst Space Accelerator are graduating with an official Demo Day on Wednesday at 10 AM PT (1 PM ET), and you can watch all the teams present their startups live via the stream above. This year’s class includes 10 companies building innovative new solutions to challenges either directly or indirectly related to commercial space.
Techstars Starburst is a program with a lot of heavyweight backing from both private industry and public agencies, including from NASA’s JPL, the U.S. Air Force, Lockheed Martin, Maxar Technologies, SAIC, Israel Aerospace Industries North America, and The Aerospace Corporation. The program, led by Managing Director Matt Kozlov, is usually based locally in LA, where much of the space industry has significant presence, but this year the Demo Day is going online due to the ongoing COVID-19 situation.
Few, if any, programs out there can claim such a broad representation of big-name partners from across commercial, military and general civil space in terms of stakeholders, which is the main reason it manages to attract a range of interesting startups. This is the second class of graduating startups from the Starburst Space Accelerator; last year’s batch included some exceptional standouts like on-orbit refuelling company Orbit Fab (also a TechCrunch Battlefield participant), imaging micro-satellite company Pixxel and satellite propulsion company Morpheus.
As for this year’s class, you can check out a full list of all ten participating companies below. The demo day presentations begin tomorrow, September 9 at 10 AM PT/1 PM PT, so you can check back in here then to watch live as they provide more details about what it is they do.
A synthetic data API that allows AI teams to generate their own custom datasets up to 99% faster – no tedious collection, curation or labelling required.
A virtual reality content management system that makes it super easy for curriculum designers to create and deploy immersive learning experiences.
The most efficient gas storage systems in the universe.
Lux is developing next generation System-on-Foil electronics.
Developer of next generation pattern based AI/ML systems.
Engineering collaboration software for teams building challenging deep tech projects.
Providing satellite radar-based intelligence for decision makers.
Developing stratospheric Microballoons to capture the freshest, high-res earth observation data.
Real-time remote robotic controls.
Proactive air insights.
Listen to the scientists who study them.
For years, Lucky Palace has drawn fans for its intriguing wine list. Now, they come to help their dear friend Kuan Lim in his time of need.
A Black victim’s family seeks a federal investigation into how the police have handled a shooting after a confrontation with a white man.
Hurricane Laura ravaged southwestern Louisiana, leaving weary residents to assess the toll and map a way forward. Some communities may be four weeks away from even getting power back.
President Trump met with state and local officials in Louisiana after Hurricane Laura devastated the region. Many people still have no electricity or running water.
In Lafayette, La., frustration and fatigue set in after storms, a pandemic and now a fatal police shooting that some residents believe is being overshadowed.
In 2005, Hurricane Rita leveled some coastal communities in southwest Louisiana, forcing changes to building codes and attitudes. As Laura approached, the region was ready.
Although the storm surge was less than projected, Laura was responsible for at least six deaths and extensive property damage.
The hurricane rolled over a coast studded with oil, gas and chemical plants. Other storms have caused the release of toxic substances, often affecting minority communities.
The powerful storm is expected to bring an “unsurvivable” surge of water up to 20 feet in southern Louisiana. “Know that it’s just you and God,” the mayor of Port Arthur, Texas, warned those who did not evacuate.
The hurricane is projected to make landfall near the Texas-Louisiana border early Thursday, with powerful winds and heavy rains likely as soon as Wednesday afternoon.
Hurricane Laura is expected to hit the coast of Texas and Louisiana near the anniversary of Harvey, one of the most disastrous storms the region has experienced.
Damaging storms on converging tracks threaten to strike the U.S. Gulf Coast in quick succession after plowing through the Caribbean.
“We have a one-two punch that’s going to hit the state of Louisiana,” a meteorologist said.
The governor has declared a state of emergency and some areas of Louisiana have issued mandatory evacuations ahead of Tropical Storms Laura and Marco.
Marco is expected to become a hurricane on Saturday and Laura is forecast to produce heavy rain over several Caribbean islands.
The classically trained dancer delighted audiences with her performances and charmed them with her candor.
Bengaluru-based Pixxel is getting ready to launch its first Earth imaging satellite later this year, with a scheduled mission aboard a Soyuz rocket. The roughly one-and-a-half-year old company is moving quickly, and today it’s announcing a $5 million seed funding round to help it accelerate even more. The funding is led by Blume Ventures, Lightspeed India Partners, and growX ventures, while a number of angel investors participated.
This isn’t Pixxel’s first outside funding: It raised $700,000 in pre-seed money from Techstars and others last year. But this is significantly more capital to invest in the business, and the startup plans to use it to grow its team, and to continue to fund the development of its Earth observation constellation.
The goal is to fully deploy said constellation, which will be made up of 30 satellites, by 2022. Once all of the company’s small satellites are on-orbit, the the Pixxel network will be able to provide globe-spanning imaging capabilities on a daily basis. The startup claims that its technology will be able to provide data that’s much higher quality when compared to today’s existing Earth imaging satellites, along with analysis driven by PIxxel’s own deep learning models, which are designed to help identify and even potentially predict large problems and phenomena that can have impact on a global scale.
Pixxel’s technology also relies on very small satellites (basically the size of a bear fridge) that nonetheless provide a very high quality image at a cadence that even large imaging satellite networks that already exist would have trouble delivering. The startup’s founders, Awais Ahmed and Kshitij Khandelwal, created the company while still in the process of finishing up the last year of their undergraduate studies. The founding team took part in Techstars’ Starubst Space Accelerator last year in LA.
Derek Norton and Jeremy Milken have known each other for twenty years. Over their longtime personal and professional relationship, the two Los Angeles-based serial entrepreneurs have invested in each other’s companies and investment firms, but never worked together until now.
Milken is taking the plunge into institutional investing, joining Norton as a partner in Watertower Ventures just as the firm prepares to close on a $50 million new fund.
It’s an auspicious time for both Los Angeles-based businessmen, as the LA venture community sees a wave of technology talent relocating from New York and San Francisco in the newly remote work culture created by the COVID-19 epidemic.
“I see two things happen. One people look at the effects of where the market’s going. We’re seeing a lot more companies that are starting up now as a result of a [the pandemic],” said Norton. “New company formation is happening faster than before covid. [And] a lot of venture capitalists that have relocated to LA. They’ve moved down to LA for lifestyle reasons and they’re saying that they don’t need to go back to San Francisco.”
For Milken, the opportunity to get into venture now is a function of the company creation and acceleration of digital adoption that Norton referenced. “The pandemic is accelerating change in the marketplace. Things that might have taken a decade are taking two years now,” Milken said.
These opportunities are creating an opening for Watertower Ventures in markets far beyond the Hollywood hills. The firm, whose original thesis focused on Los Angeles, San Francisco, and New York, is now cutting checks on investments in Texas and Utah, and spending much less time looking for companies in the Bay Area.
Norton’s latest fund is the only the most recent act in a career that has seen the investor traverse the financial services digital media and the early days of the internet. Norton built Digital Boardwalk, a pioneering internet service provider and the second commercial partner for the trailblazing browser service, Netscape.
Later, at Jeffries Technologies, and the $120 million Entertainment Media Ventures seed and early stage venture capital fund, Norton was intimately involved in bringing tech to market and focusing on early stage investments. With that in mind, the Watertower Ventures group, which launched in 2017 with a small, $5 million fund, is a return to those roots.
The plan, even at the time, was always to raise a larger fund. After founding and running the boutique investment banking business at Watertower Group, Norton knew he had to raise a starter fund to prove the thesis he was working on.
That thesis was to provide a bridge between early stage companies and large technology companies using the network that Norton has built in the Southern California tech and entertainment community over decades.
“We want to take our contacts at Google, Apple, Facebook, Disney, Microsoft, Cisco, Verizon, AT&T, Comcast, and other companies we believe should have a relationship with our portfolio companies, and help the CEOs and management teams more effectively do business development,” Norton told SoCal Tech when he closed his first fund in 2017. “We want to connect them to the right person at those companies to create a commercial relationship. That has a really large impact on early stage companies, who typically don’t have a deep network of relationships, and the ability to get to those type of people. It’s because of our advisory business that we have those relationships, and that’s also why those relationships stay fresh and active, versus people who aren’t in those businesses. It’s almost a full time job to maintain that, and that’s where our value-add is.”
Milken, who has spent his professional career in entrepreneurship, was ready to try investing, and was intimately familiar with Watertower and its portfolio, as an investor in the firm’s first $5 million fund.
“Two years ago we started having those conversations,” said Norton in an interview. “As Jeremy exited his business in September it created the opportunity to go out and raise together as the evolution of our partnership.”
With the new capital coming in, Norton expects to back some 30 to 35 companies, he said. And, in a testament to the first fund’s performance, which has it in the top decile of venture funds for its vintage, Norton said he was able to raise the capital amidst the economic uncertainty caused by the COVID-19 pandemic. Some 70 percent of the existing portfolio has been marked up, according to Norton.
Even though limited partners, the investors who back venture funds, were reluctant to commit capital to new firms in March and April, fundraising returned with a vengeance in June and July, according to Norton. The paper performance likely was enough to woo additional limited partners and individual investors including TikTok chief executive Kevin Mayer, the former head of streaming at Disney.
Mayer’s presence in the firm’s investor base is a testament to the firm’s pitch to founders. “We view fundraising as a massive distraction for these early stage companies from their business. We try to deliver that network that’s ours to those founders,” said Norton.
“I think we’re in a unique position starting with a fresh fund here,” says Norton. “Uncertainty creates opportunity and people are bringing solutions. We haven’t noticed any slowdown whatsoever, we’re working with twenty five companies per week. Since the inception of the fund, we haven’t seen deal flow at this level.”