New York City-based venture capital firm Sharp Alpha Advisors has closed its second investment fund, which is on track to raise more than $25 million in capital.
The Sharp Alpha Fund II focused on attracting investment in early-stage sports, gaming, and entertainment businesses. It targeted seed investments ranging from $1 million to $2 million and aimed to invest in 15 “competitive entertainment” startups such as technology firms working within the sports betting, fantasy sports, and streaming industries, according to managing partner Lloyd Danzig.
The fund is backed by public companies, U.S. financial institutions, pro sports team owners, top venture capitalists and other investment streams. It also runs a co-investment vehicle that gives limited partners the chance to invest additional capital in selected deals alongside the fund.
In addition to the investment capital offered, the firm provides a range of resources and opportunities including revenue generation and fundraising, brand awareness and commercial strategy, and product development.
Danzig said the fund was oversubscribed, leading to its closure.
Existing investments in the second fund include C15 Studio, the operator and distributor of Formula 1’s new streaming channel.
The first fund, which closed in October 2021, raised $10 million for betting technology start-ups and provided financial support to the likes of Prophet, the first regulated U.S. sports betting exchange. Other previous investments have included Jackpot.com and Betcha, the latter of which was acquired by Vivid Seats Inc. in December 2021.
Sharp Alpha’s advisory board includes the likes of Don Kornstein, vice chairman of Caesars Entertainment and former executive at numerous gaming companies; Emanuel Pearlman, former chairman of Empire Resorts; and Keith Horn, founder of Loring Capital Advisors, former COO of Elliott Management, and global head of leveraged finance at Merrill Lynch.
Sharp Alpha focused on intersection of gaming, sports, and tech
Danzig, recently named to Business Insider’s Top Venture Capitalists in Sports and ELG’s 40 Under 40, said in a release there is a big opportunity where sports, gaming, media and technology intersect.
“The competitive entertainment category is experiencing exponential growth but at the same time is desperate for innovation that early-stage companies are best positioned to supply,” Danzig said in a statement. “We are entering the most favorable period in the last 15 years to bet on great founders.”
Danzig added to Forbes that Sharp Alpha looks to invest in companies that provide “an adrenaline rush that makes you feel connected to the content that you’re engaging with, that makes you really lean forward and become enraptured in whatever the activity is and the people that you’re enjoying it with. That’s what we think is one of the most economically and experientially desirable places to build technology and therefore to invest.”
“No one was looking for micro-betting companies when Simplebet raised their first round, just as no one was looking for a short-term home rental marketplace when AirBnB was founded,” Danzig added. “We like to back amazing entrepreneurs who tell us what the next big trend in competitive entertainment will be.”
