Meet the investor spotting opportunities for Jeffrey Katzenberg

Growing up in Los Angeles, Anthony Saleh said he found entrepreneurial inspiration in Walt Disney VHS tapes. Co.

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classics such as “The Little Mermaid” and “Aladdin”. After receiving the tapes for his birthday, he would rent them to friends for 25 cents a night.

At the time, Mr. Saleh was not thinking of the company behind these films, nor of the executive, Jeffrey Katzenberg, then largely responsible for their production throughout the 1980s and 1990s. Yet, more than 25 years later, c It is Mr. Saleh that Mr. Katzenberg turns to for help in charting a course out of the rubble formed when his first post-Hollywood business, Quibi, imploded.

Mr. Saleh, 35, was Mr. Katzenberg’s entry point into the tech start-ups the tycoon values ​​well outside of the Hollywood bubble, the two men said. After managing rapper Nas’ music and investments for more than a decade, Mr. Saleh oversees Mr. Katzenberg’s early seed investments at WndrCo, plugging the company into a lucrative but crowded venture capital field after his resounding failure with Quibi, the mobile-video application which closed after less than a year.

Anthony Saleh’s investments on behalf of WndrCo have included Dapper Labs, the creator of NBA digital collectibles company Top Shot.


Photo:

dapper labs/Reuters

“Jeffrey can open any door, but he’s never invested in technology,” said Sujay Juswa, managing partner of WndrCo, who met Saleh when he and Nas invested in Dropbox. Inc.,

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where Mr. Juswa was Chief Financial Officer.

Mr. Saleh’s investments provide a roadmap WndrCo is focusing on after Quibi’s demise, and so far have included Dapper Labs, the creator of NBA Top Shot, the successful digital collectibles company. riding the wave of cryptocurrency last year. Mr. Saleh’s initial $150,000 investment on behalf of WndrCo is now valued at around $11 million.

Mr. Saleh says his background in music, where he had to manage fans and their expectations, helped him guide tech companies that want a similar relationship with users.

“I apply my understanding to other industries because for technology to be adopted by the masses, these companies need to understand how consumers think,” Saleh said.

After an initial investment portfolio of $15 million, Mr. Saleh began fundraising for a new fund worth $100 million, according to a WndrCo filing with the Securities and Exchange Commission. last year.

“I had a supercalifragilistic down.”


– Jeffrey Katzenberg, describing his reaction to Quibi’s failure

Mr. Saleh’s investments also function as a farming system for WndrCo as a whole, which can take larger stakes or potentially acquire the businesses down the road, WndrCo executives said. Quibi’s failure is one of the reasons Mr. Saleh dropped out of pursuing media investments, he said.

“I had a supercalifragilistic down,” is how Mr. Katzenberg, 71, recounts the experience of Quibi failing.

The shorthand video app was created in April 2020 to much fanfare, after raising nearly $2 billion and recruiting stars such as Liam Hemsworth and Reese Witherspoon to contribute to the service’s shows. But the subscriptions never caught on, and the whole company folded after eight months.

Mr. Katzenberg’s work with Mr. Saleh in tech ventures follows the trajectory of other former executives in Hollywood, from Disney chief executive Michael Eisner to former Paramount and 20th Century Fox executive Barry Diller, who have traded the backlot for venture capital and broader investment.

Jeffrey Katzenberg assesses tech start-ups away from Hollywood.


Photo:

Kevin Dietsch/Getty Images

For artists, venture capital investment is not a stable plan B, as some bets never pay off and years can pass without a return on investment. Still, Saleh and his team are capitalizing on renewed interest in seed investing globally, partly spurred by the Covid-19 pandemic, which has boosted sectors that benefit from shutdowns and a increased reliance on technology.

In 2021, global venture capital investment hit a new high of $643 billion, nearly double the $335 billion seen in 2020, according to financial data provider Crunchbase Inc. nearly doubled to $201 billion, with seed funding up 56% to $29.4 billion, according to data from Crunchbase.

The two men recognize that they are not the most likely couple. Mr. Saleh started working for Mr. Katzenberg after meeting him through his son, David, who had invited him to his father’s house to watch football on Sunday afternoons. Elder Mr. Katzenberg and Mr. Saleh bonded over junk food in the kitchen.

Months later, Mr. Katzenberg asked Mr. Saleh for advice on who he should meet to determine what to do with WndrCo, the men recall. Shortly after another meeting at his son’s wedding in Italy in 2016 – conducted minutes before the men were due at the ceremony – Mr Katzenberg offered him a job.

Colleagues describe Mr. Saleh as WndrCo’s barometer of what is spreading in the wider culture. Last year, Saleh pushed one of WndrCo’s top investments, cybersecurity firm Aura, into an endorsement deal with an organization not immediately obvious as a partner: the National Basketball Association team, the Minnesota Timberwolves, which put the Aura company name on the team’s jerseys.

Mr. Saleh knows he is not what some expect when they learn they are meeting an associate of Mr. Katzenberg. They might expect someone older and whiter, Mr Saleh said. When he let his hair grow long during the pandemic and braided it, he wondered, “Do people look at me like I’m a gangster?

The Hollywood offices of Jeffrey Katzenberg’s WndrCo, part of the lucrative but crowded venture capital field.


Photo:

Da’Shaunae Marisa for The Wall Street Journal

He asked Mr. Katzenberg if he should shave. Mr. Katzenberg made it clear – with the help of an expletive – that he didn’t care.

“He understands consumer behavior not by reading market research,” Mr. Juswa said of Mr. Saleh. “He’s right in there.” Dapper Labs Managing Director Roham Gharegozlou added that today’s entrepreneurs often want to connect with their audience on a more cultural level, as opposed to “just software developers who don’t want to meet their customers. “.

It’s a shift in technological thinking that reflects the entertainment industry’s embrace of fandom, Gharegozlou said.

Mr. Saleh knows something about fans. He started investing through his relationship with musician Nas, a successful rapper since his 1994 debut “Illmatic.” Mr. Saleh met Nas in college and soon began to manage his career by booking him concerts abroad to expand his international reach and making him show up on time for shows.

Several years into their working relationship, Mr. Saleh and Nas joined a slew of artists leveraging their wealth and influence in investing, a trend that continues today and includes everything from Ryan Reynolds’ investment in telecommunications company Mint Mobile to Gal Gadot’s backing of Goodles, a plant-based macaroni and cheese startup. It quickly became an important part of the duo’s work.

“The 8 a.m. meetings changed my world,” Nas said.

While working with Nas several years ago, Mr. Saleh sent a cold email to Ben Horowitz, the co-founder of venture capital firm Andreessen Horowitz to discuss ideas, Mr. Horowitz. The two men got to know each other, and in 2013 Mr. Saleh called Mr. Horowitz to tell him that he and Nas were interested in bitcoin after seeing how many “unbanked” people around the world had no money. current account but had a mobile phone… a dynamic that he believes could decentralize finance. When Mr. Horowitz later heard about Coinbase, the cryptocurrency exchange platform, he brought the duo into investing.

Last year, Coinbase Global Inc.

was one of six investments in Mr. Saleh’s personal portfolio that ended in a public offering.

Write to Erich Schwartzel at [email protected]

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