Watch out Sand Hill Road VCs, there’s a new group of newspaper companies ready to start funding and partnering with startups.
The Local Angel Network is looking to find and fund startups that can help newspapers grow diverse sources of revenue and foster a culture of innovation in their organizations. Like the many venture capital companies clustered along Sand Hill Road in Menlo Park, California, the Local Angel Network will vet proposals from startups and decide whether to invest in them.
“This gives newspapers exposure to exciting new technology that will accelerate their digital offerings, grow their digital audience more readily—and grow their digital advertising revenue,” said Greg Osberg, CEO and founder of Revlyst, a revenue catalyst firm that connects early-stage digital startups with the media industry.
The idea for the Local Angel Network was conceived nearly simultaneously by Osberg and Nelson Clyde, the president of T.B. Butler Publishing Co. Inc., and publisher of the Tyler (Texas) Morning Telegraph. At a panel discussion at Inland’s NextTech, Osberg had mused about something Clyde had also been thinking about: A way that newspapers could collectively become involved as VCs for startups.
“It really was uncanny timing that he came to be on the meeting agenda,” Clyde said. “People were hungry, I’d say across the industry, for new ideas, new revenues and new diversification strategies.”
So far, five newspaper organizations have signed on to the Local Angel Network, which kicked off formally in July and which will meet again just before this year’s NextTech session in Chicago Oct. 23.
In addition to Clyde’s T.B. Butler Publishing, the network includes Schurz Communications, Morris Communication’s Morris Publishing Group, Woodward Communication and United Communications Corporation, publisher of the Kenosha (Wis.) News.
Clyde and Osberg said they would like to grow the group to about a dozen newspaper organizations capable of raising from $500,000 to $1 million for a startup with potential.
“The more companies we have in this network, the more we can attract some really exciting startups,” Osberg said. “Individually none of these companies alone could make an investment that large but collectively they can.”
Clyde and Osberg emphasized that the Local Angel Network is not a fund that collects money from its members and makes investments.
“It’s very intuitive in that one member may participate in one project, but not in the next,” Clyde said. “But everybody will get a look at everything. Greg’s desire is to present these companies and get them working with either an investment collaboration and bizdev (business development) or both.”
Because the organizations in the network are publishers of mostly smaller papers, they allow the startups to prove up their concepts and see how they would work in smaller and geographically diverse markets, Clyde said. Startups are also attracted to the demographics of newspaper subscribers, he added.“This is a pool any type of tech startup would like to swim in.”
For newspaper companies, Osberg said, the network offers some potent potentials: potential high return on investments, potential pilot programs—and the potential to immediately impact audience and revenue growth.
The initial members of the Local Angel Network are “tired of letting the big guys have all the fun,” Osberg added.
For more informatoin on the network, contact Greg Osberg at firstname.lastname@example.org.