February 12th, 2011 at 8:24 am
Angel Investors Are Changing Business As We Know It
By: Instutional Investor
The year 2000 wasn’t great for liberals in America. That was the year, of course, that a bunch of uncounted hanging chads in Florida helped George W. Bush defeat Al Gore in the U.S. presidential election. Even worse was 2004. That year, Bush won again, prompting a wave of right-wing voices to ensconce themselves in the media. The political agenda was dominated by the likes of Rush Limbaugh on the radio, Bill O’Reilly on television and Matt Drudge on the Internet. Suddenly, liberals didn’t have a voice.
That’s when angel investor Kenneth Lerer decided to act. A prominent liberal activist and veteran communications professional, Lerer felt there needed to be a response to the conservative voices. Together with California columnist and commentator Arianna Huffington, in 2005 he launched the Huffington Post, a web portal that would aggregate political commentary and news from a liberal point of view. To finance it, Lerer initially put up $1 million of his own money and he and Huffington brought in several other seed investors, including former America Online COO Robert Pittman.
A venture of passion and politics, the Huffington Post didn’t have much of a road map at first. Indeed, many media critics mocked the Greek-born Huffington for getting involved in such a seemingly unplanned endeavor. But Lerer and Huffington were able to attract enough journalistic firepower to quickly make the Huffington Post the most influential liberal media platform in the U.S. In 2006, Lerer keyed a second round of financing, raising $5 million for the Huffington Post, bringing in venture capital firms SoftBank Capital and Greycroft Partners. (A year later the Huffington Post raised another $5 million from the same group of investors.)
Over the past two years, the Huffington Post has expanded its footprint to cover social and cultural issues. Coverage of media and entertainment has brought criticism — the news web site has been accused of straying from its roots — but also greater visibility and increased traffic. A section on divorce, for example, has generated a wave of new visitors. A third round of financing, in November 2008, this time a $25 million infusion from Westport, Connecticut–based Oak Investment Partners that valued the portal at $125 million, has given the Huffington Post financial staying power and the ability to call its own plays. Last year the Huffington Post significantly added to its New York operations and signed on new heavy-hitting contributors.
The Huffington Post, which became profitable last year, is a real business, with estimated revenue of more than $30 million in 2010 and $60 million projected for 2011. Today, the Huffington Post announced that it had agreed to be acquired by AOL for $315 million — $300 million in cash and the rest in stock — a windfall for its inve
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Exactly for 2011 !!
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