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- Why Don't VCs Invest in Media Startups?
Why Don't VCs Invest in Media Startups?
It's a True Crime...
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Watch Jim’s pitch on YouTube or listen to the full episode #118 Uncovered: The Business of True Crime.
VCs don’t like media companies.
They are not fast-growing. Their revenue depends mostly on ad sales or subscriptions. And, frankly, they are not tech.
When we raised money for our media company The Pitch, Inc. no one would invest through their fund. We only received personal angel checks.
Media companies don’t grow fast enough to give VCs the return they need for their LPs.
Unless… they leverage technology in some way.
That’s why the VCs on The Pitch wanted Jim Brown to build an AI engine to solve cold cases. They want a technology layer to propel Uncovered beyond ad revenue and membership.
Jim Brown of Uncovered
Here’s the thing:
Tech companies need media in order to grow.
Gimlet Media had a whole department dedicated to creating podcasts (aka audiences) for companies like Squarespace and Microsoft.
And companies like American Express pay to reach our audience. (Have you heard The Pitch Clock?)
Some companies try to start their own media arm, but it’s really difficult. Growing an audience from scratch is haaarrd.
Big tech companies invest billions into their own media. In 2022, Apple and Amazon spent $7 billion and $10 billion on content, respectively. And they are netting losses on that.
But it keeps their audience engaged in their ecosystem and using their technology.
Media makes everything stickier. It just doesn’t generate enough revenue on its own.
So while Jim Brown’s idea to solve cold cases through community is creative and commendable. His business model doesn’t appeal to VCs. They want tech first, media second.
What do you think? Reply and let us know.
Josh Muccio, Jim Brown, Lisa Muccio
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