Tripling-down on tech, Lady Gaga manager Troy Carter starts $75M+ fund to spend on startups
It's 2,700 miles from West Philadelphia to Atom Factory in Culver City, Los Angeles. The cliche is to show that Troy Carter, famous for making Lady Gaga famous and increasingly a tech investor, has come a long way.
At the same time, it's also a cliche to say that the worlds of tech and entertainment are far apart, even though they both have their epicenters in California. It's only 370 miles from Hollywood to San Francisco. Carter, who grew up alongside friends Jazzy Jeff and the Fresh Prince of Bel Air, makes the trip often. The distance between the industries of music, movies, and tech, however, has long been an ideological one. Napster alienated the music industry. Hollywood execs have had to watch as Amazon, iTunes, and Netflix have eaten their DVD sales.
But as entertainment becomes more techy, and tech realizes it can work with, rather than purely disrupt, entertainment, the ideological distance is shrinking. Labels appear to be getting used to the idea of working with Spotify. Universal has embraced crowdfunding. Studios are staying put with Hulu. And right there in the middle of the milieu is Carter, stretching his not-especially-long arms out wide so that his fingertips almost touch the sides. As of today, his reach is becoming a little longer – he is announcing the formation of a new fund of between $75 million and $100 million to triple-down on his tech investing activity.
Carter, a small-framed guy with an easy manner who has worked for not only his friends Will Smith and Jazzy Jeff but also P Diddy, spends half his day talking to pop stars under his management such as Lady Gaga and John Legend, and the other half talking to entrepreneurs like Travis Kalanick and John Zimmer. “Sometimes I serve as a bit of a referee,” he jokes about his position between the two warring ride-booking companies. He organizes dinner parties between founders and entertainment executives and has hosted a Lyft community meet-up at Atom Factory, which he formed in cooperation with Capitol Music Group.
Just as Carter has established himself as master of music industry management and peddler of pop culture, he has since 2008 been quietly building a reputation as a tech investor. His AFSquare fund, fueled in part by profits from Atom Factory, has a portfolio of 50 companies that includes Spotify, The Backplane (which he co-founded and serves a social media center for Lady Gaga's fans), Songza, Bread, and Summly, the last two of which have been acquired by Yahoo. He also has the curious distinction of being an investor in both Uber and Lyft, as well as putting money into a few startups that haven't worked out so well: Votizen (merged with Causes), Waywire (better known for its ties to now New Jersey Senator Cory Booker and sold to New York's little-known Magnify), Turntable.fm (on a respirator), and Ecomom (liquidated, in tragic circumstances, after the death of its founder).
Carter doesn't have an organizing thesis or grand narrative for his new fund, which will invest mostly in the seed and Series A stages. He isn't disclosing the details of where the money for the new fund comes from. All that he'll say is that he'll be taking the same approach with his investments as he takes with the musicians he brings in under his management, and describes his investment strategy in one word: "opportunistic."
“I didn’t want to get hung up on a specific investment thesis just for the sake of a thesis," Carter says.
In other words, it's more about the entrepreneurs than any particular industry segment or technology trend.
As part of his tech ramp-up, he has also brought on Waywire cofounder Sarah Ross as AFSquare's head of marketing. Ross's most notable achievement is bringing Ashton Kutcher onto Twitter, a marquee moment in the company's history that helped spur its mass-market growth. Ross appears to have severed most ties with Waywire but remains an advisor to the company. She is one of the first hires in what will be a beefed-up AFSquare presence in Los Angeles.
Just in case the combination of music and tech weren't enough for Carter, he has also launched a soda brand, Pop Water, which is being pitched as a healthier alternative to sugary sodas. Pop Water is so far available only in Los Angeles, but it'll spread to close to 1,000 stores within the next year.
Back in the worlds of tech and entertainment, Carter sees himself as something of a translator who can speak both languages and help people on both sides. That much has been evident in helping to launch Lady Gaga's career through social media, but the benefits also run in the opposite direction. The companies in his portfolio not only get his money, for instance, but they also leverage sway in the music industry. One of Carter's bands, The Ceremonies, has used music curation service Songza to test which song should be its lead single.
Perhaps not surprisingly, he thinks music industry executives should be embracing more technology, and that entrepreneurs should be jumping into the space.
“We need great minds around music," he says. “If entrepreneurs aren’t incentivized, music is going to be stuck in the dark age.”
Brushing off Radiohead frontman Thom Yorke's recent charge that Spotify hurts artists, he says: “Guess what – people had gripes when the CD came along."
Some might consider that the distance between tech entrepreneurs and pop stars might also be marked by degrees of coolness. Mark Zuckerberg might have had a movie made about his company, but he's still a giant nerd. John Legend, on the other hand, fills arenas, and Lady Gaga dazzles in a meat dress on the red carpet. But that, again, is a gap that Carter doesn't see.
Entrepreneurs, he thinks, are like artists. He describes both as "just left of center" and intent on creating things. "These are inventions they're coming up with," he says of the founders. “These kids are out to change the world. They are out to make a cultural impact.”
Armed with a sizable new fund, Carter is now well placed to give this other breed of hopeful world changers the same sort of support he has given the woman in the meat dress.
[Photo via Hubert Burda Media]