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Venture capital fund Sharp Alpha advisors has announced the closing of Sharp Alpha Fund II, an oversubscribed $25m fund investing in early-stage sports, gaming and entertainment businesses.

Fund II background

Founded in 2019, New York-based Sharp Alpha Advisors holds investments in multiple gambling sector businesses, including SharpSports, SnapOdds, Kero Gaming and JefeBet.

Existing investments in the firm’s Fund II include C15 Studio, which recently emerged from stealth mode as the operator and distributor of Formula One’s new streaming channel.

Previous investments in the fund included Almost Friday Media, Jackpot.com and Betcha, which was subsequently acquired by Vivid Seats.

The fund is targeting seed investments between $1m and $2m, while Sharp Alpha also operates a co-investment vehicle providing limited partners with the ability to invest additional capital in select deals alongside the fund.

Fund II is backed by a variety of US financial institutions, pro sports team owners, public companies, family offices, venture capitalists and funds of funds, among others.

Sharp Alpha managing partner Lloyd Danzig (pictured) told NEXT.io that more details on the fund’s strategic limited partners will be released later this year.

Having exceeded its stated capital raise goal of $25m, Fund II has expanded the size of its deal team, Sharp Alpha added.

Favourable period for investment

“The competitive entertainment category is experiencing exponential growth but at the same time is desperate for innovation that early-stage companies are best positioned to supply,” said Danzig.

“We are entering the most favourable period in the last 15 years to bet on great founders.”

Elaborating further in comments made to NEXT.io, Danzig added that “The combination of an investor-friendly negotiating environment, profitability-centric founder mindsets, evolving consumer preferences, and secular technological tailwinds make for a period that resembles 2009 in its return potential at the early stage.”

As for the businesses the fund is likely to target, Danzig further explained: “We look for incredible founders who inspire us. While there are always trends we are bullish on, we also look for companies that aren’t easily described by catchy buzzwords. 

“No one was looking for micro-betting companies when Simplebet raised their first round, just as no one was looking for a short-term home rental marketplace when AirBnB was founded. We like to back amazing entrepreneurs who tell us what the next big trend in competitive entertainment will be.”

Sharp Alpha advisory board and partners

Having exceeded the fund’s $25m capital raise goal, Danzig said: “We are grateful to our existing LPs for re-upping into Fund II as well as the amazing roster of new institutional and strategic investors we brought on board. 

“Though it is undoubtedly a difficult capital raising environment, we still see strong demand from LPs looking for specialist fund managers with a unique edge that can deliver outsized risk-adjusted returns.”

In addition to providing investment capital, Sharp Alpha also provides companies with resources and opportunities including additional fundraising, revenue generation, brand awareness, commercial strategy, financial planning and product development.

The fund also benefits from a highly experienced advisory board, including former head of leveraged finance at Merrill Lynch, Keith Horn, former Empire Resorts chairman Emanuel Pearlman, Caesars Entertainment vice chairman Don Kornstein, and Redwood International Sports founder Daniel Bernard, among others.

“The value of experience and wisdom when making complex decisions cannot be overstated,” said Danzig.

“We leverage the accumulated expertise of our advisors’ decades of institutional investment management and public company board director experience to ensure we are operating a best-in-class investment firm,” he concluded.

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