Tag Archives: investing

Why are VCs suddenly investing in news orgs?

VCs and investors have been pouring millions of dollars into new media ventures recently, ranging from Ezra Klein’s Vox to Glenn Greenwald’s First Look to Jonah Peritti’s BuzzFeed. Why the sudden interest? Typically, a VC invests in a company with the hope for a large return many times the initial investment once the company goes public or is acquired. Do any of these new news organizations really have that short-term potential, and is the investment creating the right kind of incentive structure to practice quality journalism? Gawker’s Nick Denton doesn’t think so:

Not every media company has chased venture capital funding, however. Gawker Media, for example, has bootstrapped its entire operation since its founding in 2003. It is, however, an exception.

“We never raised money because we fund growth from cashflow,” said Nick Denton, CEO of Gawker Media by email. “And the journalistic pursuit of the truth is not compatible with outside investment. It’s impossible because of venture funds’ sensitivity to criticism, short time horizons and attachment to conventional wisdom,” he said.