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I haven't listened to the podcast, but according to the backchannel article linked above, the money came from the funds themselves > The $5 million that went i

I haven't listened to the podcast, but according to the backchannel article linked above, the money came from the funds themselves > The $5 million that went into launching River Studios came from Rothenberg Ventures’ second and third funds...One LP says that in a phone call with investors in August after Rothenberg had told them about the River Studios investment in an email, one grilled him on why River Studios wasn’t in the annual reports, and says Rothenberg responded that he was still getting around to the disclosures. Rothenberg’s employees also say they were kept in the dark. Two former employees tell Backchannel that when they asked Rothenberg how River Studios was funded, he told them only that there were outside investors. Another recalls Rothenberg saying he paid for it himself. Rothenberg disputes this, saying that all investors had been made aware, adding, “We’ve been very public about it.” [https://backchannel.com/mike-rothenbergs-vc-firm-was-young-splashy-and-loaded-with-cash-now-it-s-all-come-crashing-down-e76fa076c7c5 https://backchannel.com/mike-rothenbergs-vc-firm-was-young-s...]

endorphone 9y ago
Later information is much more vague about this, and one of the core complaints is that he used the management fees of his funds to sponsor companies that arguably competed with holdings of the funds - a serious conflict of interest. This fund was started with a ridiculous fee structure of 17.5% of total investment upfront, and then apparently no going forward fees. Like a "lifetime VPN" subscription, the economics don't make sense and it is a folly arrangement for all sides.
- dmschulman 9y ago
  Also from the Backchannel article: "Several former Rothenberg Ventures and River Studios employees now say they didn’t understand why River Studios was green-lit. One former employee noted that River Studios also competed for clients and market share with at least two of Rothenberg Ventures’ portfolio companies that were already in VR film production, Triggar and vantage.tv. (Triggar didn’t respond to requests for comment, and vantage.tv’s CEO Juan Santillan wrote in an email, “I don’t agree with many of the things that were going on at RV…” but added, “RV[’s] extended team has been great to us.”)"

endorphone 9y ago

Later information is much more vague about this, and one of the core complaints is that he used the management fees of his funds to sponsor companies that arguably competed with holdings of the funds - a serious conflict of interest. This fund was started with a ridiculous fee structure of 17.5% of total investment upfront, and then apparently no going forward fees. Like a "lifetime VPN" subscription, the economics don't make sense and it is a folly arrangement for all sides.

dmschulman 9y ago
Also from the Backchannel article: "Several former Rothenberg Ventures and River Studios employees now say they didn’t understand why River Studios was green-lit. One former employee noted that River Studios also competed for clients and market share with at least two of Rothenberg Ventures’ portfolio companies that were already in VR film production, Triggar and vantage.tv. (Triggar didn’t respond to requests for comment, and vantage.tv’s CEO Juan Santillan wrote in an email, “I don’t agree with many of the things that were going on at RV…” but added, “RV[’s] extended team has been great to us.”)"