In the aftermath of the historic Goldman Sachs-Facebook deal, another legendary Wall Street firm is prepping a new-media fund to get in on the action. J.P. Morgan Chase has set aside at least half a billion dollars to invest in social media startups. This current infatuation with tech could be a sign that the local startup scene has new peaks to conquer. Though this bit of news is positive for social media in general, keep in mind the J.P. Morgan money is for late-stage investing in companies that are more or less household names these days, i.e. Facebook, Twitter, Groupon.
The Wall Street Journal had first dibs on the J.P. Morgan fund story and it’s the Valentine’s Day article they ran that has spread among various news outlets. In it, reporter Anupreeta Das explained the implications of Wall Street’s newfound interest in social media:
“It isn’t clear whether J.P. Morgan plans to invest directly in target companies or buy and sell shares on behalf of clients. But the investment fund will target “late-stage” private companies, or those with an up-and-running business model, steady revenue and cash flow, according to people familiar with the situation. A J.P. Morgan spokesman declined to comment.
The planned investment fund, being pitched mostly to wealthy investors, is the latest sign of recognition by Wall Street deal makers that social-media companies could be big money makers. Such companies, including shopping website Groupon Inc., straddle the technology, consumer and media sectors.”
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