Cleveland Cavs Owner Who Snagged LeBron Just Invested in Rap Genius
Cleveland Cavaliers owner Dan Gilbert must have the hot hand. The Comic Sans-loving billionaire just won the dramatic toss up for LeBron James. Gilbert also boxed out other investors for a spot in a new round of funding for Rap Genius that is worth $40 million. Backing braggarts, it seems, is now an investment philosophy.
Business Insider just broke the news. When I asked Rap Genius CEO Tom Lehman about it earlier today, this is what he said: "LOL - how do these rumors get started?"
Here's the post I had ready before that obfuscation:
Andreessen Horowitz—the Lannisters of Silicon Valley—invested $15 million in Rap Genius and its three cofounders (all twenty-something Yale graduates) back in 2012 and also participated in this current round. Gilbert has invested in startups before. He's the founder and chairman of Rock Ventures, a managing partner at Rockbridge Growth equity, owns roughly 40 percent of downtown Detroit, and a heckuva pen pal. According to Crunchbase, Gilbert has backed BlueFin Labs, which was acquired by Twitter.
In 2012, Marc Andreessen said that Rap Genius would use that initial $15 million investment to transform the crowd-sourced hip-hop explainer site into an "Internet Talmud" by using the same tool to annotate rap lyrics, but applying it to poetry, legal documents, the Bible, etc. At the time, cofounder Mahbod Moghadam told me Rap Genius planned on making money by selling "the dopest ads of all time," as well as merchandising and premium memberships. He used the example of law firms who would pay to annotate legal cases because "Lexis and Westlaw are jank."
Moghadam resigned from the company in May and gave up his board seat after posting inappropriate comments on the manifesto by Elliot Rodger, the Santa Barbara killer. An email from Moghadam also tipped Google off to spammy tactics the company had been employing to improve its search rankings. Traffic tanked when Google punished the company for its SEO scheme. The founders said they resolved the issue with Google, however Rap Genius has since disabled Quantcast, the analytics site that was used to illustrate its 60 percent descent in December.
They still turn up pretty high if you search for lyrics on Google, however. And earlier this week Rap Genius signed a deal with Warner/Chappell, which means the startup now has deals with all three major music publishing companies, avoiding a lawsuit for unlicensed use of lyrics. Move fast, offend things—seems like something Rap Genius and Gilbert have in common.
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