How I Raised It - The podcast where we interview startup founders who raised capital. · Foundersuite.com - software for raising capital

Ep. 288 How I Raised It with Lloyd Danzig of Sharp Alpha VC

·52 min·4 clips

Lloyd Danzig reveals how online lottery sales created a flywheel that produced six of the eight largest jackpots ever.

Lloyd Danzig of Sharp Alpha VC discusses raising his second venture fund with host Nathan Beckord. Sharp Alpha invests in startups within the competitive entertainment sector, which includes sports, gaming, and entertainment where outcomes matter. Danzig explains how raising Fund Two differed significantly from his first fund. He details a six-step funnel process for moving limited partners from initial contact to final commitment. Danzig describes using Special Purpose Vehicles to gauge LP interest and conviction before the main fundraise. He contrasts the high response but low conversion rates of 2021 with the lower response but higher conversion rates of the current market. The fund targets strategic LPs, including publicly traded companies, professional sports team owners, and financial institutions. Sharp Alpha's portfolio includes C15 Studio, which operates free ad-supported streaming channels for leagues like Formula One. Another investment, LINQ, provides fintech and payment infrastructure for major global game publishers. The fund also invested in Jackpot.com, a digital platform for purchasing state lottery tickets. Danzig highlights the surprising flywheel effect where digital lottery sales lead to larger, more frequent jackpots, which in turn drive more sales. He shares insights on the venture capital landscape, noting 2021 will likely be a poor vintage year while 2024 may be one of the best. Danzig explains why his firm avoids taking GP stakes from larger asset management firms despite attractive offers. He emphasizes the importance of having existing LPs recommit to a second fund as a strong signal to new investors. The fundraising strategy prioritized warm introductions from high-quality connectors over cold outreach to ideally profiled targets. Danzig recounts the successful relaunch of Slam Ball, a trampoline basketball league, which secured an exclusive two-year broadcast deal with ESPN. He notes that nostalgia and organic awareness from athletes provided a significant advantage over other emerging leagues. The episode explores why savvy investors might avoid direct B2C gambling startups but favor B2B infrastructure plays in that sector. Danzig's personal background includes being a fantasy football commissioner and working at BlackRock before entering venture capital. The tone is conversational and educational, blending personal anecdote with tactical fundraising advice. This episode is ideal for aspiring venture capitalists or startup founders seeking to understand fund manager psychology and LP acquisition strategies. Listeners with no interest in venture capital mechanics or the sports and gaming sectors may find it less relevant.

As heard by us

A grounded look at how fundraising changes when the raise is fund two, not fund one.

Lloyd Danzig's conversation keeps its focus on the harder, slower path of raising a second venture fund, where lessons from the first round can make the process feel more opaque and more reliant on warm introductions.

Read the full review in PlayNext →

Why you'd press play

You want the real mechanics behind raising a second venture fund.

Read the full recommendation in PlayNext →

Listen to the show on

Apple Podcasts Spotify

Play clips from this episode More from How I Raised It - The podcast where we interview startup founders who raised capital.