Eqal Buys out Spark Capital

Recently, Eqal finalized an agreement to buy out one of its original investors, Spark Capital. Less than two years ago, Spark Capital was one of the major investors in Eqal’s $5 million dollar round of financing. While on first look, the fact that investors are jumping ship might seem troubling but in reality it is a win-win situation for both parties.

One of the major reasons for the split was Eqal’s shift from an original content producer to a web service company. Last year Eqal’s redirected its focus towards developing its content platform, Umbrella, and began developing networks for various celebrities such as Anthony Zuiker and Paula Deen. According to Eqal CEO, Miles Beckett, Spark was more interested in the original content creation and less excited about building platforms for other content creators. Eqal, on the other hand, felt that its future lie with helping other content creators by providing technology, advertising support, marketing and distribution.

Purchasing Spark’s interest in the company allowed Eqal to move ahead with its own agenda while partnering with other investors who shared Eqal’s vision. Since the buy out, Eqal has brought on additional investors such as Scott Banister, Paypal board member and chairman of the social network site, Zivity, and fund manager, Wojtek Uzdelewicz. The advantage for Spark is obvious; it gets its pre-crash, money back, unlike Spark’s investment in another web video startup, Veoh, which went bankrupt last month. In fact, given how little money there is in online video right now, not losing money can be considered a win.

The separation between the two companies was amicable. Also, the fact that Eqal had the resources to buy out one of its major investors is, at least, an indication that the company is doing well. For its part, Beckett is very happy with the company’s decision to move into a service roll. Furthermore, he believes that there still is an opportunity for people to make money producing their own content. He wants to position Eqal as the company to help these ‘micro-studios,’ by providing the necessary services that they need in order to monetize their content.