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AtomFilm secures Biondi, WB funding

Possible $5 mil in seed money

NEW YORK — AtomFilms, a new company that distributes short films to the Internet and TV outlets, has secured a second round of financing from Frank Biondi’s WaterView Partners, Warner Bros. Online, employees of Allen and Co. and Arts Alliance.

Biondi, the former CEO of Universal Films, will join the AtomFilms board.

AtomFilms president and founder Mika Salmi declined to comment on how much money his company raised, but sources pegged the amount at north of $5 million.

Salmi said that the strategic value of AtomFilm’s new investors will exceed their monetary investment.

“Warner Online and Arts Alliance have new media knowledge,” said Salmi. “Frank Biondi and Allen and Co. have tremendous knowledge in traditional media and have fantastic contacts.”

AtomFilms also announced that it will give stock options to all the filmmakers who sell their short films to the company.

“We’re the first entertainment company to actually give the artists equity in the company,” said Salmi. “If we go public or get bought, they will share in the wealth.”

Atomic ‘Net

AtomFilms is banking much of its future on Internet distribution. In this medium, many observers believe that short films have a much better shot of success than full-length features. The major cable Internet companies @Home and Roadrunner don’t even accept video product longer than 10 minutes.

Biondi’s stake is one of the first investments made by his new investment fund WaterView Partners, which will have raised close to $150 million by the time it closes June 30.

WaterView has invested a tiny amount of money in three or four Internet companies, including AtomFilms, but Biondi said Tuesday that was not indicative of WaterView’s broader investment plans.

“Less than 10% of the fund will be invested in Internet companies, but there happens to be a tremendous deal flow in the Internet arena right now whereas conventional deals come more slowly,” Biondi said.

WaterView, put together by Biondi and longtime media money manager Rick Reiss, will invest in a “very broad definition of media,” Biondi said.

Arts Alliance is a London-based venture capital company that focuses exclusively on the emerging online market. Salmi credits Arts Alliance for bringing in the other investors.

AtomFilms has acquired a library of 100 short films. The company has licensed films to outlets such as HBO, @Home, Go Network/Infoseek, the Sundance Channel, Warner Bros. Online, Continental Airlines and Mr. Showbiz.