That was the message in March 2008, when Silicon Valley stalwarts Accel Partners and Venrock partnered with the William Morris Agency and AT&T (T) to invest in Southern California’s early-stage digital media market. They called their brainchild The Mail Room Funds, as an homage to the legendary William Morris trainee program that had turned out such superstars as Michael Ovitz and Ron Meyer. No one ever said how much money it had, but speculation ranged from $30 million to $50 million.

The benefits of MRF for each party seemed obvious:

• For Accel and Redpoint, it would be a foothold in the burgeoning Los Angeles startup market, plus a way to find talent for other digital media portfolio companies.
• For William Morris, it would present new work and exposure opportunities for clients. Remember, MRF was launched shortly after the Hollywood writers strike, in which many studio-phobic writers and actors found refuge at digital media startups.
• For AT&T, this mostly seemed to be about money (i.e., a good investment). There also was an argument that MRF was part of the carrier’s evolution into a content provider.

Mail Room Fund was led by Richard Wolpert, who previously had served as chief strategy officer at RealNetworks and president of Disney Online. He also was an advisor to Accel Partners, and once had been a partner with Ron Burkle’s Yucaipa Companies. In other words, he was well-versed in both the digital media industry.

Also involved was Paul Bricault, who had spent more than a decade at William Morris — where he had led both the global marketing and digital media practices, plus sat on the agency’s board of directors.

MRF got off to a fast start, participating in a $1.55 million Series A round for Sometrics, a Los Angeles-based company that provided social application metrics (it since has morphed into a virtual monetization platform for online game publishers). It then went on to invest in Cocodot, a Hollywood-based online invitation startup aimed at women, and AdventureLink, an Altadena, Calif.-based online discovery engine for adventure vacations.

Then… nothing. No more portfolio companies.

Last May, an entrepreneur complained on TheFunded that he “had a couple warm intros and never got a response.” Sometime later, the fund’s website eliminated boilerplate about its “unique investment vehicle to seed and grow innovation in Southern California,” and the rotating photos of Hollywood talent that had been discovered working in various studio mail rooms (like Jack Nicholson). In its place were just two words: “Under construction.”

Well, now consider the construction project to be canceled.

Fortune has learned that Mail Room Fund is no longer making new investments, although it will write follow-on checks for its three existing portfolio companies. No successor vehicle is planned.

Sources pin most of the blame on William Morris, but not the William Morris Agency (nor William Morris himself, who died in the 1930s). Instead they blame William Morris Endeavor, which is what the firm was renamed following the 2009 merger of WMA with Endeavor, the smaller rival talent agency run by Ari Emanuel (brother of Chicago mayor-elect Rahm, and inspiration for Jeremy Piven’s character on Entourage).

“You’ve got to realize that William Morris Endeavor was a very unusual arrangement, because the smaller group basically took control of the larger group,” explains a Los Angeles investor familiar with the situation. “Mail Room Fund had been spearheaded by the old WMA leadership, but Ari cleared a lot of them out.”

Among those Emanuel pushed out was Paul Bricault.  At around the same time, Wolpert suffered a family tragedy that understandably resulted in a lengthy leave of absence.

Without an internal champion or full-time external manager, MRF floundered.

I’m told that Wolpert continues to manage out the legacy portfolio, while also maintaining his venture advisor role at Accel Partners (which recently did a Hollywood deal of its own, pumping $40 million into Legendary Pictures). Bricault had several angel investments, and today resurfaced as a venture partner with Greycroft Partners (co-investor with WRF on Sometrics).

And sources say that Emanuel is considering some sort of direct investment program of his own with William Morris Endeavor, but it’s unclear if such a thing will actually materialize. WME did not respond to a request for comment.