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Davis founded LaFace Records with L.A. Reid and Babyface.[citation needed] LaFace subsequently became the home of TLC, Usher, Outkast, Pink and Toni Braxton.[citation needed] He founded Bad Boy Records with Sean "Puffy" Combs and it became the home of The Notorious B.I.G., Craig Mack, Combs, Mase, 112, and Faith Evans, although Davis would later admit that he never quite understood rap music.[citation needed] In 1998, Davis signed LFO from European Success. LFO charted #3 with "Summer Girls" in 1999, and went on to multiplatinum success.

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In 2013, Davis publicly came out as bisexual in his autobiography The Soundtrack of My Life.[44] On the daytime talk show Katie, he told host Katie Couric that he hoped his coming out would lead to "greater understanding" of bisexuality.[45] The autobiography was the basis for the two-hour documentary Clive Davis: The Soundtrack of Our Lives.