How VCs are looking at investing in VR experiences
We’re all looking from an investment standpoint at VR and AR. If you look at the acquirers in the space and the investors and the space, you’ll notice that in the early days, the Oculus—Oculus first started this revolution. Around the time they were acquired by Facebook, the investors in the space were looking mainly at technology companies. Fast forward to now, we’re seeing Disney and Fox and the other studios that Technicolor services investing in the space. As well as Technicolor itself and our competitors. It’s an important piece of data, to know who will be potentially buying you or your companies, giving you those awesome exits.
I can make a couple of quick observations. Both Hollywood, which I’ve been close to for a long time, and the bay area, where I’ve spent a lot of my time dealing with video game publishers—the community around financing films and the community around financing tech companies have a very difficult time understanding what interactive entertainment is. Interactive entertainment, for a very long time, has been a key storytelling medium. I think of game design and interactive entertainment as very often being a business model in itself. Some designers are so talented that they can come up with ways of engaging consumers. We’ve seen this in the mobile revolution. You can design around a specific engagement application that brings in consumers in ways that surround them with story, but also engage them and make them part of the storyteller’s vision.
Now I see, for the first time in my career, a true convergence coming in VR. That’s why I’ve committed my career to what I consider the best storytelling talent, doing primarily interactive storytelling, in the VR medium. My hope is I can help create a new type of financing mechanism for these companies.
I just got back from a trip to Asia, where this was especially interesting. People are talking about all these experience centers. It’s exploding in China and Korea and others. Hundreds of experience centers opening up everywhere that are just dying for amazing content. They’re all looking to us to find out how we get this content over to the U.S. from all these content creators in China and other Asian countries.
VR is in a unique position right now where if we strategize correctly, we can capitalize on that and help U.S. content creators get access to money from abroad that will enable them to continue with not only capital, but also alternative forms of funding, so I’d be curious to hear your thoughts on that pipeline to Asia.
The typical models have been, as opposed to pure commercial art, where generally you go to people who do slate financing–versus a publishing play, where you’re building infrastructure around your content that is about cross-promotion and customer acquisition. Increasingly we’re seeing things in mobile game development that are going to apply to VR, which is becoming a social platform. That’s things like live operations.
A few of the filters I go through—of course, like everyone said, team is the most important thing. But I start my filter from genre. There’s lots of historic data around genre, whether it’s film genres or game genres. What are the sales cycles there? Looking at those cycles, you can see the ups and downs.
From genre, does a team have technology that supports a genre in an interesting way? That’s where it becomes more of a venture bet, where you can see there’s some kind of technical competence that undergirds that genre. Finally, is that team capable of doing something interesting with the technology in that genre? Do they have a history that ties them to this particular project? What are their contacts in this space? I’m always a bit nervous when I see entrepreneurs, particularly in a new market like this, who are jumping in without a wide set of contacts related to what they’re doing. As it turns out, in the early stages of a platform, the early adopters are other people in the industry.
See the full story here: http://venturebeat.com/2016/08/15/how-vcs-are-looking-at-investing-in-vr-content/?curator=MediaREDEF