Behind the Money: Who Are the VC All-Stars in Online Video?

/ Sep 13, 2013


No one would describe the VC landscape — as it pertains to online video — as being a crowded field. But that doesn’t mean there aren’t some very smart people investing some serious cash into the ecosystem — whether it’s going to video startups looking to solve a business problem or new-media companies looking to disrupt the old way of doing things.

This week, VideoInk has profiled some major VCs in the online video landscape, but as is the norm with things like this, Rick Heitzmann, Mark Terbeek, and Allen DeBevoise aren’t the only ones helping push online video into the future. Here are other VC “all-stars” you should know of.

Adam Lilling

adam lilling

Companies: Plus Capital, Launchpad LA

Invested in: Big Frame, ZEFR

When VideoInk spoke with Adam Lilling, the founder and managing partner of Plus Capital and co-founder of Launchpad LA, he argued that like any other media company, content-centric online video startups need to build an audience first. “In an ad-supported business, you need to have scale before you can get to monetization,” he said.

But when time comes for monetization, Lilling strongly advised that startups have dual revenue streams. “No media company succeeds with a single revenue stream,” he said. “Whichever vertical you go into, you better believe you will need a dual revenue stream, whether that’s ads plus subscription or some other mode.” Though he cautioned, while VCs are far more likely to invest in startups that have the ability to find multiple revenue streams, he is also aware that this does not need to be in place from “day one.” “You just have to believe that there is an opportunity to do more than just ad-revenue or subscription-revenue,” he said.

Equally important, is ensuring that the startup isn’t reliant on a singular platform — which is the issue many MCNs are looking to solve right now. “Building a business on top of one platform is tough,” said Lilling. VCs look for “dependable” programmatic scale, according to Lilling. In the case of MCNs, this means proving they can also scale an audience away from YouTube.

Dana Settle


Company: Greycroft Partners

Invested in: Maker Studios, Fanhattan, Viddy

A partner at Greycroft, Dana Settle heads up the firm’s west coast office. Within the wide web video space, Settle has notably invested in Maker Studios, video-sharing app Viddy, and Fanhattan, a video discovery app that offers access to film and TV content from services like Netflix and Hulu Plus.

In a 2011 interview with Bloomberg, Settle said: “[Greycroft is] very excited about the whole area of online video,” calling the online aspect of television as being the most exciting area. “The place people are watching television content is online,” she said. If she was bullish about digital video back then, when there were still many questions about the viability of web video, one can only imagine her thoughts on the space now.

During the interview, she said YouTube, Netflix, and iTunes will all be “real competitors” to traditional television networks in several years. While there is still much debate if you can refer to YouTube as a true television competitor today, no one has trouble grouping Netflix among television networks, especially after the year the streaming service is having. So Settle was, at worst, one-for-two (electronic sell-through is a whole different ballgame), which isn’t bad if you consider the traditional VC model of successes-versus-investments.

Mark Suster


Company: Upfront Ventures

Invested in: Maker Studios

Within the online video world, Mark Suster is known as one of the first investors in Maker Studios. As embattled as the MCN is, you can’t deny its current place in the online video world — the most recent numbers from the company peg it at 4 billion monthly views and more than 260 million subscribers across over 60,000 channels. In other words, if you measure by audience, Maker Studios has some serious scale, which is quite the opposite of what most VCs think of when considering investing in a content business.

In fact, a year after Suster initially invested in Maker, he wrote in a blog post: “As I talked about [the MCN model] with several friends in Silicon Valley I always heard the same refrain, ‘we don’t invest in content business — they are ‘hits driven.’ I had to laugh at the irony of this. For one, the consumer-driven startup world has become immensely hits driven. You need star power of entrepreneurs surrounded by star power angels & VCs who in turn get tons of press from adoring journalists who are insiders amongst this crowd of tech cognoscenti.”

It’s clear Suster is passionate and optimistic about Maker’s future, and would probably point to the fact that the MCN has raised $62 million in the past year as evidence that others are as well. For Suster, though, it might pay to be first.

Who else belongs in this group?

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