James Slavet on funding online video ventures

Speaking about Funding Online Video Ventures at NewTeeVee Live 2008's VC Panel entitled "Online Video Investment Trends" James Slavet (partner at Greylock) explains their valuation framework for investments, whose foundations stand on three pillars:

• Identify teams which have strong product leadership and instinctive comprehension of the markets that the pursue.
• Pursue market components/segments that are large, growing, and of strategic importance.
• Favor business models that scale with capital efficiency (i.e. increasing returns-to-scale).

Within online video, there are a few trends that Greylock finds interesting. One is the migration of professional video content to the web, which may emphasize how material originally produced for SD broadcast/cable/satellite becomes re-purposed. James cites the statistic "25 percent of the views generate 95 to 98 percent of the revenue". Mr. Slavet would be attracted to online video ventures that bolster the volume, positioning, and profitability of the professional video content owners/distributors. For the sake of having some examples, here are two companies where James presides on the board of directors:

Auditude helps content owners/publishers expand professional online video inventory, grow video impressions, manage and sell ads. Clients include WB, MTV, Comedy Central, and MySpace. It also streamlines how advertisers target professional online video.

Kongregate is a game site that builds ad revenue around high-traffic graphical content on a massive scale through features such as:

• highest rated and new games
• community forums (e.g. developer collaborative, flash programming, art, music, technical support)
• developers upload gateway
• contests and challenges
• categorical game directory
• ratings, news, and leaderboards

While vastly different in their outward form and purpose, both conform to the three pillars. Lesson learned.

http://richreader.blogspot.com/2008/11/james-slavet-on-funding-online-video.html

(Note: Republished to feature on VatorNews homepage)