In an era where information flows ceaselessly and attention spans dwindle, the realm of media stands at the forefront of our society’s evolution. Every day, we’re bombarded with a cascade of news, stories, and content, all vying for a fleeting moment of our precious attention. In this fast-paced landscape, innovation isn’t just a luxury; it’s the lifeblood that keeps the media industry-relevant and engaging. But how can we ensure that the flames of innovation burn ever brighter? The answer lies in the dynamic world of venture funds.
Catalyzing Creativity through Capital: The Venture Fund Advantage
Imagine a world where groundbreaking storytelling platforms, revolutionary content distribution methods, and immersive experiences capture our imaginations with unprecedented force. Conceive of fixing news, musicians getting paid, streaming TV actually streaming everything in one place, and social media you control. Such a world isn’t just a distant dream; it’s within our grasp, when we concert our efforts to coalesce investor interest in media in the entities, portfolios, communities, and platforms, that can make the most of capital investment in media technology. Venture funds, those dynamic reservoirs of capital dedicated to nurturing startups and innovative ideas, hold the key to unlocking a new era of media innovation.
The Ripple Effect: Why Venture Funds Matter
At the heart of media innovation lies a delicate dance between creative minds and financial support. Venture capital offers a synergy that’s not just essential but transformative because by injecting financial backing into promising media startups, venture funds serve as more than mere investors; they become catalysts for change, enablers of creativity, and architects of the media landscape of tomorrow.
Breaking Barriers, Seizing Possibilities: A Playground for Pioneers
In a field where the boundaries between old and new media are constantly shifting, venture funds resource the playground where pioneers can experiment, innovate, and redefine the rules. Picture a startup that’s developing a platform merging virtual reality and journalism, allowing users to step into the shoes of journalists reporting from the frontlines of global events. Or consider a company that’s revolutionizing content discovery through artificial intelligence, tailoring stories to individual preferences with uncanny accuracy.
How do we do it? Specialization. A 2022 survey Raise LP’s (Limited Partners, the people who invest in venture capital funds) found that 72% of Limited Partner investors want Sector Specific funds. “What types of VC managers are of greatest interest to add to your portfolio?”, 72% said they’d prefer sector specialists, and about 10% would want geographical specialists. Only 18% were most interested in generalists.
Take, for instance, the story of a16z Game Fund One, they just hit their one-year mark. Last year, they raised their first $660M fund focused on games. They shared the deck that helped made it all happen.
Yes, I said games. While most of the world still thinks video games are played by kids and young adults, this is a sector of our media economy that has grown to dwarf all others; I want to share with you their narrative to investors in fund, to help you appreciate how and why far more investors should take their lead and be considering dedicated media funds as well:
They structured their pitch deck into a discussion and overview of the games industry; rightly appreciating that there are still a lot of people outside the industry that needed to understand the possibilities, especially as we’re all dropping words like “metaverse” which still few can explain.
Initially, the focus of their fund was on studios, web3, and infrastructure, but a year into the fund, they are pivoting just as startup founders must; leaning where the market is going and informing their investors of those changes. The need for balance is important while remaining updated with the new trends.
“Given the economic downturn, we’ve spent innumerable hours working with our portfolio to maximize their probability of long-term success. This is when the operating team is so powerful. But the games market is resilient!”
– Andrew Chen, partner at Andreessen Horowitz
The Media Landscape Reimagined: Nurturing Diversity and Change
Venture funds do more than just fuel individual innovations; they nurture diversity throughout media. Venture capital doesn’t emerge and thrive because of a startup; it requires an ecosystem and community in which founders can take risks, learn from mentors, connect with partners, and mitigate the downsides of early venture work so that the Funds can emerge formally structured and delivering returns. By supporting startups that bring new voices and narratives to the forefront, venture funds champion a media ecosystem that reflects the multiplicity of human experiences. From documentaries exploring untold stories to platforms amplifying marginalized voices, these ventures redefine media’s purpose and impact.
Consider the case of General Catalyst, a passionate venture capital firm that invests in transformational companies. Backed by a visionary venture fund, their mission reached millions. They see themselves as catalysts—agents of change—working to transform companies, industries, and the world around us.
This is accomplished when venture capitalists (the partners who form funds), work with the experience in a sector of the industry, and draw from platforms and communities serving the industry, to capture not just why but why now.
Venture funds are the threads that weave innovation into its very fabric. Their role isn’t just to support startups; it’s to ignite revolutions, to transform industries, and to shape the narratives that shape us.
We’ve seen this trend emerging for some time. Increasingly, larger Funds have been hiring Heads of Platform, developing communities of their own, or even operating media companies that serve to create awareness, aggregate data, and influence, the interests of the investors. This trend of Funds development as Platforms is what caught my attention in Andrew Chen’s brief of the a16z Game Fund One which caught my attention with this (and from which these slide screenshots are shared):
The right side of that slide looks almost identical to what MediaTech Ventures does today and I was thrilled to see it because we set out to build a company solving the problems in venture capital and the economic development of innovation. That, if we’re going to make funding far more available to entrepreneurs, what might we do so that the ecosystem serves the needs of founders?
All of these slides are copyright by a16z, shared here since their one year anniversary brief just shared them with subscribers to @andrewchen. We’re not affiliate, just, perhaps, of some shared mind about this. I hope he doesn’t mind my sharing the slides a bit further and offering a broader take on how their approach to Game Fund might be a lesson learned by more venture investors and fund managers. If I might help you understand how and why this works, let me know and book some time.
