Financial Times’ story on the interest by VCs on entertainment websites online, helped in no small part by over 50% of people having broadband connections, and the falling prices of bandwidth and hosting… It’s interesting that so many of the companies VCs are eyeing have - according to this article - been around since 1998! I am not one to say negative about others, but man, if a company has been around since 1998 and not offered a lucrative exit strategy to investors, something is wrong. Injecting more capital and putting it in a corner from an excessive capitalization standspoint is not a smart route to go now… but maybe that is just me. Read more:
The digital transformation of the media business was much talked about in the late 1990s when billions of dollars were invested in digital ventures, only to be written off. Now it is becoming a reality due to the rise of high-speed internet connections, which make it easily possible to watch video on the web.
In the first quarter of the year, US venture capitalists invested $396m in the media and entertainment sector, 80 per cent more than in the previous quarter and the biggest amount for four years, industry data shows.
Analysis by PricewaterhouseCoopers and the National Venture Capital Association showed about half the media investments were in companies focused on delivery content via the internet.
More money will be available. US venture capital firms raised $4.26bn in the first quarter of 2006, 69 per cent more than was raised last year, according to Dow Jones VentureOne.
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