For Silicon Valley VCs -- LA Finally Matters! Oculus Rift & Maker

LA-based content-driven digital media investment is the new super-hero of the VC world!

LA’s venture and startup/Silicon Beach community needed a big digital media “win.”  And, it got it with Disney’s $500-$950 million mega-deal with leading MCN (multi-channel network) Maker Studios.  This was followed up in rapid succession by Facebooks’s acquisition of SoCal-based pioneering "tech meets content" company Oculus Rift for $2 billion.

Not surprisingly (in fact, as expected), now even the tech-centric (and nearly universally skeptical) VC world of Silicon Valley has taken notice in meaningful numbers.  I have confirmed this with several leading national tech and VC-savvy journalists.  You see, big numbers mean big eyeballs searching for the next big opp (and these are massive numbers).  Now many non-believers of LA-based investment/startups have converted.

As they should ....

As just one example, significant VC returns on the LA-based content-driven investment world of MCNs show no signs of abating.  First, last year, DreamWorks picks up AwesomenessTV.  Then, Disney lays down big big cash for Maker.  Then, in rapid succession, AwesomenessTV becomes the sensei and picks up Big Frame.  And, we ain’t done yet.  As I recently said in Variety before the Big Frame deal, “MCNs are now top-of-mind for all the major studios.  There certainly will be a flurry of M&A activity in the next 12-18 months.”  In a later blog post, I even identified and discussed in detail several MCNs that are “ripe” for the picking (adding Latino-focused MiTu Networks later to my list -- and now also add Collective Digital Studio to that list).  I wrote a guest article in Variety that lays out the reasons that MCNs matter to major media and entertainment companies -- outlining the rationale for Disney’s massive cash commitment.  Won’t repeat those here.

Why am I bullish in LA-based content-driven digital media investment opportunities, and why do I believe that Northern California investors will now begin to focus real significant resources on such SoCal/Silicon Beach investments?   Check out my recent interview in TechCrunch in which I lay out my overall belief set that we are in a new golden age of content -- SoCal’s and Hollywood’s creative community empowered and enabled by Northern California technology.

Silicon Valley finally meeting Silicon Beach.  In other words, the long-awaited world of real meaningful convergence.  Oculus Rift is a perfect example of this.

The LA digital media/tech scene is vibrant, and that energy and innovation feeds on itself to attract (and keep) more entrepreneurs which, in turn, generates more energy and innovation.  Oculus Rift’s and Maker Studios’ mega-wins also finally underscore that “it” can, in fact, happen here -- which, again, attracts (and keeps) more entrepreneurs.

And attracting more venture capitalists ... who, in turn, tell two friends ... and so on ... and so on ....  Good to Great’s beloved “Flywheel Effect.”

LA’s/SoCal's long awaited tipping point?