Techtalk/fisher/12″/dt1st/mark2nd
A self-described evangelical venture capitalist has hit town, swearing that he can turn Los Angeles into the next Silicon Valley.
Timothy Draper, considered one of the leading venture capitalists in the Bay Area, recently started a new fund in Los Angeles called Zone Ventures. Dedicated to extremely early-stage start-ups (he has previously backed two guys in a garage without a business plan), Zone has a $25 million war chest raised from the Los Angeles Community Development Bank.
“I absolutely do not believe that Silicon Valley is a one-time-only explosion in the tech industry,” Draper said. “Given enough time, Los Angeles can be bigger. It just needs someone to bring together the technology, the businesses and the universities here to replicate the proven formula.”
Following an if-you-build-it-they-will-come plan, the firm envisions turning a downtown strip into the new Sand Hill Road. Zone executives will work toward getting venture capitalists and small tech companies to congregate around its Figueroa Courtyard location.
Draper also is starting a networking organization called “The Zone Club,” another self-conscious attempt to recreate Silicon Valley’s casual networking environment.
The Zone’s area of investment interest is relatively broad, ranging from Internet applications to semiconductor designs, as long as the technology contains some sort of barrier to entry. The company has already started to review proposals.
Draper and his associates know there are a handful of industry groups similarly working toward turning the city into a tech powerhouse. They hope to work with the various organizations to achieve that goal.
“The critical difference is to have money behind the community groups,” Draper said. “That’s how you change a city’s fundamental economic model.”
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Marking its first foray into the American market, Germany’s media mega-conglomerate ProSieben Media AG has entered into a strategic alliance with Sherman Oaks-based Arete Image Software Inc.
Arete designs software used primarily for water special effects in movies it simulates natural phenomena like waves, creating the illusion of a stretch of ocean under the stars, for example. Its product was used in “Titanic,” “The Truman Show” and “Waterworld.” It was the company’s role in the blockbuster “Titanic” that attracted ProSieben executives’ attention and sparked negotiations.
“This may seem like an odd match on the surface, but ProSeiben saw in us a means for them to become more dominant in the German entertainment industry,” said Arete President and CEO Stanton Rutledge. “For us, it gives the ability to create new software and reach new markets.”
Detailed terms of the deal were not disclosed. The Munich-based company gets a 20 percent stake in Arete, two board seats and exclusive German marketing rights for the software in exchange for a cash infusion.
With the money, Arete intends to branch out and design new special-effects software for the motion picture, television and consumer industries.
ProSieben executives have indicated that this is only its first of several investments in American media companies.
Sara Fisher can be reached via e-mail at [email protected].
