Las Vegas – Plenty of venture capitalists were in attendance here at the 2007 International Consumer Electronics Show, an expo generally reserved for companies showing their products to retailers, distributors and media.
Many of the VCs came to check in on current investments and scout out potential trends.
Boulder-based venture capitalist Jason Mendelson said his trip to the CES gave him an opportunity to check in with companies his firm, Mobius Venture Capital Inc., has invested in.
“I don’t see CES as somewhere that a venture capitalist is going to go to find companies to invest in,” said Mendelson, managing director for Mobius. “Rather, it’s a forum to stay current and see what’s next in consumer electronics, and let that information guide one in future investing and current managing of existing portfolio companies.”
Don Rainey, general partner for Intersouth Partners, moderated a standing-room-only CES panel discussion last week titled “Follow the Money: The Emerging Technologies That Are Getting Venture Capital Dollars.”
“Venture capitalists typically don’t come to this show, but technology and innovation is moving faster,” said Rainey in an interview.
Other venture capitalists on the panel said that areas to watch include PC-to-TV integration, products built on open-source platforms and Wi-Max.
In the case of devices and services that bring online video content to the television, Rainey said that several companies will try to come up with similar solutions to challenges that consumers face integrating their devices.
But the challenge for venture firms is to fund the company that will become a standout.
“Venture capitalists have a tendency to overfund every growth category,” he said. “Our business is to fund the winner.”
Mobius is an investor in Sling Media, makers of the Slingbox, a device that lets users view live and stored television content anywhere an Internet connection is present. Sling made its debut last year with a single item. At CES this year, there were three new versions of the Slingbox on display, along with accompanying services.
Other companies are trying to follow Sling’s lead, and that might make it hard for them to find venture capital. Generally, once a category of products makes a strong showing at CES, they may not be good candidates to fund.
“Every time venture capitalists have the answer to the next big thing, it’s usually too late,” said Mike Goguen, partner at Sequoia Capital, which has invested in companies such as YouTube, Yahoo, Paypal and Apple. “They’re better off going where the masses are not.”
But Mendelson said CES can help venture firms stay ahead of the masses.
“Sometimes you look at what’s missing,” he said.
One company not exhibiting at CES – but present at the venture panel – was Intamac Systems of Northampton, United Kingdom, which develops home security-monitoring systems.
“I thought it was pretty good insight on what (VCs) are investing in,” said Nadim Saad, Intamac’s international business development director. “It was good that they gave examples of companies and how they can change the industry.”
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
