The player: Todd Dagres, general partner and founder of Spark Capital
The play: Mr. Dagres founded the venture-funding firm in July 2005 and has invested in six start-ups to date. His portfolio includes online video service Veoh Networks, which inked a deal in July with TNT to promote its shows. Spark also invested $8 million in thePlatform, which Comcast bought in late June for more than $100 million. Mr. Dagres expects to add three more companies to his venture fund this month. He wouldn’t disclose names but said one of the new companies produces and distributes content for mobile phones.
The Pitch: Spark Capital looks for companies at the intersection of media, entertainment and technology. “If you are building a business taking advantage of how technology is creating all these new business opportunities, I don’t think there is another firm that has the capability we have in crossing those boundaries,” he said. “We look for companies that can be revolutionary, where they are going to take advantage of a major trend or change in an industry.”
The numbers: The sale of thePlatform this summer marked Spark’s first “liquidity event.” Mr. Dagres said Spark made three times its investment in the six months it held thePlatform, but he’s not looking for a quick sell. “We would have been happy to hold onto it for another year,” he said. “We really are the talent scouts and are trying to find really good teams going after big problems. We are looking at the best entrepreneurs to solve big problems with the best business … we only invest if we think we can make 10 times our money,” he said. However, he’s not always right and sometimes loses money; he strives for a batting average of about .667, which would mean about two-thirds of Spark’s investments make money, he said.
In the mix: Spark Capital has committed about 25 percent of its $260 million fund, Mr. Dagres said. That percentage should grow to more than 35 percent with the three pending deals. Spark will allocate about one-third of its money to technology enabling companies, one-third into media and content companies and one-third into new media ventures.
The money: Mr. Dagres said he looks for several key elements. “Do they have something that is different? A capability, a technology that is differentiated? Are they well funded? Who brings the money?” he said. With Veoh, he liked that it’s also backed by Time Warner and Michael Eisner. What’s more, he believes Veoh’s advantage lies in its technological ability to deliver high-quality, long-form video over the Internet.
Backstory: Mr. Dagres, 46, was born and raised in Newburyport, Mass. He has three kids, ages 13, 12 and 6. He earned a degree in psychology and economics from Trinity College and an MBA from Boston University. He has worked for Digital Equipment Corporation, Smith Barney, Montgomery Securities and Yankee Group and spent the last 12 years in the venture business. His most recent post was general partner for Battery Ventures.
Who knew: In each of the last three years, Mr. Dagres was named to the Forbes “Midas List,” which ranks top venture capitalists who have created the most wealth for their investors. He also owns a minor league baseball team, the Class A affiliate of the Milwaukee Brewers, the West Virginia Power.