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Investment Thesis: George Zachary

Posted on Tuesday, Oct 3rd 2006

I interviewed George Zachary, as a follow-up to the recurring theme in conversations with entrepreneurs: “VCs are only interested in coming to the rescue of victory”. George happens to be one of the authentic and consummate consumer internet and media investors – someone who did not blow with the wind on the topic of consumer investments. Now, of course, consumer is back with a bang, and George is not fat, but certainly happy!

SM: Please describe your background, to help entrepreneurs understand your point-of-view.
GZ: I’ve been involved in technology – either operationally or as a venture capitalist for over 20 years. I am one of the few venture capitalists that has played both in consumer entertainment from leading the Nintendo64 development business to being on the board of a movie production company to being a co-founder and co-investor in a consumer web service, Shutterfly. (Note: Shutterfly just went public.)

SM: What stage are you looking to invest in over the next 6-12 months?
GZ: Focused on seed and Series A investments. We now have a 50/50 mixture of both.

SM: What segment(s)?
GZ: Still focused on the massively growing opportunity in online consumer entertainment, consumer information and identity, and associated infrastructure.

SM: What market dynamics do you look for?
GZ: Real users with real demonstratable strong usage patterns in terms of the consumer deals. A deal with high switching costs and low customer acquisition costs. And an intellectual property position helps as well.

SM: What size of investment are you looking to make?
GZ: Anywhere from $250K for seeds to $20M for Series A.

SM: What kinds of deals are you interested in seeing?
* Do you fund capital-intensive deals?

GZ: Prefer not to.

SM: * Do you fund built-to-flip deals?
GZ: Prefer not to.

SM: * Do you fund “hits” businesses?
GZ: Yes.

SM: Describe your ideal entrepreneur.
GZ: Vision, focus, drive, aggression, intellect. Someone who can act as a crystal to build the whole organization around.

SM: Which VCs do you like to work with as part of a syndicate?
GZ: Lots.

SM: What is your thesis on entrepreneurial / investment opportunities given the state of the market? What markets are likely to crash? What markets are likely to open up?

GZ: Don’t know… (SM: Read, won’t tell you!)

Notice, George answers a bold YES to my question on funding HITS businesses, which most of Silicon Valley would say no to. For my own perspective on this topic, read the posts:
The Timer and
Twenty-First Century’s Best Venture.
I fully expect Silicon Valley to have to go in the direction of funding largely Hits businesses in the future. When it does, George is one of the people to call upon, because I do believe he has the right intuitive feel for such businesses, and is not a geek who has suddenly reinvented himself as a consumer VC.

This segment is a part in the series : Investment Thesis

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[…] George Zachary, Charles River Ventures – Does seed investments, mostly in consumer plays, and open to any entrepreneur – proven or not. Alessandro Biral, Dali Hook Ventures – Does seed only if they already know you. Sumir Chadha, Sequoia Capital – Does seed, especially because his focus is India, and there are hardly any seed funds in India. Looking aggressively for deals, and competing in a very hot market. Alex Osadzinski, Trinity Ventures – Does seed only if they already know you. […]

Sramana Mitra on Strategy » Blog Archive » The Seed Quest Continues Friday, October 6, 2006 at 3:36 PM PT

[…] I like this. George and Bill, congratulations on leading the industry! I hope more VCs replicate this program. […]

Sramana Mitra on Strategy » Blog Archive » Quickstart: CRV’s Seed Strategy Thursday, November 2, 2006 at 8:52 PM PT

[…] George Zachary just invested $10 Million in Geni at a $100 Million valuation. Geni has already received a lot of coverage, so instead of reiterating its basics, let me just point you to a few: Venturebeat, NextNet, Techcrunch . […]

Sramana Mitra on Strategy » Blog Archive » Geni : Addictive, Yes, BUT $100 Million Valuation? Tuesday, March 6, 2007 at 8:59 PM PT