If venture capital were Boggle, Ryan McIntyre would have just scored a 17-letter word, the highest achievement for the game’s aficionados. The former Mobius Venture Capital principal and Boggle champ, who recently relocated to Boulder to join early stage firm Foundry Group, has had two portfolio investments sell in the past six months for a combined total of more than $1 billion.
The latest, Sling Media, maker of the addictive Slingbox TV-shifting device, sold to EchoStar Communications in September for $380 million. Back in July, Google acquired e-mail security provider Postini for $625 million.
McIntyre, a self-described gadget nut and prodigious blogger—recent posts on ryanmcintyre.com include a definitive review of the iPhone and musings on Giant Magnetoresistance—dismisses the synchronous exit timing as “simply coincidence.” The investments he led for Mobius in Postini and Sling date back to 2001 and 2004, respectively, with Postini in particular well-primed for exit, he says.
That’s not to say McIntyre’s track record hasn’t aided in Foundry’s current fund-raising push. In a September regulatory filing, the Boulder firm of five Mobius ex-pats disclosed that it has raised $159 million for a second fund from limited partners including Guardian Life Insurance, the University of Texas Investment Management Co., Parish Capital, and Procific, a subsidiary of the Abu Dhabi Investment Authority.
At Foundry, McIntyre’s strategy is straightforward early stage venture capital, targeting investments of $5 million to $15 million per company. His focus areas—IT management, RSS, and human-computer interaction—have kept him busy reviewing hundreds of deals a year. But not so busy, McIntyre tells VCJ, that he hasn’t found time for more important pursuits, like watching The Colbert Report with his Slingbox while sitting in DC traffic.
Q. You’re posting some nice returns this year, with acquisitions of Postini and Slingbox. To what do you attribute this streak of good fortune?
A. It is a bit like learning about the ‘overnight success’ rock band that has been touring tirelessly for a decade before one of their songs breaks out and becomes mainstream. VC, particularly early stage VC, is a long-term business. We invested in Postini six years ago and in Sling three years ago. We stayed active as investors during the post-bubble downturn, and that approach is starting to pay off.
At Foundry Group [which also manages investments from the Mobius portfolio] we are also thematic investors. At any given time, there are a half-dozen or so broad areas of technology that we are focused on. Postini fell within our email theme, and Sling fell within our digital-home theme.
Q. Sling, which I guess is kind of a digital away-from-home play, is one of a few companies in the digital home space that’s done well. Which investments seem most likely to succeed?
A. While Sling was arguably the first digital home investment we made, we had been looking assiduously at every digital home and digital media opportunity that came through the door and had seen 50 or 60 companies before we encountered Sling.
I wouldn’t necessarily characterize Sling as an away-from-home play, based on my own personal experience with the device. While I certainly use the Slingbox regularly to watch TV away from home I find myself using it when I am at home. I’ll fire up my laptop to watch TV when I’m in the basement on my exercise bike, when I’m cooking in the kitchen, etc.
I think the digital home space is a tough one to play in, which is why Sling was the only company we invested in. That said, I think more device/appliance/service plays are the kinds of companies that will succeed.
“It is a bit like learning about the ‘overnight success’ rock band that has been touring tirelessly for a decade before one of their songs breaks out and becomes mainstream.”
As a consumer, I’m personally a huge fan of Sonos, and I’ve bought multiple units. Recently I’ve also been intrigued by the launch of Vudu, an IP-based video-on-demand set-top-box. If they can get the price below $399 relatively quickly (price is OK for early adopters, but not for mainstream) and expand the breadth of their movie library to be on par with Netflix’s, they will have something really compelling.
It is also possible that internet/content services targeted at the big gaming consoles—the Wii, Xbox360 and the PlayStation3—could become interesting, though right now Nintendo, Microsoft and Sony are fairly strict gatekeepers for their platforms.
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