Capital Chaos

 Social Vibe (West Hollywood, CA) just raked in an unusual denomination of $4.12M led by Redpoint Ventures.  The company (which is also called Archetype Media), believes that brands put value in you as an entity within a social network and that they would be interested in sponsoring you.  In return, the thought is that the “brands will actually reward you with the goods you want by supporting the causes that matter to you.”

This is actually a pretty creative idea and with online spectacles like Tila Tequila (MTV Fame), Chris Crocker (Leave Britney Alone) and many others garnering people’s attention on a daily basis, it could actually work out.

Social Vibe works pretty much on any platform (MySpace, Facebook, or any other social network or blog platform that allows you cut and past Flash-based code into your profile).  There is a points system where the more the more activity you have on Social Vibe and influence within all of your social networks online (or at least any place you bring your SocialVibe sponsor), you accrue points.  Those points determine how much is donated to your cause.   You can earn points several ways, including: - Inviting your friends to join SocialVibe, uploading photos to your SocialVibe Profile, adding links to your other social networks on your SocialVibe profile in your My Profiles section, showing off your sponsorships on more of your social networks (click “get code” next to your sponsorship and follow the instructions for other social networks you use), and most importantly just by being ACTIVE on your social networks (the more visitors you have to your profile page the more points you can earn).

Since in the end you are leveraging your identity and exposure for a cause, it seems like a pretty good idea on the surface.  The question is how many people will adopt social vibe and will they be ok with the brand extension into their own brand.  My guess is as long as it’s not intrusive and obnoxious, this could be a success.

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Redpoint Ventures (Menlo Park, CA) is an early stage VC that truly loves the entrepreneurial spirit.  With over $2B under management, 34IPO’s and 54 upside acquisitions, these guys have a pretty good track record.  Even being as big as they are, they do like to invest in younger companies who are early in their lifecycle.  For Redpoint, companies fall into one of three categories:

• Seeking to create new markets or redefine existing ones
• Looking for seed stage or first round institutional financing—or are generating revenue and seeking growth capital
• Want a lead or co-lead investor that will play an active role

These guys have made a lot of investments since they began in 1999.  Their primary areas of interest include:

• Broadband Infrastructure
• Enterprise Systems & Software
• Interactive Media, Content & Advertising
• Consumer Internet Services & Applications
• Mobile Platforms and Applications
• Semiconductor Materials and Devices
• Energy and the Environment

Having made the number of investments that they have, there still seems to be both an appreciation and respect for the entrepreneur and being a part of the process (more so post-funding).

There seems to be two versions of pitching to Redpoint as a VC.  Some say that the firm is very helpful in the pitch process and offer great insight but there is also a group that will say after the pitch is over, they tend to go silent with little feedback post pitch.  I am not sure if the strategy is that if you dont hear anything, it means they aren’t interested but my sense is that even a “no” is better than not hearing anything at all.   This is often a very frustrating sentiment echoed by many people out there trying to raise money and that is they just want to hear something and many times, “no” is better than nothing at all.  While Redpoint does get high remarks once they have invested, I think more people would like the process better if there was some closure either way.

Fouad ElNaggar (consumer Internet, online marketing, digital media, software and cleantech specifically biofuels, carbon sequestration and water-related technologies) and Tim Haley (software, consumer Internet and digital media) are the two guys that seem to get the most accolades to pitch to.  But again, manage expectations if you are going to pitch them and understand that even though they may be very engaging during the pitch, a lack of communication afterwards probably means they arent interested.  Don’t be afraid to keep reaching out to get an answer either.  What’s the worst they can say, “No”? Better than nothing!

Contact:
3000 Sand Hill Road
Building 2, Suite 290
Menlo Park, CA 94025
Telephone: (650) 926-5600