I had the chance to talk with Paul Weiskopf who is among those heading the Adobe Ventures investment program. When Adobe made the announcement at MAX, I thought it was huge, and I know a lot of developers were very interested. Adobe has set up a page for Adobe Ventures with some information about the program and the place to send an email if you're interested in pitching an idea. Now that you have an entry point, hopefully this post will give you more information about what they're expecting.
This is not a Venture Capital Fund
The most important thing that I got out of the conversation is that this isn't a "fund" at all, it's a corporate investment program. The distinction is subtle, but very important. Because it isn't a fund, the $100 million figure is just being used as a guideline. That money isn't sitting somewhere waiting to be invested, and it isn't a fixed dollar amount. That means the total investment could be more or less than $100 million when all is said and done. Paul said that a good benchmark for annual investment was to divide that number by 3 or 5. So on average, Adobe is looking to invest $33 million to $20 million a year.
What Kinds of Companies?
As you would expect, Adobe is looking to invest in companies that are developing innovative technologies and are currently leveraging the platform or intend to. He also said that Adobe is looking for situations that Adobe has an interest in working closely with the startup. The "rounds" that they are looking to invest in range from A rounds to C rounds, but will primarily focus on the B round. This means that they'll be looking for startups that are decently established. They're not putting a target on the stage of the startup, but because of the round preference, its safe to assume that they expect to see some traction from the company.
They also aren't planning to lead any investment, so any money that comes from Adobe will come along with other Venture Capital money. When I asked about specific numbers, Paul said that they're looking at everything from a single partnership with just one other VC fund who would lead the round to a round that was led by a number of funds. The impression I got was that Adobe had a lot of flexibility here.
Strategy of the Program
One thing that really struck me was the strategy of the fund. The fund falls under John Brennan, Senior Vice President of Corporate Development. In line with this, the first focus is on the strategic benefits that Adobe will derive. This comes in the form of a vested interest in a company that is doing very interesting things with Adobe technology. They will able to turn that into a lot of press, and a great showcase for the technology. The secondary goal is of course, to make money, but I think the formation of Adobe Ventures as a corporate investment program and not a fund gives them some leeway in what they get out of the arrangement.
Who is Getting Money?
So far, three companies have received funding under the new program. Bunchball was the first (to my knowledge) and the amount was not disclosed. This was something they did in concert with Granite Ventures. This month they invested in mobitv in a C round which puts Adobe with a lot of other investors in the company (press here). Finally, a Japanese company, ColorZip received funding from the program. Adobe is listed on the investors page, but I haven't seen any more info than that.
All in all, after my conversation with Paul, I'm excited for developers on Adobe technology. I think this is going to bring a lot of people into the platform and get them to check out Rich Internet Applications for the first time. The structure that has been set up seems win-win for both Adobe and the companies they invest in. I think that's going to foster a lot of innovation and bring Adobe even closer to their community. All of these are good things.