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Six months ahead.

Mike Rothenberg

Thirteen Virtual Reality Companies Head to San Francisco

samsung-gear-vr-innovator-editionLate last year, three-year-old Rothenberg Ventures announced it would be launching a startup accelerator, River, that planned to provide $100,000 in seed funding to virtual reality companies expressly. To some, it might have seemed like a calculated, and possibly unwise, bit of counterprogramming. After all, by backing a variety of startups, most accelerator programs are able to hedge their bets and reduce the risk that a whole batch will fall out of fashion.

Yet the San Francisco firm argues that the the 13 companies it has selected, from roughly 200 applicants, is as diverse as any early Y Combinator class. An eye-mounted head-tracking display that helps the physically challenged with daily tasks? Check. Virtual reality technology that changes the way people experience news events? Check. “Everyone keeps calling it a ‘sector,’” says the firm’s founder, Mike Rothenberg. “But just as the Internet is ubiquitous, virtual reality will be ubiquitous in 10 or 20 years. This technology is really going to change everyone’s life.” We talked about it yesterday.

You’re about to welcome 13 companies into your new accelerator program, which will run from February through May. What was the criteria for acceptance?

We were really looking for the most innovative applications across every industry. We also wanted a mix of hardware and software. We didn’t know what we’d get, but we have companies coming from Japan, South Africa, New Zealand France — companies building great companies in education, in pain management . . .

How far along are they?

They’re pretty mature companies for the most part. Some have been building their companies for eight to ten years. Fove, which makes an eye-tracking head mounted display that lets users navigate using their eye movements, has a complete product that works and is amazing.

Have these companies raised capital in the past?

Some of them have some capital. [Fove, for example, passed through Microsoft Ventures Accelerator in London last summer.] But in general, venture capital hasn’t been focused on virtual reality too much yet, so in some cases, the companies hadn’t raised anything prior. We have a South African company that bootstrapped and figured out a way to get customers to pay for VR from the beginning.

What size stake are you taking for your $100,000?

We aren’t disclosing that. We looked at Y Combinator and other accelerators and incubators and tried to learn [from what they do].

Just two companies you’ve accepted are hardware companies. Is that by design? Do you think most people will be creating virtual reality technology for platforms like Samsung Gear VR and the upcoming Oculus Rift?

We didn’t have set targets, but in my opinion, the big companies know what they’re doing. There’s a lot of good hardware being built by great tech companies with deeper pockets; smartphone use will become more common, too. So software and content companies might be a little more of a fit [for this program].

We also just saw so a lot of mind-blowing applications. We have a company, Psious, a smartphone-based tool that’s solving phobias by simulating heights and plane travel and spiders. Another, DeepStream, tackles pain management. Burn victims enter into a world of snow and it lessens their pain. A third company, Emblematic Group in L.A., is doing immersive journalism, showing reporters what it can feel like to be on the streets when a bomb goes off and hopefully making them more empathic in the process.

Why announce the companies now? Why not wait until they’re ready to meet with investors at a demo day you’re staging in May?

We want them to take advantage of their affiliation with River while they’re here in America. Some of them are already planning to move to San Francisco. Many of them are here for three months alone, and we want them to meet with the people they want to meet, including investors.

Those investors will invariably be conjuring up exit scenarios. Aside from Facebook and its subsidiary Oculus, which acquired two VR companies last month, do we know what companies are actively shopping for VR technologies?

The smartest companies. It’s the same for everything. Who’s going to buy the 360-degree action sports camera? Whoever is making cameras and wants to stay in business.

You can find River’s full list of startups here:

DeepStream VR
Description: VR games for pain relief and rehabilitation
Tag line: Virtual Reality games to relieve pain
Founders: Howard Rose, Ari Hollander
Discovr
Description: immersive learning experiences about exploring the ancient world
Founder: Josh Maldonado, Omar Charles, Professor Bernard Frischer
Based in: Toronto, Canada
Emblematic Group
Description: immersive journalism in VR
Founder: Nonny de la Pena
EmergentVR
Description: application to create, edit and share 360 VR experiences with the world using mobile phones
Founders: Peter Wilkins, Chris Wheeler
Website: n/a
Fove
Description: The world’s first headset to use eye tracking to create an immersive experience
Founders: Yuka Kojima, Lochlainn Wilson
Based in: Tokyo, Japan
Innerspace
Description: high quality VR content focused on artistic and cultural expression
Founder: Balthazar Auxietre and Hayoun Kwon
Based in: Paris, France
Psious
Description: platform for mental health practitioners to help patients cure fears using immersion therapy in VR
Founders: Xavier Palomer, Danny Roig
Based in Spain
Reload Studios
Description: independent game studio made of ex-Call of Duty developers and ex-Disney artists
Founder: James Chung
SDK
Description: VR for industrial training
Founders: Shaun Wilson, Christian Yves Fongang
Based in: South Africa
Solirax
Description: education platform for exploration, discovery and creativity
Founders: Tomas Mariancik and Karel Hulec
 
Thotwise
Description: indie game studio focusing on exploration and suspense
Founder: Ariel Arias
Based in: Argentina
Website: thehumgame.com
Triggar
Description: 360-degree capture camera and system
Founders: Bruce Allan and Rob Allan
Based in: Australia
Vantage VR
Description: 180 degree viewing experience for concerts and live events
Tag line: Ticketmaster for VR events
Founders: Juan Santillan, Michael Richardson
Website: vantage.tv
 

Chatting with Tommy Leep of Rothenberg Ventures

Tommy LeepBy Semil Shah

Earlier this year, Tommy Leep joined San Francisco-based Rothenberg Ventures as a partner after spending more than two years at Floodgate as its “chief connector,” helping entrepreneurs get their startups off the ground. We recently chatted with Leep — who was once a product manager at Intuit — about the move, as well as the role that serendipity often plays in the career of the investor.

You recently finished up a tour of duty with Floodgate to join Rothenberg Ventures. Walk us through your transition, what you learned, and why you ended up where you did.

At Floodgate I learned that I love being a “connector.” I love connecting startup founders with people who can resolve their needs. The problem is that no one focuses on recruiting connectors. It doesn’t sound tangible enough. So I had to figure out how I could keep doing this thing I love.

At first, I thought it may be a big tech company. I considered a corporate development role with one company and a community role with another, both of which excited me but [were] too focused on [each] company’s outcome. Those conversations helped me realize that I work best with a broad set of constituents that includes founders, investors, big companies and startup supporters. Then I realized that the best opportunity for me was right under my nose [with] my roommate and Stanford friend Mike Rothenberg, [who] had founded Rothenberg Ventures.

Can you retell the story of how you fell into the venture world? I think it could be instructive for younger folks out there, given how random it is and how much of it is driven via personal relationships.

I met Mike Maples at the Orange Bowl in Miami in January 2011. Before the game there was a rumor going around that Bon Jovi was performing at a private tailgate in a big tent. A friend who had been the Stanford Tree band mascot somehow got wristbands to this tailgate, so we went in. (I was also a Stanford Tree.) We were grabbing burgers when I ran into Weston McBride, a Sigma Nu fraternity friend from undergrad. Weston had pitched Mike a couple weeks earlier, and he offered to introduce me to him there.

We connected over Sigma Nu, which Mike helped restart when he was at Stanford. We talked about Stanford football and this shirt I was wearing that said “I Believe in Stanford Football” . . .[and] Mike asked for one and he emailed me a reminder on the spot. . . A month later we met for breakfast at Hobee’s at Town & Country in Palo Alto for the shirt hand-off, and after that he interviewed me to become Floodgate’s first associate.

Mike and Ann from Floodgate have legendary reputations in the world of early-stage investing. You had a front-row seat. Briefly, what sticks out in your mind about what makes them so good?

Mike and Ann stick to first principles. They do right by the founders they work with. They have deep expertise in giving founders strategic guidance to build their businesses. They measure and learn from their investments and misses. And supporting founders is authentic to their personal missions.

At Rothenberg Ventures, how is the fund and platform set up? How do you work to attract the best founders to your firm?

At Rothenberg Ventures, we are very different from most other firms. We don’t spend Mondays in meetings and we don’t sit on boards. . . We offer on-call advisory to our founders, connect with almost all of them each month, and help connect our founders to the people they need to meet to help build their businesses. We believe in extreme giving . . . Our capital comes from a hundred founders and investors who also love giving back to founders and the venture community. We facilitate interactions through dozens of tech talks, dinners, small gatherings, and events like [a recent event for founders at AT&T Park in San Francisco]. . . For example, one of our recent initiatives is a co-working space in SOMA where we work side by side with 60 entrepreneurs. Our founders identify with us because we look like them — we’re a startup investing in other startups.

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