From: bluefire@well.sf.ca.us (Bob Jacobson)
Subject: INDUSTRY: Some thoughts on investing in VR
Date: Sun, 4 Apr 93 16:43:37 -0700



Worldesign has been looking for investors lately, and our experiences
may be of interest to others doing the same.

First, we find many, many small investors willing to pony up $1,000,
$5,000, or $10,000 (maybe) for a shot at wealth and a sort of
immortality.  The overhead in serving these small investors, however,
can be daunting.

Second, we find few larger investors ready to even seriously speak
about VR.  I don't mean on-screen, 2D or 2-1/2D implementation of CAD
or whatever; there is plenty of interest in underwriting traditional
forms of software.  But fully inclusive or immersive VR is seen by
most of the investors with whom we have spoken as something impossible
to attain, a will-o'-the-wisp.  There needs to be better press and
education regarding application possibilities -- and these have to be
other than more military and governmental jobs, which are seen as more
evidence of impracticality.

Third, investors inevitably want demonstrations of the technology,
even though what they are investing in is the means to create the
technology.  Yes, it's Catch-22, but what isn't about VR?  We need
more support from the vendors -- not just the availability of
technology, which is welcome, but a whole-hearted effort to help out
building showcases.

Worldesign has sought its investors among potential clients and
strategic technology partners, so our experiences may not be
generalizable to companies looking more broadly for support or whose
investment strategy is not tied up with their growth strategy.

I would recommend, for firms like ours, that a good deal of personal
networking go into the research preceding investment solicitations and
that, as did General Magic, you try to find an "angel" (in GM's case,
John Sculley) who can introduce you to a few big players able to act
decisively.  It's taken us fully four months to pull together just a
small roster of respectable opportunities.  Take at least six months
or a year to do it right (if you can afford the time).  Capitalize
well and early!

As for North Americans looking for European and Asian money, my
feeling (and it's only that, waiting to be confirmed) is that it's
highly nationalistic (especially if it's state money) and comes with
requirements (like local tech transfer) that smaller firms may find
onerous.  On the other hand, this capital welcomes opportunity, which
is more than can be said for domestic investment capital in the U.S.
The latter apparently exists only to play in the markets and generate
paper wealth, not the technological machinery necessary to create new
wealth.

I would be glad to discuss this further with others in the business
having the same or other experiences.  I'd love to hear from current
or potential investors, either publicly or via email, to balance my
comments with your own.

Bob Jacobson
Worldesign, Inc.