Economic meltdown hasn’t deterred JLA Ventures from investing in digital media

The stock markets are taking a beating and venture capital is at an all-time low, but that hasn't stopped J.L. Albright Venture Partners (JLA Ventures) from seeking out promising investments. In the past 11 months, the Toronto-based VC firm - which also co-manages the $150-million Blackberry Partners Fund - has invested $36.5 million in Internet, digital media, e-commerce and mobile companies, including $5 million in seed funding for GlassBOX's Bite TV relaunch and AUX launch.The current economic climate has forced many VC firms to scale back new investments and new forays in markets, and while JLA is being cautious, it isn't shying away from good deals."In this climate, a lot of people are focusing on the portfolios they have today and aren't looking at other areas," JLA partner Rick Segal tells Canadian New Media. "We think that there is still real revenue possibility in new areas of content delivery and the content themselves and all the affiliated businesses that surround that industry.""I think we're trying to raise the bar in terms of the management we're after and the execution of the plans," he adds, "but (current economic conditions) haven't changed our appetite to do investments or our outlook on companies that will be successful."According to the Canadian Venture Capital Association, activity in Canada's VC market continued to slow in Q2 2008. In all, $302 million was invested across the country in the second quarter, down 31% from the $436 million invested at the same time in 2007. Disbursements were also down 10% as compared to Q1 2008. Consequently, Q2 2008 activity was the lowest recorded in almost three years. JLA, on the other hand has maintained consistent investments between 2007 and now, with equity in 19 companies. To date, the 12-year-old company has invested over $250 million in 36 companies - and boasts an impressive portfolio - including QuickPlay Media Inc., Q9 Networks Inc. and B5 Media Inc. JLA is also a co-manager of the $150 million Blackberry Partners Fund, a fund that focuses on the mobile market- including entertainment, location-based services and m-commerce applications.JLA's focus on new media and other next-generation communications isn't accidental. The team behind JLA has considerable experience in telecommunications, e-commerce, software,, as well as stints with Bell Mobility, Chapters Online and Kodak Canada, adding further insights into the market."It's not new media over other industries, we look at all IT and other industries, and we look at each in terms of return on investment," cautions Segal. " It's not one thing over another, but when you look at things like BiteTV - which has lots of carriage and connections with cable and crosses different mediums - with cable and Internet and satellite and all that sort of stuff, it's the next generation of what's going on. From my perspective, this is very, very important.""I would like to believe that the openness of our firm allow guys like BiteTV (to come to us) and Bite is a huge opportunity. They can have their pick of a lot of people who want to get into that deal, and we're honored and delighted that they picked us. They want to work with us and I think that's because we've spent the last eight or nine years being a brand that stands for ‘come see us, we're your friends, we're not idiots and we don't play by the same dumb rules as some of the other guys do'," adds Segal.For example, unlike most VC firms, JLA encourages companies to submit their business plans online. A 30-minute, "no harm, no foul" meeting where, according to Segal, "It doesn't count if they make a mistake, it's a bit of a "don't worry about it" approach," creates a less formal business environment. "We take that approach because we want to be known in Canada as the guys that you can come and talk to."We want everyone that has great ideas to come and talk to us first. And the only way you can do that is to put up the proper infrastructure to allow for that. When people submit business plans or send us emails, we respond to them all. We try to tell people quick ‘no's' and we try to give them feedback on their ideas and we try to do all of the things that many others don't." A hands-off approach to managementJLA's open-mindedness has translated into a hands-off management approach, fostering relationships built on not only good ideas and risk management, but also trust."I think we have a reputation of being very involved in the companies, but we're not seeking control of the companies. I think that's a big difference," Segal explains. "We do that because we focus on the management... But the first thing we have to be comfortable with is trusting the management to do the things that we would do. We have to know that we can trust the management to come to us when there's a problem so we can help and be collaborative."JLA's approach is well suited to the world of new media, where young entrepreneurs and creative types tend to gravitate. "We're not just a bunch of suits and we want businesses to know that," stresses Segal. "We think that the whole broad stroke of new media is a place where there are some tremendous opportunities and we are willing to take a few risks to find those opportunities."Segal pauses. "Send us some more good ideas so we can find more good things to invest in."

Economic meltdown hasn’t deterred JLA Ventures from investing in digital media

News | 11/18/2008 5:18 pm EST

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