Spark Capital has had a busy few years. It launched in 2005 after raising $260 million, raised another $360 million in July 2007 for a second fund, and announced a funding initiative five weeks ago to focus on smaller bets in the $250,000 range. Spark has invested in a range of digital media companies, from thePlatform, which was sold to Comcast (NSDQ: CMCSA) for $100 million, to buzzy startups including Twitter, Veoh, Boxee and Tumblr. The firm has invested heavily in online video, which has come under pressure the last year because of the tough ad environment and has steep operating costs. Last week, I sat down with Mo Koyfman, principal at Spark, who came to the Boston-based VC fund from IAC (NSDQ: IACI) where he held a variety of strategic, transactional and operational roles. We talked about VC culture, Twitter (in which Spark is an investor), and the Asian gaming industry, among other topics.
Excerpts from our conversation are after the jump.
A Sanford Bernstein analyst published a report recently in which he called out Silicon Valley for having a culture where large Internet companies are often wooed by VCs into buying buzzy startups that have no real business model. What is your response to that?
There are certainly deals you can point to where businesses were bought that performed poorly, yet there are many other examples where they have performed tremendously well for the acquirer. It