The biggest comedy sites all lust after the same young-male demographic that is notoriously difficult to reach through traditional media. But the content is often wildly dissimilar, ranging from the broad Hee Haw burlesque of Break.com (paint-gun accidents, nosy neighbors falling off fences) to the Onion’s sharp, mordant send-ups. Its Onion News Network is the Miles Davis of anti-mainstream media cool; among ONN’s deadpan features: “Is the Government Spying on Paranoid Schizophrenics Enough?” and “Al Qaeda Also Fed Up With Ground Zero Construction Delays.”

 
Funny or Die tends to be far more uninhibited than Break.com and far less sophisticated than the Onion. The site has a full-time staff of 30, six of whom are writers. This so-called creative team has an office in Hollywood; the techies are in Palo Alto, California. Together, they have cranked out more than 100 videos.

Some of their best bits have been the “Zombie-American” monologues, in which The Office regular Ed Helms mulls over life as a modern-day undead. “You get a lot of creative freedom,” Helms says. “Having no studio oversight or censorship makes the thing feel more renegade, more run-and-gun, which can be exhilarating.”

To date, the time Helms and his fellow videomakers have put into their projects has been sweat equity; at Funny or Die, neither A- nor D-listers are compensated—yet. “Revenue sharing is a little down the road,” says Sequoia’s Kvamme. “In the future, we hope to give some filmmakers small budgets to cover production costs.” Ferrell and McKay had just a $5,000 budget for their first video, but Kvamme expects the pay structure to change dramatically when the ad dollars start coming in. “Talent can make much more money with us than they currently do,” he says. “Part owners of a hugely successful company will make more than just paid talent.” Kvamme is still working on how to pay those who don’t have a stake in the company; his answer will probably be a formula based on how much traffic a video pulls in. The pay will also vary depending on who the creator is. Sacha Baron Cohen can expect a bigger cut than the Fort Linda, Montana, Improv Players.

Sequoia invested in some of the Web’s biggest winners early on, including YouTube, Yahoo, and Google. “When Sequoia bankrolls something, you know it’s worth taking a look at,” says Scott Kurnit, founding C.E.O. of About.com. Funny or Die just received an infusion of $15 million, partly from Sequoia and the rest from a couple of institutional backers Kvamme declines to name. That money, Kvamme says, will be used to hire more creative and engineering talent. Sequoia thinks the site—and others like it—is where the audience is heading. “The internet gives viewers more control,” says Kvamme. “They get to see more of what they want and vote with their time, which will have to translate into advertising dollars.” He compares what Sequoia is attempting with Funny or Die to “an entrepreneur who comes up with an idea like MySpace or Facebook. The reason the founders of those companies are very rich today is that they risked their time and their idea. Talent will need to do the same thing in this situation.”

A Silicon Valley native, Kvamme was born into one venture capital family and married into another: His father, Floyd, and father-in-law, Pierre Lamond, were both founders of National Semiconductor. In 1980, Kvamme got his first job, at Apple, while a freshman at the University of California at Berkeley. He quit both in 1981 to study at the University of Oslo, in Norway, where he programmed financial-planning models at the local subsidiary of I.B.M. Next stop was the University of Paris. At 21, he helped set up the Apple subsidiary in France.