From Entrepreneur to Venture Capitalist

With new funds and a new partner, DCM is set to boost its global investments.

Image: courtesy of Sling Media

So what do you do after you’ve been as successful as your wildest dreams and taken a company from a small startup to an international enterprise that sells for about $380 million? For some, that means it’s time to start another company.

For Jason Krikorian, co-founder of Sling Media, it meant it was time to help other entrepreneurs start and grow their own companies. Krikorian earlier this week joined one of Sling Media’s venture capital backers, DCM, as a managing partner.

Sling Media sold to EchoStar in 2007 and Krikorian took a hiatus beginning in 2009. That gave him 18 months to spend with his family and think about what he wanted to do next.

“I’ve thought about what really fired me up about work,” Krikorian said in an interview with Portfolio.com. “I absolutely love the entrepreneurial process. I treasure that.”

Krikorian said he thought about those early days for a company, when it was all about getting ideas off the ground and into the market. The energy, the smart, ambitious people involved, and the innovative ideas all attracted him to make the leap from entrepreneur to venture capitalist.

“For me VC kind of represents the best of what I’ve been involved in,” he said. And he said that despite the down cycle venture capital has been in recently, it’s still the best opportunity to both mentor and learn from entrepreneurs, and, of course, grow small companies into money makers.

And as an entrepreneur, he even likes the challenge inherent in a down cycle. After all, most entrepreneurial companies don’t make it.

“You can’t just show up. You have to come with a superior strategy,” he said. “I do believe there are excellent results to be had even in this environment.”

Krikorian’s move was announced the same week DCM announced it had raised a new $400 million fund, its sixth, despite the tough fund raising environment for venture capital, and that it had also raised a $21 million fund designated in Chinese currency, a particularly difficult feat.

DCM co-founder David Chao said in an interview, “It’s relatively painful to set up these funds in China.”

It can take six to twelve months to start such a fund designated in Chinese currency. A firm has to have sponsorship from a local government, and needs to have the right local partner. So even though the Chinese fund is small by U.S. venture capital standards—especially for a firm like DCM with more than $1.6 billion under management—it’s also a coup just to have such a fund.

“The dollar value is less meaningful to us,” Chao said. “What’s most important is to set it up.”

Also, he added, most of the sophisticated entrepreneurs in the DCM’s sweet spot—the tech, telecom and media space in China—are like their counterparts in the West, aiming to be able to go public on the Nasdaq. That means they can be funded from one of the firm’s dollar-designated funds.

And DCM has just raised a $400 million fund, its sixth, despite the tough climate for fund raising. Limited Partners (LPs)—the pension funds, endowment funds, and wealthy individuals who back venture capitalists and stand to make big money when a venture-backed company is sold or goes public—have been slow to invest since the Wall Street crash of 2008.

But Chao said that $400 million fund is in line with previous funds DCM has raised, and is a tribute to the company’s emphasis on both finding entrepreneurs from around the world in which to invest, and to helping U.S.-based entrepreneurs expand into global markets.

“I think the effort took a little more than probably fund five,” Chao said. “But on the flip side we got to spend some quality time with some of our LPs who truly understand the world is becoming more global.”

It was the kind of international muscle in the U.S., China and Japan that allowed for raising the China fund that attracted Krikorian to DCM. Back when he was running Sling Media--inventor of the Sling Box, which allows users to watch TV on devices from computers to smart phones—DCM was an investor, and the venture firm’s contacts abroad were key to helping Sling Media expand to Japan.

“I was very attracted to their global strategy which is a very real thing,” Krikorian said. “I’m really happy to have that engine go to work for my portfolio companies.”