Saturday, November 11, 2006

El Dorado Makes VC Investment

Venture capitalists are looking to make investments in companies developing technology related to digital content and Internet Protocol TV (IPTV). Some seek companies with technology that can quickly and easily transcode digital content from one format to another.

El Dorado Ventures plans to make an official announcement this week related to transcode technology. Last summer, the VC made an investment in a company that developed an appliance to transcode video within the hardware, according to an executive at the firm.

The unnamed technology company built a hardware box that ingests video and converts the bit rate, resolution and format to the required specifications before spitting out the content for use in an iPod or cellular phone. If the digital content is uploaded as an AVI file, but needs to be viewed on a device as an MPG4 file, the technology does the conversion in the hardware, for example.

Although it's not clear where the unnamed technology company resides, data released last week from Dow Jones VentureOne and Ernst & Young suggests San Francisco, Calif., remains the dominant market for venture capital investments during the third quarter in 2006.

The San Francisco Bay area closed 207 VC deals totaling $2.45 billion during the period, a decline in the number of deals from a year ago, but an 8 percent increase in capital. Southern California posted a more significant increase in capital, 16 perecent, to $710.6 million.


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