NEW YORK—Like any emerging market, timing is everything for venture capitalists. Being too late is a missed opportunity, and being too early is a good way to flush funds down the drain.
And when it comes to virtual reality and augmented reality, there are so many unknowns involved that this timing remains extremely tricky for VCs that are trying to pin down these emerging, and potentially lucrative, markets, said Terence Kawaja, founder and CEO of Luma Partners, the opening keynoter Monday at VR 20/20, the first event for NewBay Media’s NYC Television & Video Week.
And a lot of smart people are trying to put some big round numbers on that opportunity, Kawaja said, pointing to a “base case” prediction that VR will be worth $80 billion ($35 billion for software and $45 billion in hardware) by 2025. However, others see that opportunity to be as low as $23 billion to as high as $182 billion in that general timeframe.
“Timing this is really important for venture capitalists,” Kawaja said. In terms of financial returns, “being early has the same financial profile as being wrong…It’s like flushing your money.”