Digital media drive latest Dagres fund

Todd Dagres, a high-profile venture capitalist who flew west to become a Hollywood producer, is back in Massachusetts and ready to launch a venture fund that will put its money where technology meets entertainment.

The firm, Spark Capital of Cambridge, began soliciting investors with a goal of raising $200 million earlier this year. Instead, it took in $260 million in just over three months, said Dagres. The fund is broadly targeting investments in companies working where technology, media and entertainment intersect on the Internet and elsewhere. Dagres expects the firm to move to Boston at the end of the year.

Dagres, once a general partner at Battery Ventures in Wellesley, is joined by former Charles River Ventures general partner Santo Politi, among others. Paul Conway, formerly the chief financial officer at Charles River Ventures, has joined Spark Capital in the same capacity. Dagres said about 90 percent of the money raised by the new firm comes from investors who have been limited partners in Battery Ventures or Charles River Ventures.

Dagres said the convergence of two kinds of ''IPs" -- Internet protocol and intellectual property -- would create huge financial opportunities as media and entertainment companies sought to protect their content while exploiting new ways to deliver it to consumers. ''It's creating the biggest opportunity we've seen in a long time, probably since the Internet, in terms of new companies being formed and value being created," he said.

Spark Capital won't be alone looking for venture investment opportunities in those fields. A number of venture firms have targeted similar digital media fields. Intel Capital said last year it would set aside $200 million for digital media investments.

''I think Todd will find some real winners," says venture investor Howard Anderson, a Dagres friend. ''He raised his money in about a minute and a half from people who have seen him and Santo at work."

Anderson said investors expect aggressive investments by Spark Capital. ''It won't be a fund for the faint of heart."

Dagres made a fortune and a name for himself investing in technology companies at Battery Ventures in the Internet boom of the 1990s. His biggest hit was an early investment in Akamai Technologies Inc., the Cambridge company that helps manage Internet traffic. Dagres's investments in Akamai and Qtera Corp., which was purchased by Nortel Networks Ltd., made about $1.3 billion for Battery Ventures investors.

When investment opportunities slowed to a trickle at Battery Ventures, Dagres began developing an interest in entertainment and soon left for California to try his hand at film production. A film he produced, ''Pretty Persuasion," debuted at the Sundance Film Festival earlier this year. It was released broadly later in the year and greeted by mixed views.

Though Dagres only had a direct role producing one film, he was involved in developing one production company, Prospect Pictures, and sits on the board of another, Earling Studios.

''I did the film producer thing and learned a lot," he said. ''I wanted to understand that business from the ground up, how the content and entertainment businesses worked. That will allow me to make smarter investments and I'm focused 100 percent on investing at this point. You're not going to see me sitting in one of those deck chairs on a movie set."

Spark Capital partners have considerable experience in entertainment businesses. Politi, the former Charles River Ventures partner, had been an executive in charge of new media at Blockbuster Entertainment Inc. Another Spark general partner, Dennis Miller, was an executive at Lion's Gate Entertainment and Sony Pictures Entertainment before investing money in entertainment companies for Constellation Ventures. Another of Spark Capital's general partners, Bijan Sabet, had been an executive at GameLogic and an ''entrepreneur in residence" at Charles River before joining Spark Capital.

Dagres said early investment opportunities for Spark Capital included one company specializing in targeted online ads and another business involved with online games. He said he hopes the fund will make two or three investments in the next 60 days.

Steven Syre can be reached at syre@globe.com.