FORTUNE -- "Why would you get the guy who created the Zune to make your website?"
That was one of several questions posted by comedic actor Zach Galifianakis to President Obama, who made a surprise appearance on Funny Or Die's Between Two Ferns program to plug the Affordable Care Act. Not only did the video immediately go viral, but it also has become the day's top referrer to Healthcare.gov. Or, put another way, whoever in the White House press office approved this "interview" is breathing a giant sigh of relief.
The video's popularity also is a big shot in the arm for Funny Or Die, which was launched in 2008 by venture capital firm Sequoia Capital and a Hollywood production company whose principals include Will Ferrell and Adam McKay. The lead investor for Sequoia was partner Mark Kvamme, who has since left Sequoia but remains chairman of the Funny Or Die board. I spent a few minutes on the phone with Kvamme earlier today, talking about Funny Or Die. An edited transcript is below:
FORTUNE: It's been nearly seven years since Sequoia first invested in Funny Or Die. How does it eventually exit?
MARK KVAMME: A lot of Silicon Valley guys don't understand the value of content. Take Between Two Ferns. We've probably shot between 16 and 18 episodes, and people keep watching episodes we filmed a couple of years ago. In fact, around 50% of our traffic is for content we own and invested in a long, long time ago. It's kind of like a studio model with a back catalog, where the content value continues to increase.
It's going to turn out to be a very good investment for Sequoia... Not a WhatsApp sort of multi-billion dollar exit, but a nice multi-hundred million dollar exit sometime.
Most likely to an established entertainment company?
It's pretty rare for VC firms to back professionally-produced content companies, and when they do it's almost always some form of journalism. Why has this one worked?
FunnyOrDie was started with this question about what would happen if Hollywood and Silicon Valley worked together from the very beginning. So all of the content is created in Hollywood, but around half of the company's employees are actually in Silicon Valley. And these guys use social media in a way that only a tech company uses social media -- not in the way a traditional entertainment company uses social media.
Any concerns that the Obama appearance makes Funny Or Die look partisan?
No. When he goes on The Tonight Show, does that make NBC look partisan? He had something to market. Kind of like when Charlize Theron did Between Two Ferns, because she had a movie coming out. If someone like John Boehner wants to do a piece, he'd be welcomed. And one thing that's important is that people know they'll be presented well. This isn't College Humor.
Funny Or Die hasn't raised venture funding since 2008. Does that mean is cash-flow positive?
Yes, it is very profitable. From an investment perspective, you're right that it has raised VC since 2008. But two years ago it did sell sell a minority stake to Turner Broadcasting.
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Why two top venture capitalists left Silicon Valley for flyover country.Dan Primack - Aug 9, 2013 5:00 AM ET
Mark Kvamme left a lucrative gig funding startups for a post as Ohio's jobs czar. His simple goal: to help a million people.
By Tory Newmyer, writer
FORTUNE -- Mark Kvamme has this crowd rapt, and he isn't even speaking. We're in a cavernous Italian restaurant called Mr. Anthony's on the outskirts of Youngstown, Ohio, and the lunchtime audience is filled with members of the local chamber of commerce. He has MOREJun 3, 2012 11:30 AM ET
Mark Kvamme is stepping down as a general partner with Sequoia Capital, arguably the nation's top venture capital firm, in order to take on a public service role in Ohio.
Kvamme will become interim director of the Ohio Department of Development, where he'll be charged with transforming the scattered agency into a private jobs development organization. His salary will be just $1.
The Columbus Dispatch reports that Kvamme is a longtime friend MOREDan Primack - Jan 7, 2011 10:16 AM ET
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