Cybersecurity and Tech Investments: A Discussion with Jeffrey Katzenberg

Investors focus on consumer tech, aiming for long-term success in building great companies and solving cybersecurity challenges.

### Wonder Co's Investment Strategies, Risk-Taking, and Future Outlook
* 🔒  Wonder Co focuses on keeping consumers and their families safe online by investing in **innovative technologies** to address **cybersecurity challenges**.
* 🎯  By making **5 to 7 investments per year** and starting companies, Wonder Co adopts a focused and impactful approach to investing, aiming to be both **builders and investors**.
* 🔐 " The best product ultimately wins," and as long as the focus remains on the customer, **competition in the cybersecurity space is manageable**.
* 🚀  While the Quibi venture was a moon shot that did not succeed, Wonder Co pivoted out of digital media four years ago and has since focused **100% on tech investments**.
* 💰  The latest fundraise by Wonder Co has mostly **new limited partners (LPs)**, with the existing supporters transitioning to the **new funds**.
* 🏆  Wonder Co aims to build great technology companies for the long haul, with exits through **IPOs or M&A being secondary** to the core goal of **building strong companies**.
* 📺  Despite the current challenges in the digital media space, there is still hope for M&A activity, as assets like Paramount are considered **unique, generational, and valuable**.

I want to ask you, sir. I first the perspective is on what security, most importantly, cyber threats or artificial intelligence? Where is your sweet spot at the moment, Suzanne? Well, I mean, you actually covered it all. That's a sweet spot. Good. Okay, Mike, I'm trying to do is keep you and your family safe online. You know, we start with the consumer. That's obviously where Geoffrey's background and my background come from is thinking about how to apply new technologies to solve problems for each of us at home and at work. And when we think about cybersecurity. One of the crazier things of the past couple of decades is you can't think of a great innovation that is designed to protect all of us or our children or elderly relatives, and that seems shocking and terrible to us. And so we decided to go try to solve that. Truffle hunting is how you describe what

you're going to go about and do.
Jeffrey, talk us through how that is, what a smaller amount of investments,
but more integral, more important, more impactful.
Well, I think, you know, that's the opportunity there.
You know, there's so much incredible innovation going on.
And we have found for us, staying quite focused,
picking a handful of, call it, 5 to 7 investments each year, as well as
starting a company ourselves. We'd like to be builders as well as
investors. And so doing those things in parallel
has proved to be, you know, quite, quite successful and quite rewarding for us.
We all started as builders, we have founded companies ourselves,
and we wanted to do both those things in parallel.
So I'm interested in, for example, as we came out from WW DC. You're about to
anticipate Apple's latest unveiling. One of your big bets is one password.
We're looking at it now, but Apple is

looking to take that on with its own
homegrown ability for storing your passwords.
How much do you worry about competition in this cyber area?
So I used to worry a lot about competition 15 years ago from big tech
platforms and at Dropbox. In particular, Steve Jobs' last speech, he said he was,
you know, what do you use right now? Use your Dropbox.
I'm going to change it all with iCloud. And obviously Dropbox did just fine
despite that competition. My view is that the best product
ultimately wins. And in the case of one password, they've
built an amazing solution for helping you cross-platform across Apple devices,
Android devices, Microsoft devices. And so as long as you stay focused on
the customer, you'll be fine as an entrepreneur.
Jeffrey, it's a tough question to ask, but of course many would associate of
late your work with Quibi. And of course that was a big bet and a
building bet and one that didn't pay.

off.
Content is really tough right now, but how has that been tough to explain to
the LPs and who brought over? Well, first of all, it's I know it feels
feels to you like it was yesterday. In fact, it was four years ago.
It was a moon shot. That's part of being an entrepreneur.
It's also part of being an investor. You know, there are it's a balance of
the type of risk reward you take. Certainly that was a risk and our
investors understood it. But digital media in general actually
has turned out to be a very, very challenged area, both for creators and
for investors unless you owned and controlled the platform itself.
So we actually four years ago pivoted out of digital media.
We have no investments today in in digital media.
We continue to look at it because honestly, as you were talking about in
your earlier segments with the introduction of AI, there is going to be
a slew of new types of opportunities

new types of content.
I think ultimately a new and innovative platform is coming our way sooner rather
than later, and we certainly will like to want to be on the forefront of that.
But as we sit here today, that opportunity hasn't presented itself
yet. And again, more importantly,
for the last three or four years, our focus is 100% been in tech.
And as Suji outlined to you, particularly consumer tech.
So how has the LP cohort been willing to jump on to this new fundraise?
Have you got new LPs that come in to this latest fund?
Yeah. The answer is it's virtually entirely
new from an LP standpoint because Wonder Co was originally set up as a holding
company. And so these are our first traditional
LP funds. And what I would say is that several of
our strongest supporters in the holding company again became our big supporters
in the new funds. But as you know, it's been a difficult
fundraising environment and we're

thrilled with the new partners that we
have. But we also understand that we're
setting out to build these relationships with folks that didn't come in for the
long haul and and hope to get them in in the future.
So I'm going to ask you another one just on exits, therefore, because that's
obviously what the LP is and what you want to be seeing. It's interesting that
Figma was one of your big bets and that exit sort of unwound due to regulatory
issues for Adobe and Sigma. You've also done an exit, interesting
one where you've tied up two of your own sort of home-built companies together
and we're seeing the likes of or by Pango.
That was all the way back in 2020. What is the direction of travel for
exits? Is it M&A?
Is it is it IPOs? Yeah.
When you build a great company, you'd like to see it go public in.
In an ideal situation, you want these

companies to run for many decades.
While exits are always top of mind in a traditional fund, the best technology
companies get built over multiple decades.
And from our standpoint, our ambition and goals are to build great technology
companies. So we don't, we don't look to the exit,
primarily. We look to building a great company.
And if the exit comes in the near term, that's fine,
but our ambition is to build them for the long haul.
Jeffrey We, of course, did introduce is the fact that everyone knows you from
your media expertise. You're saying the moment is very hard
and the digital media space, what is it from your mind is going on with
Paramount? We were just breaking it.
The Wall Street Journal is, is articulating that Meg Bronfman is, is
eyeing a 2 to 2 and a half billion dollar bid for national amusements.
I mean, is there any hope for M&A within

the content creation space?
Will Paramount get a deal? That is a good one for investors.
Of course it will. Those assets are singular, they're
unique, they're generational. And the reason why there is so much
focus and attention around them is because of scarcity.
And so, you know, right now, today, it's a pretty complicated
set of circumstances. There you have an Shari Redstone, a
controlling shareholder. They've actually had obviously a very
difficult time over this last year or two.
But make no mistake about it, these are still very, very
strong assets and maybe they need to be reconfigured and redeployed in a,
you know, new and maybe somewhat innovative way.
But foundationally, the reason there is as much interest in them is, you know,
there's there's good reason for it. Well, you'll know having been, of
course, the Walt Disney Studios having built over what was happening with
DreamWorks and experience continuing the

content and now consumer cyberspace.
Jeffrey Katzenberg with us Coast Guard. And I will tell you, I just literally I
went to an early breakfast, ran into Bob Iger, Jeff Shell, and Brian Robbins, all
in one room at one time. The current president of Paramount, Jeff Shell,
who's on Red Bird, and Bob Iger, who's watching at all.
I feel like a movie star. Quite a morning.

WndrCo Bets Big on Cybersecurity with $460M Funding

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Bloomberg Technology

The Focus on Cybersecurity and Innovation in Technology

The company is focused on using new technologies to solve cybersecurity issues for consumers.

They make a small number of impactful investments each year while also starting their own company.

One of their significant investments is in "One Password," anticipating its success in light of Apple's latest unveiling.

Overcoming Competition and Pivoting in the Tech Industry

Competition in the cyber industry was a previous concern, but a focus on customer-oriented products has proven successful for Dropbox and One Password.

Quibi's unsuccessful bet on digital media was a challenging but educational experience for the investors, leading to a pivot away from digital media investments due to the industry's difficulties.

The company remains open to new opportunities in digital media with the advancement of AI.

Wonder Co's Shift to New LP Funds and Fundraising Challenges

Wonder Co has transitioned from a holding company to its first traditional LP funds, mainly attracting new LPs for the latest fund.

The company is pleased with the new partners but acknowledges the challenging fundraising environment.

The direction of travel for exits, whether it's M&A or IPOs, is focused on taking great companies public.

Long-Term Focus on Building Technology Companies

A traditional fund's main focus is on exits, but the best technology companies are built over decades, not for a quick exit.

The goal is to build great technology companies for the long haul, with the possibility of an exit in the future.

Paramount's assets are highly valued due to their scarcity, and despite current challenges, there is still hope for M&A within the content creation space.

The company's strong and unique assets may need to be reconfigured and redeployed in an innovative way, but there is significant interest in them for valid reasons.

Chance Encounters of Entertainment Moguls

Jeffrey Katzenberg meets with US Coast Guard and runs into Bob Iger, Jeff Shell, and Brian Robbins at an early breakfast.

The current president of Paramount, Jeff Shell, and Bob Iger were among the people present, making it feel like a star-studded morning.