When making trips to visit venture capital firms in Silicon Valley, Hollywood dealmakers are typically told that those companies are only interested in investing in technology startups. But Michael Yanover, head of business development at Creative Artists Agency, took the opportunity to ask a panel of VC chiefs at Variety’s Venture Capital & New Media Summit on Friday what many a dealmaker has been wanting to ask: “You say you’re only interested in technology, but we see ‘FarmVille and ‘Angry Birds’ as hits. Are you a little more like us than you think and investing in hits?”

The consensus at the Beverly Hilton was yes and no.

Martin Kay, a partner and VP of strategy and transformation at IBM Global Business Services, reminded the audience at the BevHilton that “folks that invest in VCs are pension funds” that don’t react well to risk.

And “risk keeps us away from content companies,” said Patrick Chung, a partner at New Enterprise Associates (NEA), which helped incubate TiVo.

That’s not to say that technology companies aren’t without risk: “If you’re good, you will invest in 10 things and seven go under,” Chung said.

And the lines are blurring when it comes to who is creating entertainment these days.

Chung pointed out that while technology firms used to create new platforms that Hollywood would then program with entertainment, times have changed. Just look at YouTube.

“Now you’re seeing content created not by companies but by individuals,” he said. “Has Hollywood created most of the (2.6 billion hours of) content on YouTube? No. That’s a big threat for Southern California and Hollywood.”

“Is Oprah a hit or a platform?” asked Richard Wong, partner at Accel Partners, which invested in Legendary Entertainment, Facebook, Groupon and “Angry Birds”-creator Rovio. “We will invest in content companies, but we have to believe that it will become a channel” that can cross platforms to generate revenue from a number of sources. We’re not anti-celebrity, but want to make sure there’s a business model behind it.”

“We invest in people,” Chung said, and praised Hollywood’s ability to identify talent. “If we had a knack to do that we would invest more in content,” like companies such as BeachMint, a new e-commerce venture that has celebs like Kate Bosworth endorse a new piece of jewelry each month that gets sent to members.

Added Wong: “A lot is based on the individual entrepreneur. (When investing in startups) we look for tough problems that need to be solved and the individuals with a strong understanding of the problem, but not ones who say they have all the answers, because by the time the product gets built the market has changed. We don’t invest in posers and people who use the top five buzz words they read in TechCrunch.”

VCs also aren’t high on established entertainment brands.

“Hulu is only there by virtue of its current ownership,” Kay said. He also called Netflix’s streaming business “unsupportable unless the content companies roll over” and provide them with the films and TV shows they’re looking for. “Content is still king and has leverage because you still have to give people something to watch and listen to,” no matter what the platform is.

But Hollywood needs to find better ways to innovate. Its past form of innovation was to acquire companies, with Disney buying Marvel, News Corp. buying (and then losing with) MySpace, and Viacom taking over new media ventures like AtomFilms and Neopets.

“Growth only comes from innovation and challenging the status quo,” said Gary Shapiro, prexy and CEO of the Consumer Electronics Assn., which produces the Consumer Electronics Show in Las Vegas each year.

And lack of innovation is what ultimately hurt Blockbuster and caused its fall from grace.

“Companies like Netflix approached Blockbuster to license the brand and it kept pushing them away,” Kay said. “Innovation of their business model was something they couldn’t cope with. Instead they wanted to buy Hollywood Video. Now Blockbuster (which was once a $6 billion company) “was sold for $300 million and Netflix is valued at $14 billion.”