It's not just Facebook and Google chasing virtual reality

An attendee wears an Oculus Rift HD virtual reality head-mounted display as he plays "EVE: Valkyrie," a multiplayer virtual reality dogfighting shooter game.
Robyn Beck | AFP | Getty Images

There's nothing simulated about the excitement surrounding virtual reality.

Tech giants are moving hard and fast into this technology, which allows users to experience totally immersive, 360-degree, computer-simulated environments.

Facebook, for example, spent $2 billion last march to buy Oculus VR, and Google says it's already shipped 500,000 units of its competing Cardboard product.

But it's not just the titans. A number of start-ups also are now specializing in virtual reality, and some venture capitalists are supporting them.

Read MoreFacebook forms virtual reality movie studio

Mike Rothenberg of Rothenberg Ventures, is providing $100,000 in seed funding to 10 start-ups in exchange for equity in the companies.

Rothenberg sees a number of applications for VR in markets ranging from health care to education.

Peering into the future of virtual reality
Peering into the future of virtual reality

"Imagine that you would like to attend, virtually, a wonderful college class, but you're in a different country," he says. "This can make you feel like you're there."

This morning, Rothenberg released the names of the 10 start-ups he's funding. One of the companies called Emblematic Group builds content for the Oculus Rift among other customized goggle and tracking systems.

Emblematic Group created, for instance, a virtual reality tour of Syria. Nonny de la Peña, the company's founder, says the purpose of the project is to bring attention to the civil war in that country.

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"I want to give people a visceral understanding of what is happening there," she told CNBC.

But, while Rothenberg is excited about virtual reality, many of his peers are not.

In 2014, only 11 companies focused on virtual reality received venture funding totaling just $54 million, according to the MoneyTree report.

To put that number in context, venture capitalists invested nearly $49 billion in total last year.

Why is the enthusiasm relatively muted?

Even though many start-ups boast innovative technology, many don't have a significant number of users or viable business plans, say some venture capitalists.

Read MoreGoogle's new weapon against Facebook: Cardboard

"Venture capital is about showing me the money," says Venky Ganesan, managing director of Menlo Ventures. "Unfortunately, virtual reality right now is just showing losses. Until virtual reality start-ups make money and have business models, they will not get a lot of support from venture capitalists."

Still, fans of virtual reality are confident that mass adoption of this technology is coming and that, ultimately, VR will upend and redefine many industries, from gaming to travel.

"Virtual reality is nascent now but, in 20 years, it will be ubiquitous," says Rothenberg.