So the writer’s block consensus was to write about LA startup incubators and mentorship organizations (2x as many votes as the other proposed topics). In the spirit of a college football season, I’ll break down the LA startup incubator scene by drawing comparison to the top conferences in NCAA Division I Football (*Please note that I left the Big East off of this list because the conference is in such turmoil these days I didn’t want to get any heat by making a comparison there).
LAunchpaLA (the SEC)
Having won the past 5 National Championships, the SEC attracts the top recruiting talent and is the most dominant division in college football today. So if one of these incubators is the SEC, my vote goes to LaunchpadLA. Run by a Mark Suster, the world’s #3 VC Power Blogger ($10 says he’ll be #1 when the new rankings come out in January), LaunchpadLA has not exactly been structured as an accelerator (at least not in the past), but more of a mentorship organization. Launchpad has previously not made direct cash investments in companies, but that’s all changing…Earlier this week Launchpad announced that each member of class 3 will receive a $50,000 investment from a pool of capital contributed by folks like Rincon Ventures, IdeaLab, and AudioMicro corporate counsel, Stubbs Alderton, among others. In addition to seed capital, LaunchpadLA will also be offering free office space to it’s members in addition to dedicated in office time with it’s mentors. Launchpad’s mentorship program was previously structured whereby the entrepreneurs are assigned 2 mentors – one of which is a more senior, previously successful entrepreneur, and the other a local VC. As an alumni of LAunchpadLA, class 1, clearly the rankings here are a bit biased. That being said, I can honestly attest that our participation in LaunchpadLA class 1 has opened more doors and made more real life, valuable connections, than any other affiliation, conference, or networking event in our company’s 4 year history.
Mucker Lab (the Big 12)
A newcomer with a good PR and a seemingly solid team, Mucker lab comes in at #2 on this list due to their long and impressive mentor roster as well as their official TechStars affiliation. Now it may seem that anyone can start a TechStars affiliate (TechStars has an open source affiliate model), but I imagine that to actually be given the blessing of Brad Feld Co., Mucker had to prove its the real deal, as a location like LA has been ripe for an official TechStars accelerator for so long.
IdeaLab (the Big 10)
There’s not much I can say about IdeaLab because truth be told I don’t have any personal experience with the folks there. Headed by GoTo (which became Overture, Yahoo’s equivalent of Google AdWords) founder and serial entrepreneur Bill Gross, IdeaLab’s an incubator that’s been around for a while now. Bill’s the kind of guy that speaks at the TED Conference and if you’ve ever seen an interview with him, he’s clearly on a higher level of intelligence than most folks (me included) could ever hope to be. That alone should be enough to make you want to check out IdeaLab. It’s also important to note that IdeaLab is one of the investors in LAunchpadLA’s new class 3 fund so the two conferences are closely related.
Originate Labs (the Pac 12)
Originate’s an incubator that brings something a little different to the table: They invest technology resources (in addition to cash). In short, what this means is that they trade software development services for equity. In a world where most of your early capital goes into product, I feel that Originates model is a welcomed addition to startup investment scene. After all, if youre willing to give XX% of your company to a CTO or other co-founder, why not give up less, get your product to market, and get some momentum going without having to be married to a technical co-founder from the get go, especially when solid technical resources are seemingly hard to come by in Los Angeles (at least that’s what some folks say)? In addition to the technology resources they invest, Originate recently announced an affiliation with the Tech Coast Angels, whereby TCA will work with Originate to invest cash in promising Originate projects. Sort of the best of both worlds.
Amplify (the ACC)
Now I am not entirely sure what the deal is with Amplify as its a newcomer to the LA accelerator scene. What I do know is that its headed by Paul Bricault of Greycroft Partners and though I don’t know Paul well, he sure seems friendly and based on his This week in VC episode he’s highly experienced in the Hollywood / New Media scene. I’d write more if I knew more, but for now there is just a parking page up on the Amplify website and some light chatter among LA entrepreneurs. I’m not sure if / how much cash they have got to put to work, the structure of the program, or any other details. I’m now hearing that highly successful entrepreneur, LA angel, and Betterworks CEO Paige Craig may be involved, and that alone should be enough to make you want to be a part of Amplify. Pay close attention to this one and expect more details to be revealed in the near future.
Founder Institute (Mountain West)
Now just remember, before you rip on the Mountain West, keep in mind that Boise State plays there (at least for now as rumor has it that they may be defecting to the Pac 12). Now I don’t know of any huge exits out of the Founder Institute (holler at me in the comments if I’ve missed one) but that doesn’t mean theres not a few in the making. That being said, if you’re startup is funded already, the Founder Institute mentorship program could be a mess to deal with. The reason being is that they ask for equity in exchange for participation in the program, which makes sense within any incubator / accelerator if they are putting in cash but FI doesn’t make cash investments to my knowledge. They also give you some funky matrices style IQ-like test before accepting you, which is cool and will make you feel smart when you pass. The downside of them asking for equity in exchange for participation is that if you’re already funded, you’re existing investors are going to question why they had to give up cold hard cash in exchange for shares while you gave up share just to participate in a mentorship org and papering the transaction could be a mess of unnecessary legal fees. The good news is the way in which the Founders Institute handles the equity contributed by each company – the shares actually go into a pool with all of the other companies in your class and you each get ownership on one another’s startups. A pretty cool approach which certainly helps to hedge the risk.
UpStart LA (Conference USA)
My friends Ben Padnos and Eric Jackson are UpStart mentors. That’s all I really know other than what’s on posted on the UpStart LA website, which sports a seemingly promising mentor list, though the roster does includes a few service providers (i.e. attorneys, recruiters, etc.), just something to note. No knock to service providers here, the right ones can certainly make great mentors. Since we’re comparing football conferences here, UpStart would have to be Conference USA, which definitely has some solid teams, including the Cougars of the The University of Houston, who are undefeated thus far in 2011 and ranked #11 in the nation.
Now I’m trying to come up with a creative way to close the post, but having just read the TechCrunch / BothSidesOfTheTable annoucement on the LAunchpadLA fund, I think it’s best to close by quoting Mark’s article (which itself includes a quote from Bill Gross)…
“There are at least 6 incubators now being set up in LA. Can the community support them? I use the words of one of the wisest men in this space who started much of this revolution, Bill Gross of Idealab who said:
”I think that the more initiatives, the better … I think it’s the many initiatives and variety that make Silicon Valley, Silicon Valley and that we need to do more of that here.”
So we’ll be supportive every initiative in town and doing all that we can in LA to encourage more tech entrepreneurship across any startup incubation or acceleration programs. And we agree with that. If our community supports more potential entrepreneurs to try, if it funds more people with dreams, if it surrounds talented people with mentors, if it coaches them through their first deals and their team formation … that’s got to be a great win for society overall and for LA in specific.”
Ryan Born is the founder and CEO of AudioMicro, Inc., which operates a network of digital content licensing marketplaces including celebrity pictures, tattoos, royalty free music, and sound effects. Born was VP Finance / Controller for WireImage, has served at PricewaterhouseCoopers, and is also a photographer who's images have appeared in major print publications including Rolling Stone to People Magazine. Born blogs about entrepreneurship and startups at RyanBorn.net. This was originally published on Ryan's blog, and was used with permission.