On Thursday, the City of Ventura is formally launching a new incubator, the Ventura Ventures Technology Center (www.v2tc.com), targeted at high tech businesses. The incubator so far includes startups Lottay, Geodelic, and a number of other Internet and other technology firms. We spoke with Alex Schneider, who is managing the effort, about what the incubator is and what it hopes to accomplish.
Tell us about the incubator--how long has it been around?
Alex Schneider: We actually opened our doors this time last year, but didn't want to launch an empty incubator. At this time, we have ten startups, and are starting to click and do some exciting things. The event this week launches some companies, and showcases the talent we have in the space. Right now, there's Lottay and Geodelic in the incubator, Jeff Green, who founded AdECN in Carpinteria, which was bought by Microsoft, is starting his second venture, Trade Desk, which is in stealth mode at the event, there's Netplenish.com, headed by Dave Compton, who founded Aqua Scientific, has a bitoech firm in Ventura, and is launching at the event.
What is the Ventura incubator?
Alex Schneider: We designed the space to be a real creative, collaborative environment. It's a place where companies can network with each other, collaborate the business, in a brainstorming atmosphere. It's about 10,000 square feet of space in downtown Ventura, in a city owned office building. We put about $400,000 in tenant improvements and equipment, and in IT infrastructure to build out the space. We charge by-the-workstation, it's designed to be really flexible and affordable office space for these startups. It costs anywhere from $200 to $300 a month per workstation, which is full service gross, Internet, and shared equipment and conference rooms. Half of the space is flex space and coworking environment, best for one to two person companies, with the rest office suites for larger companies.
What led the City of Ventura to start an incubator?
Alex Schneider: It all started in 2003, when the city created an economic development fund worth $5M. It was a kind of rainy day fund, available for economic development purposes. The purpose was to deliver high value jobs. In 2007, we started to put some policy attached to the money, and created a jobs investment fund. We put out an RFQ to all sorts of venture capital firms in California, in order to be the fiscal steward of that money. We ended up selecting DFJ Frontier. DFJ Frontier is a key partner in this effort. In fact, they just helped us invest in Lottay, where we participated in their Series A round of investment. The $5M of funding we had got split three ways. $3M went into DFJ Frontier's fund II, which is a $55M fund. We're a limited partner in that fund, and they will make best-efforts to invest as much into Ventura and Ventura companies as possible. Of course, as with any VC, they can't just limit themselves to such a small area. But, they'll give us their best effort. So far we've been very pleased by those efforts. The City Council also wanted to make sure some money didn't leave the area, so we also have a sidecar fund, worth $2.0M. That is used to match any investment that DFJ Frontier makes in companies in Ventura. We recently matched a $180K investment in Lottay. The remaining $400,000 went into the incubator.
So is this just space, or are you doing other things?
Alex Schneider: It's more than just space, though the space is nice. It's affordable, flexible, and you can even do a three month lease--but it's more about synergy between companies. There are lots of them solving similar problems, hiring similar talent, and there's some value in having them colocated under one roof. We are able to do events like this launch party to give them more exposure, and there's also a mentoring components, and access to capital through DFJ Frontier and other venture capitalists and angels. We're really trying to develop the ecosystem, which is what it's really all about.
Ventura is not normally thought of as an area for startups, do you think this will help change that perpection?Alex Schneider: When we were doing feasibility on this at first, there was the perception that Ventura was a sleepy little beach town. If you're going to have a high tech company, there has been a knee-jerk reaction to go to Santa Barbara, or perhaps stay closer to the Los Angeles area in the Westlake Village or Agoura area. You definitely see some distinct clusters 30 miles North and 30 miles South of us. The advantages of being equidistant between those two clusters, is we're able to recruit from both labor pools. We're definitely trying to go against that notion and get some deal flow happening in the city. We're also trying to make the downtown area specifically more attractive to the creative class and high tech entrepreneurs, and this incubator is the first step. I've been assigned to the city manager's office, and that's my only charge--to get more innovative, creative companies in Ventura. We're seeing some early success stories, and Lottay and Geodelic are already a rarity, since we don't normally have too many Ventura companies who have been seeking venture capital. We've also attracted a new venture capital firm, Peate Ventures, with the BuenaVentura fund, which is headquartered in downtown Ventura, and has already invested in two firms, including Lottay's Series A, and another company, CardiacDirect.com in Ventura.
Where did you find your current crop of companies?Alex Schneider: It all started with Rahul Sonnad of Geodelic. He walked in off the street. I'd never met him before, but he's a dynamic entrepreneur, and this vision for Geodelic before the smart phone and iPhone. I asked him what it would take for him to locate in Ventura, and we started brainstorming about Ventura Ventures, what soon became the incubator behind city hall. They were our first proof-of-concept, shoed the level of talent out there, and we really worked closely with him to develop the program. Half of the companies in the incubator are there because of Geodelic, because Rahul has been presenting at lots of conferences and generating lots of good buzz for the incubator. DFJ Frontier has also brought lots of leads and is key to this whole process. We're also aligned with key partners like UCSB, where we're sponsoring their new venture competitoin, where we'll be giving a year of free office space and incubation to startup. They get $10,000 from the program, plus a year of free office space. Those are the types of relationship we're entering into, aligning ourselves with VCs, angels, and academic institutions--so we can tap into that deal flow.
Editor's note: Alex passes on that people interested in attending the launch event can go to http://venturaincubator.eventbrite.com/ (password: incubator)