Friday, February 1, 2013
LA's Innovators Get Spotlight, But Investors Cautious
Story by Benjamin F. Kuo
The Los Angeles innovation economy is alive, well, and looks to be getting widespread recognition--finally--beyond just local high tech investors and executives, based on the turnout at an event Wednesday held by CSQ, which publishes a quarterly magazine focused on different industries (philanthropy, sports, entertainment, technology) focused on Los Angeles and Ventura County. The magazine turned its attention this month towards the Los Angeles innovation and technology economy in a section guest edited by StartEngine co-founder Howard Marks, including a reception held Wednesday evening at the Viceroy in Santa Monica. (Big disclaimer: the author and editor was one of the honorees at the event).
Attendees mingle around the pool, and sponsors such as HP, Burgess, Cohiba, NetJet
All schmoozing and networking aside, what are investors, entrepreneurs, and others in the industry thinking about? From the conversation gathered around the pool from the movers and shakers of the industry, it seems that--despite the buzz, energy, and activity in the region around startups, there's still some wariness by investors that the industry not over-hype and over-promote what's happening in the area. More than one attendee expressed worries about seed level startups having issues getting more funding; seeing too many "me-too" startups; and the importance of proving out viable business models. For some, it seemed like they--like the investing public--are burnt out on too many bubbles over the past decade, and are determined not to create or participate in another one. Local angel and venture investors seemed determined to avoid a repeat of the past, by being more selective on their investments, and not following the crowd. Participants hailed the work that the many accelerators in town have done to spur startups and innovation here: Amplify, LaunchpadLA, MuckerLab, io/LA, StartEngine, et al.--but also speculated on if there's enough capital to fund follow on investments for graduates of those accelerators.
That said, it was clear from the crowd that they now believe there is now a stable of experienced, veteran serial entrepreneurs, able to thrive in any kind of economy or funding environment: CSQ's list included Sky Dayton (Earthlink, Boingo), Elon Musk (Tesla, SpaceX, SolarCity), Bill Gross (Idealab), Richard Rosenblatt (Demand Media), and many others with great promise such as Jason Nazar (DocStoc), Chris Ovitz (Viddy), Ophir Tanz (GumGum), etc.--and who, as Sky Dayton aptly states--know that the one trait that all entrepreneurs must have: perseverance.