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LA Tech: Our Time to Shine

Adam Miller

President & CEO, Cornerstone

It’s been a full year since we hosted the inaugural LA Tech Summit. In that time, a lot has changed in the technology ecosystem of LA and Southern California: big growth, new players, marquee exits, new investment dollars, stronger connections and a higher profile for the community as a whole.

We talked a lot at the summit in 2013 about the opportunities for LA Tech – about the need for local capital, local expertise and a local identity. I think we’ve come a long way on all of these fronts in just 12 months.

Finding Scale

Southern California is now the third largest tech ecosystem in the U.S. behind Silicon Valley and New York. Red Herring recently noted that the region now holds a 12 percent share of early-stage startups nationwide and is the fastest growing market, with the number of new startups growing at 5.3 percent.

Is there money here? Sure there is. $4.71 billion has been injected into LA's tech scene across 1,081 tech deals in the last five years. There was $700 million of capital in 2012, over $1.5 billion in 2013, and this year we’ve seen over $8 billion in exits.

Over the last few years, Los Angeles has produced marquee start-up success stories like virtual reality company Oculus VR (acquired by Facebook for $2 billion) and social app darlings Whisper and Snapchat. 2014 has also seen successful IPOs from two LA startups — ad-tech firm Rubicon Project and car buying and selling platform TrueCar.

Local Investment Ramping Up

Of the Top 11 most active investors in the LA area, seven of them are locally based, CB Insights Data shows. That list includes Upfront Ventures, Greycroft Partners, Siemer Ventures, Rincon Venture Partners, Double M Partners and Baroda Ventures.

Despite LA’s notorious sprawl, central areas have started to form in the city’s tech ecosystem aided by a growing number of incubators and accelerators based primarily on the city's Westside. Santa Monica, for instance, plays host to well-known and active incubators like Launchpad and MuckerLab, as well as vibrant co-working spaces like Coloft and Working Village. Neighboring Venice is another hotspot, home to the Amplify.LA accelerator and NextSpace co-working offices.

Diversifying Business Models

LA’s tech ecosystem itself is, more and more, starting to match the city’s wider economic diversity with a wider variety of business models. The tech sector here has traditionally been known as a consumer-focused industry, with some of the city’s biggest success stories — like Beats (acquired by Apple for $3 billion) and the much-buzzed-about Dollar Shave Club — serving broad consumer markets.

But that is starting to change, with a new wave of B2B start-ups. Promising young companies like MindBody, a fitness studio management software with over $100 million in investment, and DocStoc, an online document repository acquired by Intuit, are attracting major attention and show a growing sophistication among local entrepreneurs to go after more niche markets.

LA Diversity. LA Cool.

Another upside to LA’s sprawl, of course, is its diversity — the city is one of the most culturally and economically diverse places in the country. This patchwork gives tech entrepreneurs a range of advantages when building a company, like the ability to test products in a mass-market environment before a wider launch. Moreover, LA’s diverse economic base means that the city’s tech entrepreneurs can soak up the influence and expertise of powerhouse local industries, especially media and manufacturing. It’s no coincidence that successful video content companies like Maker Studios (bought for nearly $1 billion by Disney earlier this year) and promising startups like Tastemade (with 17 million visitors a month) were born in the cradle of pop culture. In the recently revitalized downtown district, budding e-commerce empires like Nasty Gal and BeachMint have found a natural synergy alongside LA’s thriving apparel manufacturing industry, the country’s largest by employment.

Of course, LA is also a great place to live. It’s one of the reasons I chose to start my company in beachy Santa Monica way back when in 1999. Looking past the surfing, the avocados and the 329 days of annual sunshine, the cost of living in LA also beats tech hubs like San Francisco and New York. And education powerhouses like UCLA, USC and CalTech churn out a steady supply of the best engineering talent an enterprising tech entrepreneur could ask for.

The Second Annual LA Tech Summit

These are the drivers in place as we prepare to host the second LA Tech Summit on December 11 in downtown Los Angeles.

Because the LA tech community is as diverse as LA itself, we are happy to welcome speakers from across the ecosystem, including leaders in e-commerce, ad tech, digital media, enterprise software, entertainment and more. In addition, expect to hear from the region’s incubators, accelerators and venture capitalists about what’s new, what’s next and what it takes to thrive as a SoCal startup.

A certain highlight of last year’s event was our conversation with LA Mayor Eric Garcetti. This year, the mayor will sit down with journalist Jon Erlichman to share insight into his plans for making the city an epicenter and model of tech innovation and entrepreneurship in the U.S. and globally.

That’s just the tip of the iceberg in terms of the agenda for the day. Attend LA Tech Summit to hear from the entreprenuers, the investors, the executives and the analysts – people like Peter Marx, the City of Los Angeles’ CTO, Upfront Ventures’ Mark Suster, Scott Painter, the founder and CEO of TrueCar, and Qatalyst Partners’ Frank Quattrone, to name just a few.

And you won’t want to miss another Shark Tank Competition among local start-ups. There’s nothing like a live demo in front of a big crowd. Last year’s brave winner, Nativo, will be back to share updates on their progress over the last year.

We hope to see you in DTLA on December 11.

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