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Why LA Is the New, Hot Place to Launch

A boom in new incubators is helping to fuel a boom in new tech start-ups.

Flickr/photographerglen

Hollywood has a serious case of start-up fever.

First Ashton Kutcher and Lady Gaga emerged as tech investors. Then other celebrities got into the business of moonlighting as angels. Now Los Angeles is spawning all kinds of incubators and start-up accelerators.

The city now has IdeaLab, Launchpad.la, MuckerLab, StartEngine, UpStart.LA, Science, and Amplify, which just launched this week.

I talked with one of the managing directors at Amplify to get a read on what’s going on out there.

Cofounder Paul Bricault says the blossoming tech start-up environment in LA reflects what’s happening in the broader digital media ecosystem. “There are capital efficiencies in the market that have brought down the cost of creating a start-up,” he says. “What would have taken $5 million to get off the ground with a product developed and customers and traction several years ago now can take a few hundred thousand dollars.”

He says there also is more angel money in the market and larger venture capital firms that historically didn’t do early-stage funding are investing much sooner than ever before. As a result, more entrepreneurs are starting up in LA, feeding the incubator boom.

Celebrity involvement in tech start-ups has changed too, Bricault says. While stars previously stuck to endorsing companies for a paycheck, recently more of them have started investing in them. Today, with so many of their identities tied into digital media, more Hollywood insiders are taking a hybrid approach, both investing in and endorsing tech start-ups.

Kim Kardashian is one such example. In 2009 she helped launch Shoedazzle, an online shoe subscription service, and now the company is number 21 on Forbes list of America’s Most Promising Companies.

For tech entrepreneurs who like the idea of trying to harness Hollywood’s influence, LA is the spot–especially now that there’s a growing community of incubators and founders offering mentoring, seed money, and the chance to make key connections.

Amplify, for example, is renovating a 10,000-square-foot historic building in Venice—a veritable hot spot, considering Google just moved 500 employees there as well. It’s no wonder. Companies who set up shop there are getting a three-year hiatus on paying taxes to the city.

For what it’s worth, Amplify is now taking applications. Selected start-ups will get four months of office space, training, mentoring and support, as well as up to $50,000 in seed capital.

Christina DesMarais is an Inc.com contributor who writes about the tech start-up community, covering innovative ideas, news, and trends. Follow her tweets @salubriousdish or add her to one of your circles on Google+. Have a tip? Email her at christinadesmarais (at) live (dot) com. @salubriousdish