Need Start-up Help? Try L.A.
Los Angeles is one of the biggest cities in the world but it's often underestimated and overlooked as a good place for start-ups; it neighbor to the north, Silicon Valley, gets all the attention. But L.A. has all the underlying elements needed for a thriving start-up culture: entrepreneurial people, willing investors, and a growing network of start-up veterans willing to mentor first-timers.
In the last couple of years, the city has produced a number of incubators and accelerators that have brought those three crucial ingredients together. To learn about a few of them, recently I spoke with three L.A. investors: Jeff Solomon (executive director at Amplify), Allen Morgan (director and managing director of New Ventures Group at Idealab), and Howard Marks (co-chair at StartEngine).
It's important to note that there is no perfect accelerator or incubator that works for every start-up. All three investors agreed that founders need to find the best model for their company and goals. Here's a look at three options:
Best for: companies with well-developed ideas that need help scaling
Like with every other start-up accelerator, Amplify looks for entrepreneurs who are very talented, driven to succeed, and have a strong work ethic. But unlike a lot of other programs, Solomon says Amplify wants entrepreneurs who have a product with some traction and funding already, but are in need of connections and some mentoring to scale the business. The Amplify team also leans toward working with start-ups that fall into certain industries where they have stronger ties, such as e-commerce, gaming, or entertainment sectors.
Once accepted, founders can expect to hear a lot about building a strong company culture. "I try to create an environment where they want to be, with lots of amenities and activities," Solomon says. "I want [founders] to see how valuable that is in their own businesses so they appreciate the importance of applying money and resources to culture building."
Best for: entrepreneurs without a business idea
Idealab was founded in 1996 by veteran Internet entrepreneur Bill Gross. It's primarily an incubator, although around 10% of IdeaLab ventures operate on the accelerator model. That means the majority of the business ideas come from Gross's brainstorms.
Idealab selectively chooses founders or teams of entrepreneurs to work collaboratively with Gross to come up with a minimum viable product and test it to see if it has any promise. If it does, they will take the idea to the venture community to get funding and continue to grow the start-up.
Idealab, along with Amplify, has no fixed program duration. In fact, Morgan says he's had companies stay on campus for as long as six years. Idealab recognizes that some companies take longer to get off the ground than others.
Best for: pairs of tech co-founders who want a quick program
StartEngine, the youngest accelerator in this group, accepts about 15 startups each quarter and focuses on Web-based tech companies. StartEngine is particularly interested in working with companies that have at least two founders, one of which must be an engineer. "A single founder company is difficult to handle," Marks says. "With two minds instead of one you have the power to bounce ideas off each other."
Marks also stresses that it's not the idea that makes a start-up successful; it's the people behind it. So if StartEngine has a choice between two companies, one with a great idea but weak founders and another with a weak idea but very strong founders, it would without a doubt go with the latter.
The program is only 90 days and it's designed to offer connections, mentoring relationships, educational tools, and additional resources. And just because the program ends in three months doesn't mean the companies are just left to the wolves at the end of the allotted time period. StartEngine helps them maintain connections within the network.
Whether you are a first-time entrepreneur or not, L.A. is a great place to get your start-up off the ground, and there is certainly no shortage of investors and mentors who want to help you out.
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