Tapping Into Group EffortOP-ED: Crowdfunding could be capital idea that goes long way toward unlocking L.A.’s entrepreneurial potential. Monday, December 3, 2012
Carter noted that out of 2,000 applications, Amplify invested in 16 ventures.
According to Marks, StartEngine’s current portfolio includes 42 companies and with that, the number of companies that are backed by the remaining L.A. accelerators is believed to be about 100. But with 400,000 registered businesses in Los Angeles and 4,000 local engineers who are graduates from the country’s leading schools, the number of “accelerated” ventures should be much higher.
“There is no doubt the amount of (entrepreneurial) activity in Southern California has never been close to this level and it continues to expand,” said Rick Smith, managing director of Crosscut Ventures, who has been a venture capitalist for more than 15 years and who is very optimistic about the L.A. investment climate.
“Local accelerators are bringing new companies and entrepreneurs even from outside of California.”
Long way to go
Los Angeles – and particularly the Westside technology hub dubbed Silicon Beach – still has a long way to go to match Silicon Valley, known worldwide for such brand-name IPOs as Facebook and Yahoo. The AngelList presently names 5,861 startups in Silicon Valley, almost four times as many as in the whole of Los Angeles.
But Los Angeles doesn’t have to have “the next Facebook” in town in order to earn public acceptance as a technology hub, for crowdfunding can transform the startup ecosystem of the city.
A note of caution was sounded by Hale Boggs, a partner at Manatt Phelps & Phillips LLP, a leading L.A.-based law firm focused on emerging ventures, who told the forum: “While the concept of the new asset class is exciting … a lot has to do with how the regulations about all this come down (from the Securities and Exchange Commission). And the reason that they have not come down yet is that the regulators are struggling about the amount of disclosure and what kind of disclosure has to be provided to everyone out there who can write a $50 check or even less. … It really does make you wonder – can it really work?”
The entrepreneurial and investment community is mostly positive that it can – and that Los Angeles can be at the forefront. With L.A.’s famous creativity and flexibility plus the present boom of its digital media and technology industries, it is clear that the city is a vibrant place for startups, and the forum revealed a lot of potential synergies.
The future is bright – and apparently that future is being crowdfunded.
Victoria Silchenko is founding partner and chief executive of Metropole Capital Group in Century City and an organizer of the Next Generation Entrepreneurship and Global Crowdfunding Forum.