In 2011, Scott Alderton set out on a mission. As one of the co-founders of the tech-focused law firm Stubbs, Alderton & Markiles, Alderton saw a slew of accelerators and incubators pop up in the Los Angeles area to support the scattered, early-stage startup sector.

Seemingly every category of tech included an early-stage support program. Environmental startups saw the Los Angeles Cleantech Incubator launch in 2011. O3 opened in Santa Monica to support health care, and even fast-casual food chain Chipotle launched an accelerator for foodtech in that same year.

And so, Alderton decided then to help pioneer Sherman Oaks-based Stubbs Alderton & Markiles’ Preccelerator Program, an accelerator program for startup founders whose companies were in their infancy.

The firm opened up an office in Santa Monica with the idea that its bird’s-eye view on the legal aspects of the tech sector would be an asset as founders navigated through term sheets, licensing agreements and legal jargon. The 13-year-old program provided venture connections, mentorships and legal services for more than 50 local companies that would go on to raise more than $62 million in follow-on funding.

“Our approach and strategy at that time was to attach ourselves to all of those (accelerators) as a law firm that was a player in the market and support the ecosystem that they were creating and involved in what was emerging at Silicon Beach back then,” Alderton said.

But in late June of this year, the program officially shuttered.

It’s not the only one. Accelerators and incubators – often built to help startup founders to access support, workspaces, administrative tools and networking opportunities at a lower cost – are having an identity crisis of sorts. One out of four Los Angeles-based accelerator and incubator programs established since 2010 have shuttered, according to PitchBook data.

As the networks of tech hubs have gone increasingly virtual and global, the early-stage programs, once considered the bedrock for a local tech ecosystem looking to constantly create new companies, are changing.

“The reason why we shut it down was simply economic. All accelerators are going this way, there are no real physical accelerators anymore,” Alderton said. “[Accelerators] don’t have physical space because entrepreneurs don’t really want to be in a physical space, they want to work remotely.”

Moving parts of a tech hub

There are many benefits to sustaining a localized tech sector. Tech is a high-growth industry that is more likely to rent out office space, hire locally, order from local restaurants and pay employees competitively – which then gets recycled back into local commerce in the form of restaurants, dry cleaners and movie theaters.

That’s why Glendale is focused on boosting its tech sector, said David Crawley Delgado, the tech-focused senior economic development coordinator of the City of Glendale.

In October, the city awarded a $1 million grant to FoundersBoost and SmartGateVC to encourage early-stage startup development through various programs.

“There’s very clear alignment with high growth companies and what it will be able to provide for the city so that we can in turn give that back to the residents and to the businesses to develop infrastructure,” he said.

FoundersBoost got to work on its search for companies that would be a good fit for its SoCal B2B Accelerator in Glendale. The program had past success in combing through local networks to find the right startups. FoundersBoost first launched in Los Angeles, Detroit, Canada and Ireland in 2017 before expanding into more than a dozen other areas like New York, the United Kingdom, Italy and Kenya. Goals of each accelerator differ based on the local ecosystem, including what city innovation programs are prioritizing, what big players currently exist and what local venture firms want.

“We had our application process. We had good deal flow,” said Brandon Gerson, one of the directors of the SoCal B2B Glendale program. “I would have liked to have seen more, but I think because of geographical constraints, making sure the companies are building relatively near Glendale as they scale there and hire more was important.”

At Stubbs Alderton & Markiles, the preaccelerator program would get more than 350 applications per cohort – around half of which weren’t based in Los Angeles.

“They were international, or national, or virtual, but they weren’t necessarily around here,” Alderton said. “And for us, it was important that they be local because what we were trying to do is support the local community.”

When Techstars announced its Los Angeles accelerator cohort for the fall of 2024, six out of 13 startups were not based in Los Angeles. Another three straddled between two headquarters, one of them being in the SoCal area.

Changing the narrative

“I’ve been thinking a lot about how the pandemic kind of impacts local ecosystems in terms of support,” said Blake Caldwell, a co-founder of FoundersBoost. “What are startup ecosystems going to look like when the core drivers – the VCs, and those that are funding these companies – are not necessarily looking all completely local?…Are they really creating the fabric that creates these ecosystems that helps to drive and bring these companies forward?”

As a software engineer himself, and the chief executive of a handful of tech upstarts, Caldwell was drawn to the lean startup methodology – a framework for launching a new company that could quickly determine if the business’s model was viable and nimble enough to go to market faster. When he co-launched FoundersBoost in 2017, the goal was to help the earliest stage of a tech ecosystem find its footing among a larger ecosystem.

“The genesis of building out this model started with really testing: what is the most efficient way to help companies, and all those involved, and stakeholders? With the idea that mentorship is what really pushes the needle forward for a company,” Caldwell said. “They all have their own strengths and weaknesses and understandings and shortcomings, and so we were bringing people in who really have been there and done that to really help out and guide them.”

Stubbs Alderton & Markiles decided to go a different route to help companies. It held a last hurrah party in June for its graduates. The walls were peppered with the logos of each startup that entered the program with just a name and an idea of what it could be.

“We’re not abandoning our commitment to the startup ecosystem,” Alderton said. “We are just moving it over from a physical incubator to doing it through the law firm and the law firm infrastructure.”