MuckerLab now stands alone among top-tier accelerators in Los Angeles in holding on to the demo day tradition.
While Launchpad and Amplify have done away with the official graduation ceremony for each class of startups, MuckerLab has remained faithful. Last week, the accelerator, co-founded by entrepreneurs Erik Rannala and William Hsu, presented its latest class of startups at the Museum of Flying in the Santa Monica Airport.
The founders of eight companies made their pitches in front of friends, grads of previous Muckerlab sessions and investors. Among the companies presenting were Tapatalk, a social network for sharing interests online; Verifico, a platform that connects financial service professionals with customers; and BloomNation, a consumer marketplace for florists.
Accelerators generally pride themselves on having a diverse set of startups, so it’s difficult to pick out a theme across the group. Broadly, though, this class largely came from the realm of enterprise tech: Of the eight, all but one featured services at least partly aimed at businesses as customers.
Rannala said he didn’t set out to pick enterprise-oriented companies. But he acknowledged that the current investment landscape does benefit companies that pitch their services toward business.
“We saw quite a bit of enterprise-focused startups apply and we want to invest in businesses that are going to be successful,” Rannala said. “But I wouldn’t call it a conscious effort.”
Some have theorized that the rise of enterprise tech startups is a result of the so-called Series A crunch, a term describing the dearth of companies getting funding after their seed rounds. Enterprise companies, the thinking goes, are more likely to produce revenue sooner and be more appealing to investors.
But consumer-facing businesses have also gained traction, from the successful public offering by Twitter to the huge valuations for messaging apps such as Venice’s Snapchat Inc.
At the demo day event, Rannala touted MuckerLab’s success since its founding in 2011. Eighteen startups have emerged from the program so far, raising $40 million in follow-up funding and creating 150 jobs.
The prevailing theory now is that investors have become fatigued by demo days and the seemingly endless parade of pitches. Most accelerators now prefer informal meetings with venture capitalists or having the investors serve as advisers to the programs.
But Rannala defended the value of the demo day, even if it isn’t the most popular format anymore.
“Demo days bring a lot of people together and are an opportunity for companies to formally launch,” he said. “Our attendance has kept going up. We haven’t seen the fatigue people have talked about.”
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