Distinct entrepreneurial ecosystems have sprouted up in various markets around Southern California. Los Angeles has spawned social media, entertainment and e-sports startups. San Diego is known for biotech. Orange County has a reputation for med-tech and life sciences.

Yet all three compete with each other and Silicon Valley for venture capital, a key ingredient that’s comparatively scarce down here.

Veteran tech entrepreneur and one-time California Insurance Commissioner Steve Poizner wants to end SoCal’s intramural infighting by putting collaboration over competition. He has forged Alliance for Southern California Innovation, which brings together the leaders of university-based innovation institutes – including entities at UCLA, UC Irvine and UC San Diego – in a bid to unify the entrepreneurial ecosystems and accelerate growth across the region.

All three markets have VC firms, incubators and accelerators that are already doing – on a smaller scale – what the alliance hopes to do on a macro level.

Los Angeles has a vibrant startup ecosystem, yet nothing close to what you find in Silicon Valley, said Poizner, who serves as chief executive and chairman of the alliance.

“Even Snapchat obtained most of its VC funding from Silicon Valley,” he said.

Benchmark Capital, Lightspeed Venture Partners and IVP – all based in Menlo Park – have invested in Snapchat parent Snap Inc.

IVP’s website states that one of the reasons it firm invested in Snap was because the Venice app maker is based in Los Angeles. IVP also touted that co-founder Evan Spiegel is a native Angeleno and “aspires to make Snapchat the first multibillion-dollar venture-backed success story in SoCal in over a decade.”

The goal of the innovation alliance is to provide an umbrella group that can help leverage the buzz that has led to the formation – at last count – of more than 18 accelerators and 30 incubators focused in the Silicon Beach area, according to reports. Newer VC firms such as early stage investor Mucker Capital have joined the ranks of stalwarts such as Santa Monica neighbors Upfront Ventures, downtown’s Greycroft Partners and Pasadena-based Idealab in homing in on opportunities in L.A.’s tech landscape.

The alliance is a nonprofit with no physical headquarters. It stretches from UCSD’s campus in La Jolla to UC Santa Barbara. Members work remotely.

“The timing is ideal right now for SoCal to emerge as a world-class tech hub,” said Poizner, who made a fortune on a couple of startups before his stint in politics. “Unlike most other regions of the U.S., SoCal has a large number of research universities that train a large number of talented engineers and scientists needed by startups – and there’s abundant office space.”

That doesn’t mean it’s been easy to put together the alliance, said Poizner.

“We spent many, many months prior to launch recruiting the seven universities, the research consortium, community board members and the advisory committee,” he said. “This type of alliance had never been put together before in SoCal, so there was a lot of skepticism.”

The San Francisco Bay Area, which includes Silicon Valley, remains the leading market when it comes to venture capital funds.

Poizner said part of the alliance’s mission is to get more VC firms with top-tier track records to set up offices in Southern California, or more likely, to convince some individual venture capitalists to leave their firms and set up a fund down south.

It’s an effort to rectify a chicken-and-egg-type problem: VCs want to see critical mass and some successful exits before setting up shop.

“So we are working on a dam-breaking strategy of recruiting a few great VCs … and publicizing (their) successes,” Poizner said. “We will hopefully attract some VCs by stimulating deal flow from campuses and … identify some opportunities to build centers of excellence in SoCal.”

The first venture fund to partner with the alliance is Encinitas-based Section 32, a $160 million fund created by Bill Maris, founder and former chief executive of Google Ventures.

Early converts such as Erik Rannala, co-founder and managing partner of Mucker, back bringing in competitors on the funding side of deals.

“I enthusiastically welcome new efforts to support the tech and startup ecosystems here in Southern California,” Rannala said. “Our firm was founded with a commitment to partner with entrepreneurs here in the region and invest tens of millions of dollars in Southern California startups every year.”

Incubators, accelerators

The alliance is also aiming to funnel VC-ready startups from local universities, research institutes, incubators and accelerators to firms that affiliate with the alliance.

It has a collaboration agreement with San Diego-based EvoNexus, the largest pro bono tech incubator in Southern California. The agreement details a reciprocal relationship where EvoNexus will present investment prospects to VC funds partnering with the alliance. Meanwhile, the alliance also plans to connect its members to EvoNexus to propose startups for admission to the incubator.

“The alliance develops a new innovation brand for O.C. and SoCal more broadly,” said Rory Moore, chief executive of EvoNexus and co-founder of its incubators. “The region lacks venture capital. That is the real magic of Silicon Valley. It takes large amounts of investor capital to scale a venture to a size where it can become a public company.”

EvoNexus’ portfolio has 178 companies that have amassed close to $1.2 billion in funding and outcomes, including 18 acquisitions, according to Moore.

Team effort

The alliance itself is supported by a pro bono collaboration between Latham & Watkins, which has two L.A.-area offices; New York -based Edelman for PR; Century City’s Creative Artists Agency for branding; Boston Consulting Group for strategic planning; La Jolla-based Fairway Technology for IT and web services; and London-based EY for accounting.

The alliance’s board includes Thomas Gewecke, chief digital officer of Burbank-based Warner Bros. Entertainment Inc.; Irwin Jacobs, founding chairman and chief executive emeritus of San Diego-based Qualcomm; and Sherry Lansing, former chief executive of Hollywood’s Paramount Pictures Corp. (See related story, page 1.)

Poizner, who’s no stranger to startups, also sits on the board. The entrepreneur sold two of his companies to Qualcomm, has served on the startup selection committee for EvoNexus San Diego and serves as the entrepreneur-in-residence with UCSD’s Rady School of Management.

Each member school also appoints a board member.

An advisory committee, which will provide strategic counsel to the alliance on topics including best practices and lessons learned from Silicon Valley, includes Eric Schmidt, executive chairman of Mountain View-based Alphabet Inc., and Gene Sykes, managing director of Goldman Sachs and chief executive of the LA 2024 Olympic bid committee.

The alliance intends to design a regionwide branding program presented through social media to recruit and retain domestic and international talent and create a strategic plan to identify high-priority sectors, such as artificial intelligence.

The alliance has engaged management consultancy Boston Consulting to conduct a comprehensive study of Southern California’s innovation economy and to develop an action plan for making SoCal the next global tech center. Its findings are expected to be announced this fall.

Deirdre Newman is a reporter for the Orange County Business Journal, a sister publication of the Los Angeles Business Journal.

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