Paul Bricault’s Venice-based Amplify.LA began as an accelerator meant to mentor startup founders as they navigated the complex and high-stakes world of venture funding. The accelerator slowly evolved into its own venture firm as the venture ecosystem in Los Angeles began to build out and become more robust.
Why have you chosen to set your sights on seed-stage and early-stage companies?
We started out in 2012 as an accelerator so the focus on early stage is a natural outgrowth of that strategy.
Can you explain how factors like location, risk appetite and sector preference played into your decision?
The decision to focus on early stage was in part due to the absence or paucity of early-stage capital available in Southern California when we launched the firm.
How do you define pre-seed, seed and early stage? What benchmarks do startups need to meet in order to be classified as each?
Benchmarks vary wildly by sector – an AI seed startup can raise substantial capital with zero revenue whereas an ecommerce company could not. Pre-seed for us at Amplify means a first institutional raise with a round size of less than $3 million.
Do you feel like the standard for what is classified as “seed” or “early-stage” has changed over the years in the venture community?
Seed stage has shifted a lot in the past five-to-six years. Currently, seed usually implies a raise of $3 million-plus, whereas previously (prior to 2018-2019 time frame), a seed round was often the first institutional capital raised and could have been anywhere from $500,000 to $2 million in size.
Investing in nascent companies that don’t have the reputation or revenue of developed startups is rather risky. How do you go about determining what investments are the right ones?
(A strong) team is the most important at pre-seed along with technology and TAM (total addressable market). We usually look for a cohesive team that has relevant domain experience and often has worked together previously and while there doesn’t have to be proprietary tech, we expect there to be strong technical and product chops on the team that has some edge in addressing the problem/market they are focused on.
What is the riskiest investment you’ve ever made? How did it play out?
All investments in early stage have a high element of risk so cannot pick one that was inherently “more risky” than another.
What late-stage or exited company are you proud to say you’ve invested in early? What about that company made it worth the investment?
Floqast – an L.A.-based company that has scaled well beyond unicorn status with the same founding team still leading the organization.
What role do seed-stage and early-stage firms play in the larger startup community?
Providing the earliest stage financing for local startups so they can remain local and not have to seek capital elsewhere.
What role do you see later-stage venture firms playing in bolstering the innovation ecosystem?
Providing readily available late-stage capital to enable local companies to scale and grow.
Have you ever made an investment you regretted? Can you explain what happened?
Many. Investing at pre-seed will by its very nature result in a high loss ratio – without singling out any specific company, it often was a byproduct of either a significant shift in the market that was being addressed (i.e. adjustments by Google and Facebook several years ago that led to a decline in adtech investments) or a rift in the founding team dynamic that was deleterious to the company culture/morale.
As the startup community in Los Angeles has gotten more developed, and as startups globally blurred geographic lines since the pandemic, how has your brand as a Los Angeles venture firm evolved?
As the L.A. startup market evolved, so did we. Amplify started as an accelerator writing small ($50,000-to-$100,000 checks) into pre-product companies which was the most salient need in L.A. tech circa 2012. With the growth in the local ecosystem over the last decade, we moved upstream to address the biggest capital gap which was at pre-seed. L.A. saw a rapid increase in seed and later stage capital but there was a lack of pre-seed funding so our brand is still SoCal-focused but we now are pre-seed in terms of stage.
