“We think there’s a tremendous opportunity in Los Angeles. There are really great business schools here and yet it seems to be overshadowed by Silicon Valley, but we think culture, talent pool, creativity is ripe for entrepreneurship and innovation”
-Ron Miller, StartEngine
I worked for a small high tech PR firm for my first job out of college. The Internet was really taking off and major cities across America were trying to stake their claims as the next Silicon Valley. Chicago was Silicon Prairie and New York was Silicon Alley and startups were popping up all over the place. Then the bubble burst.
With the economic collapse of 2008, the growth of portable devices and apps and non-traditional funding from sources like Indiegogo and Kickstarter, there appears to be a resurgence of entrepreneurial companies, especially in the tech space and accelerators helping them fast track their products to market and subsequently profitability.
I recently had the opportunity to chat with Ron Miller, CEO Crowdfunding and partner for StartEngine, Los Angeles’ largest accelerator.
Just to give you an idea of the firepower behind the company, Ron founded, built and sold five companies through management buyouts, private equity firms, private investors and public markets. He is a four time Inc. 500/5000 Award recipient and an Ernst & Young Entrepreneur of The Year Award Finalist. Not too shabby.
Howard Marks is a technologist and co-founder of ATVI (11B+ market cap) and other successful games companies. He also was co-founder, former Board Member and Executive Vice-President of video game giant Activision (Pitfall). He and a partner took control and in 1991, turned the ailing company into the $14B market cap video game industry leader.
Paul Kessler is co-founder and a Partner at StartEngine and is Principal and Founder of Bristol Capital Advisors, LLC. Mr. Kessler has extensive experience in all aspects of financing emerging growth public/private technology and bio technology companies. Mr. Kessler is recognized as a prolific investor, financier, venture capitalist and operator having completed over 500+ investments.
Start Engine’s mission is to help make Los Angeles a top tech entrepreneurial city. If you can get into the program, you’re in good hands.
Why do you work with startups?
I wanted to give back and help young people succeed beyond their own expectations. I built businesses using young people as managers and incorporated systems to help them become strong managers and leaders.
How many companies have you accelerated and how successful were they?
We’ve helped launch 52 companies in last two years. Seven to eight of those were incredibly successful. And 20 are currently in the process.
What do you look for when deciding whether or not a company gets accepted into the program?
Most of our companies are in the tech space – media tech, advertising tech and game technology and we don’t accept a company unless they’re successful. We use four criteria to determine which companies we work with:
- Quality of the team, not necessarily idea
- One co-founder is an engineer
- Pedigree – what school?
- Grit or the tenacity to be a CEO
Why Los Angeles?
We think there’s a tremendous opportunity in Los Angeles. There are really great business schools here and yet it seems to be overshadowed by Silicon Valley, but we think culture, talent pool, creativity is ripe for entrepreneurship and innovation. For more, check out this Fast Company article – http://www.fastcolabs.com/3027063/los-angeles-is-a-sleeping-software-titan-thats-about-to-wake-up
How is entrepreneurship changing?
Entrepreneurs are getting younger. We think what we’re witnessing right now could be the greatest era for entrepreneurship in human history.
Never before have we valued entrepreneurship for opportunity and helping the world in a significant way and we’re seeing it from schools to Wall Street. There’s shared value across the board.
Why is this happening? What’s contributing to this change?
First, I think the vision was laid in the original dot com boom of the 90‘s. As the internet grew, other people in the world can perform work that was previously the domain of Americans. The recognition is innovation can’t be outsourced through the internet – one thing we do very well today.
Second, the great recession. A concern shared by young people that there was a lot of mobility in their corporate America jobs lead to a feeling they needed to create jobs and they decided to create great companies.
How is StartEngine Different?
We’re in the process of building our own crowdfunding platform. It’s an equity platform that will operate under Title Three of the Jobs Act and that will allow entrepreneurs to raise capital and raise ideas, igniting what we refer to as the entrepreneurial generation or start up generation.
The second and third phases – VC and IPO – that wont’ change. What is changing is the front end. Today, unless you have customers and/or proven market traction, you can’t get venture capital. VCs moved out of seed into Series A.
We’re seeing greater interest in the availability and opportunity for companies to use social networks for raising capital and for those that invest capital to take an active interest in the companies they invest in because they want to be connected. This is targeted toward generation Y and Z, where there’s a desire to collaborate to build something great with financial retirement being a secondary motive.
Crowdfunding growth also means there’s 100s or even 1000s of brand ambassadors hopefully helping build market presence and sales.
Just consider – 3 million people pledged $480 million to Kickstarter projects in 2013.
Our platform will have opportunity to collaborate, but also to financially participate in the rewards of success.
Time will tell if LA is recognized as a tech hub like Silicon Valley, but Start Engine is doing its part to make it a reality. What do you think?