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XVenture Capitalists Flock to LA for the Deals—and the Beach
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Venture capital firm Andreessen Horowitz grabbed headlines this month by firmly planting its flag in Los Angeles. The VC—also known as a16z—opened an office in Santa Monica and helped organize L.A. Tech Week, a seven-day series of events that also served as the firm’s coming out party here.
But a16z is not the only VC firm expanding its presence in L.A., even if it’s been more public about it. Sony Ventures, the investment arm of the Japanese entertainment giant, held an informal office opening in Culver City this month to kick off L.A. Tech Week. Other firms and funds, such as Bling Capital, Anthemis and Expa, have quietly added employees based in the area or seen team members move here for personal reasons.
The result is more venture capitalists on the ground in Los Angeles, a growing tech hub now home to a handful of big name startups and tech giants, from SpaceX to Snap. The region’s tech and startup scene is one reason VCs have flocked here, experts in the industry told dot.LA. The influx can also be attributed to the rise of remote work and Silicon Valley’s weakening grip on the tech sector—a decentralization that has benefited places like Miami and Austin, too.
“Many funds—I’m finding more and more each day—have someone who just moved here full time,” said Kristin Kent, a principal at Expa, the startup studio and venture fund launched by Uber co-founder Garrett Camp.
Kristin Kent, principal at Expa.
Photo courtesy of Kristin Kent
Kent moved to L.A. from San Francisco about a year ago. She expects some colleagues to join soon. One of the firm’s partners, for example, just had an offer on a house accepted and plans to move to the region by year’s end. Expa, which was founded in the Bay Area and raised a $200 million fund in April, is looking at L.A. more often when making investments, Kent said.
“L.A. is exciting because it has, historically, felt more like media and entertainment only, but it’s becoming way more than that now, which is exciting for a lot of venture funds,” Kent said. “We are seeing tons of other companies start to come from L.A. We're starting to see some good talent develop in the area.”
Andreessen Horowitz, a Silicon Valley power broker, announced in July that it would move its headquarters “to the cloud” and become a mostly virtual firm. As a result, the company opened offices in New York, Miami and at 1305 2nd Street in downtown Santa Monica. Though the firm declined to comment for this story, general partner Andrew Chen recently explained on his blog why he personally moved to L.A.—specifically Venice. “It’s walkable, hip, artsy and has pockets of amazing beauty,” he wrote of the beachside neighborhood.
“Since arriving in L.A., I’ve been working with the startup/VC community to help boost the already vibrant tech ecosystem here. We’re committed to have a major presence here,” Chen wrote, noting the firm already has “several dozen employees” in the area. He said he’s now overseeing a16z’s new gaming fund and has maintained “several rotating dinner series for games industry founders and executives.”
One of the biggest names in gaming, Sony, has also dedicated more resources to L.A. Sony Ventures, which manages the emerging tech-focused Sony Innovation Fund, opened an office in April on the company’s Culver City studio lot. After traveling back and forth from the Bay Area to L.A. since 2016, Sony Ventures grew its team here in 2021 and now has three people, said Joseph Tou, the U.S. managing director for Sony Ventures. That headcount is likely to grow as Sony Ventures seeks to further immerse itself in L.A.’s tech scene, particularly in the entertainment space where the region—and Sony—are leaders.
“I just have a firm belief that when it comes to investing, you have to be part of the fabric of those things,” Tou said. “I've been flying to L.A. for 10 years, but I think living here and being in the Southern California ecosystem, it's way different than if you're coming and visiting. So therefore, an office.”
VCs, in some ways, are following the wave of tech talent that moved to Southern California during the pandemic. That included many founders and executives who’ve flown south from the Bay Area, said Kyle Lui, a general partner at Bling Capital who recently moved here himself. L.A. is seen as a sensible place to relocate, not only for quality of life and L.A.’s growing tech scene, but as a way to remain close to the industry’s power center in Silicon Valley if needed.
“There are a lot of second- and third-time founders who started their first company in the Bay because you had to, and now you don't,” Lui said. “They've decided they want to live where they want to live, and so L.A. has been a great destination.”
Vinay Singh, managing director at Anthemis Group, moved to Santa Monica just three weeks ago from New York. His firm, founded in London, has increasingly focused on deals in Southern California, he said. Moving to L.A. gives his firm a presence in L.A. without opening a physical office—while allowing him and his family to live by the beach.
Singh sees similarities between the early days of New York’s tech ecosystem and L.A., from big name startups like Snap going public to an influx of VCs to funds launching in the area.
Vinay Singh, Managing Director at Anthemis Group
Photo courtesy of Vinay Singh
“That is kind of what I saw starting to happen seven, eight years ago in New York, and it's repeating itself here,” Singh said. “That's exciting because I think it's kind of a harbinger of what is possible in L.A.”
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
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LA Venture: Arrowroot Capital’s Kareem El Sawy On Navigating Structured Equity
In this episode of the LA Venture podcast, Arrowroot Capital’s founding General Partner Kareem El Sawy discusses how to navigate structured equity.
Founded in 2014, Arrowroot helps enterprise software companies “that are past the VC stage not quite at [the] buyout stage” that are looking for capital to help them reach profitability. The private equity firm offers bespoke growth capital options, usually cutting checks between $10 million to $40 million. It’s now approaching $700 million in assets under management (AUM), El Sawy said.
Structured equity can assist venture capital-backed companies that have fallen off the venture path for one reason or another.
“The reality is most software companies have burned $300 million, $50 million, $10 million, $70 million—all over the place,” he said. “They're on Series G. They're on Series A. They're on Series C. They're on Series one. It's really never a straightforward path.”
Arrowroot is looking for these under-resourced “Cinderella” companies that El Sawy says exist overlooked in many venture portfolios. Arrowroot sifts through a massive pipeline to identify these companies and then offers them capital that may come with liquidation preferences, dividends, warrants or other governance that gives Arrowroot downside protection to their investment.
“A lot of our growth capital goes towards a one-time transition of some sort,” El Sawy said. “Maybe it's an old product, a new product—maybe it's an invisible transition where the market finally came.”
Unlike many private equity investors, Arrowroot is not a control investor–they often take an ownership stake of around 30% to 35%, El Sawy said. Because their term sheets are not “vanilla” term sheets, El Sawy says that their investments take some time to talk through with management. Arrowroot’s track record and references are useful for teams trying to understand how to think about what are often unique investment terms.
El Sawy says that they are seeing many more deals in their pipeline nowadays as the gap between venture capital and private equity has gotten wider. There are many companies that don’t exactly fit the model for an investment from either group and that is where Arrowroot is able to step in.
“We're the bridge,” he said. “We’re the tour guide through that bridge”.
Prior to joining Arrowroot, El Sawy was in private equity at L.A.-based OpenGate Capital. He joined founder Matthew Safaii in 2014, during Arrowroot’s first few months. Initially, he said the firm focused on providing smaller growth checks, but has grown rapidly. Arrowroot’s portfolio includes mParticle, ParkHub and SocialChorus, and it has guided companies like Evergage to big exits. Overseeing this portfolio has helped the firm gain a reputation for being able to navigate to long-term success, he said.
“We're known at this point as that kind of guide for these companies and saying, ‘Look we've done it before’,” El Sawy said. “‘We've taken it to huge exits. We're gonna do it again for you.’”
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.
dot.LA reporter Kristin Snyder contributed to this post.
This Week’s Cyber Attacks at US Airports Could Be Just the Beginning
Monday's attacks on U.S. airports, including Los Angeles International Airport (LAX), were—on the surface—a nuisance, but experts say they could signal trouble ahead.
Russian cybercrime gang Killnet claimed the attacks on more than a dozen American airport websites, including Hartsfield-Jackson Atlanta International Airport (ATL), and Chicago O'Hare International Airport (ORD) along with LAX. The group listed its targets on its Telegram channel. For a time, the Distributed Denial-of-Service (DDoS) attacks—in which websites are flooded with “junk” traffic, overwhelming servers—either slowed or took the airports’ public sites offline completely, according to the Los Angeles Times.
Still, Infosecurity Magazine reported that the attacks had “no direct impact on airport operations.”
An attack like this wasn’t exactly unexpected. Multiple federal agencies authored an April 2022 cybersecurity advisory warning that the February Russian invasion of Ukraine might “expose organizations both within and beyond the region to increased malicious cyber activity.” It mentioned DDoS attacks and named multiple known cybercrime gangs, including colorfully named groups such as Salty Spider,Fancy Bear, and Killnet, which took down Connecticut’s Bradley International Airport in March.
Infosecurity Magazine’s story also noted that early press coverage about the April advisory was criticized for raising alarms about what some security experts wrote off as essentially “kids” making digital mischief.
But denial-of-service attacks aren’t simply cyber vandalism, said Bryan Hornung, CEO and founder of Philadelphia-based Xact IT Solutions.
“We usually see three types of DDoS attacks,” he said, “One, where they create a nuisance to let you know what they are capable of. Two, where they use DDoS to mask a more severe type of attack. Three, where they hold the network traffic hostage and demand a ransom to stop the DDoS attack.”
“In these cases,” Hornung continued, “there are plenty of other ways to stop the attack, so cyber criminals do not typically succeed with extortion regarding DDoS.”
Cybersecurity firm Tanium’s Director of Security Research Melissa Bischoping agreed that the attacks should be taken seriously. “The concept of a denial of service may seem inconvenient and annoying,” she told dot.LA, “but DDoS attacks can be used to take critical systems—or revenue-generating systems—offline, impacting your organization’s bottom line.”
Bischoping and Hornung agreed that these types of attacks could be used for pure disruption and nothing more. Still, Hornung said that often “we see DDoS attacks happening to divert the attention of technical people, so a different, more severe attack can be deployed.”
“How they are used depends on the attacker’s skill level, motivation, and the level of access they have obtained in the environment,” said Bischoping.
Any time there’s a chance for “increased economic disruption, social unrest and political uncertainty, cyber attacks also tend to increase,” Bischoping added.
“This can be due to ‘hacktivism,’” she continued, “nation-state efforts, or criminal activity for economic gain.” In addition, she said we should expect “all future military conflicts to have some cyber element to them, including the current ones.” For that reason, she said, it’s crucial to remain vigilant.
Asked if Russian losses in Ukraine will likely lead to more cyber attacks, Hornung replied, “The cyber war will intensify regardless of what happens in Ukraine.”
He also wasn’t ready to dismiss DDoSing as the work of independent groups acting alone.
“No cyber criminal activity in Russia happens without approval from Moscow,” Hornung said.
United Talent Agency Launches Fund to Invest in Web3, Creator Economy
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
United Talent Agency is linking with former stakeholder Investcorp to create a strategic partnership that will invest in startups focused on culture and technology, including Web3 and the creator economy.
The new venture is called UTA.VC. Investcorp is a previous investor in the Beverly Hills-based agency; it first backed UTA in 2018 but sold its stake in July to Swedish private equity firm EQT Partners for a reported $800 million.
Now, UTA and Investcorp are looking to invest in startups that are synergistic with areas UTA has long been interested in, whether as an investor or agency – including entertainment, creator-focused startups, consumer products and, more recently, Web3 and NFTs.
UTA.VC will be led by UTA general partners Caroline Jacobs, Clinton Foy and Sam Wick. Anand Radhakrishnan, managing director of Investcorp’s United States private equity division, will serve as a partner.
In a press release Wednesday, UTA.VC said it is targeting companies working in the creator economy, Web3 and the future of entertainment. Vague, yes, but UTA said it defines this as “technologies driving the production, distribution and consumption of content.”
Financial terms of the deal were not disclosed. UTA wouldn't disclose the size of the strategic partnership’s fund, though the UTA.VC website notes several recent investments, including blockchain company Consensys (where Jacobs is a board observer), influencer marketing tool Bounty and NFT marketplace Percs.
The agency has been investing in startups since at least 2014, under the banner of UTA Ventures. Notable local investments UTA Ventures has made over the years include Pluto TV, NTWRK and Cloud9 Esports. UTA Ventures also backed firms that went from tech upstarts to household names, including Patreon, Lyft, MasterClass and Cameo.
Venture funding database PitchBook notes UTA Ventures investments date back as far as 2012. Its biggest hits include Santa Monica-based YouTube channel AwesomenessTV, which sold to DreamWorks Animation in May 2013 for $33 million.
“UTA.VC is the next evolution of UTA’s venture platform,” Foy and Wick said in a statement Wednesday. “The strategic partnership builds on our successful previous investments in companies… and we are thrilled to have the opportunity to invest and partner with the next generation of companies in this space.”
Other competitors to UTA such as the Creative Artists Agency and Endeavor are prolific investors in tech. Within the last two years, CAA Ventures has seen sales of portfolio companies including Genies, Thatgamecompany and Hinge. Endeavor’s been on the buy side of a number of deals so far this year, as well. Solidifying its venture capital thesis and shoring up a firm that is dedicated specifically to identifying potential moonshots in the startup community is a key way for UTA to prove it’s a competitor.
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Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.