Can a Startup Help Alleviate California's Housing Shortage? United Dwelling Raises $10 Million
Ben Bergman is the newsroom's senior reporter, covering venture capital. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks. Follow him on Twitter.
Culver City-based United Dwelling, which aims to help alleviate California's critical housing shortage by helping homeowners turn their garages into stylish studio homes they can rent out to tenants, announced Tuesday it has raised $10 million in series B funding to be able to build more units.
"This is the biggest problem facing California," said Steven Dietz, founder and CEO, before pausing for a moment to add: "Well maybe it's the second biggest problem right now."
United Dwelling, which has gotten glowing press in The New York Times and Fast Company, was born out of a loosening of California laws in 2016, further relaxed this year, that allow more homeowners to build Accessory Dwelling Units, or ADUs. The company says there are more than 250,000 underused two-car garages in L.A. County, the vast majority of which are simply being used to store junk. "That's a really bad use of residential space," said Dietz.
United Dwelling partners with homeowners to find a contractor for construction, find qualified tenants and manage and maintain the property. It leases the garage or land for a set number of years (usually 15 years) and the homeowner gets a cut of the rent or can choose to buy back the ADU at any time for $79,900.
To save on construction costs, United Dwelling will only build when it has secured contracts on five properties within two miles of each other. The company targets lower-income neighborhoods and so far all of its projects have been along the Expo Line west of the University of Southern California.
"What we do is not appropriate on a four million dollar million property," said Dietz.
The interior of a converted garage.Ben Kessler (United Dwelling)
Westwood-based Alpha Edison led the round, which included investment from Lightspeed Venture Partners. The funds will be used to support the installation of over 150 ADUs in 2020 and 1,500 in 2021.
Dietz's career has gone in the opposite direction of the traditional tech trajectory. He was a founding general partner at Upfront Ventures in 1996 and stayed at the firm for two decades before leaving to become an entrepreneur in 2016.
Dietz started raising the series B at the beginning of the year. Just as the round was ready to close, COVID-19 hit. "I had term sheets and the world started to change," he said. "I thought the valuation had to adjust. We took it down 10% and moved forward."
The company paused construction for five weeks but is now ramping up again. Some practices it adopted during the pandemic will become permanent. For instance, the company saw no drop off in conversion rates when it switched from visiting people at their homes to virtual consultations, so that will stay.
Dietz acknowledges it is a strange time to be building a new company, but he notes that even though it has taken a temporary backburner, the state's housing problem is not going away. He also says a recession could make the company's thesis even more appealing.
"I think the economic situation makes a second source of income more interesting to homeowners," he said.
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LA Tech Updates: TikTok pays Creators as Rivals Dig In, Amazon Reportedly Eyes Sears, J.C. Penny Stores
TikTok Doles Out Money to Creators, Batting Away Rivals<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ0ODQ3Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwMzI2Nzc5OH0.nqOLhJhVWxeEzL1-Bs6w7LNxiiNnnx0-o7rlFhF1f1w/img.jpg?width=980" id="b7b3a" class="rm-shortcode" data-rm-shortcode-id="624f145b0a9bfe26d79eb69af3533a7e" data-rm-shortcode-name="rebelmouse-image" /><p>Tiktok announced today the first receipts of a $200 million creator fund including several Los Angeles-based app stars. It comes as the social app faces<a href="https://dot.la/instagram-reels-2646902459.html" target="_self"> increased competition</a> from those trying to<a href="https://dot.la/triller-2646853219.html" target="_self"> lure away talent </a>and the threat of an outright ban.</p><p>The company has promised to up their funds for rising U.S. creators to <a href="https://dot.la/does-tiktok-pay-2646841503/tiktok-promises-2-billion-for-creators-over-3-years-as-rivalry-with-facebook-heats-up" target="_self">$1 billion </a>over the coming three years. </p><p>Among the 19 selected so far is Los Angeles-based <a href="https://firstname.lastname@example.org?lang=en" target="_blank">Alex Stemplewski</a>, a photographer who shares the impromptu photo shoots he has with strangers in public with his 9.6M followers.</p><p>There's also <a href="https://www.tiktok.com/@lgndfrvr?lang=en" target="_blank">Justice Alexander</a>, one of the top Latino creators on the app, who captures quick video of the many pranks he plays on his girlfriend and daughter with his 5.4M followers.</p><p>Well-known TikTok-er <a href="https://www.tiktok.com/@daviddobrik?lang=en" target="_blank">David Dobrik </a>recently gave away a Tesla to one of his more than 20M followers <a href="https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-3-giveaway-david-dobrik-results-video" target="_blank">as part of a sweepstakes for the most heartfelt story</a>.</p><p>The Creator Fund will open their applications in the middle of the month for anyone 18 years or older looking to expand their work on Tiktok. To be considered, creators must have 10,000 followers or at least 10,000 video views in the last 30 days and follow community guidelines.</p>President Trump recently signed an executive order that will ban the Chinese-owned company by September 20th unless it's sold to an American company before that date. TikTok has responded by threatening legal action.
Amazon Wants to Use Sears and J.C. Penny Stores as Fulfillment Centers: WSJ<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjkzMzU3MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1OTUxNDQzOX0.2jvZQNPg69Ok14O5ag1zX33kbKt1aD8iK7bz4EJVw3k/img.jpg?width=980" id="bb2d6" class="rm-shortcode" data-rm-shortcode-id="4918cc13e6e261fe485e6ddcf2185d78" data-rm-shortcode-name="rebelmouse-image" />live.staticflickr.com <p>Amazon is in talks with mall operator giant Simon Property Group to convert Sears and J.C. Penney department stores into package distribution centers, according to a report from <a href="https://www.wsj.com/articles/amazon-and-giant-mall-operator-look-at-turning-sears-j-c-penney-stores-into-fulfillment-centers-11596992863" target="_blank">The Wall Street Journal</a>.</p><p>The discussions come as Amazon continues to grow its e-commerce empire which has helped contribute to the downfall of brick-and-mortar retailers including Sears and J.C. Penney, which both filed for Chapter 11 bankruptcy protection. That trend accelerated with the pandemic as malls closed and millions of consumers rely on Amazon for online shopping.</p><p>Shares of Simon Property Group, which has 21 malls in California including the Del Amo Fashion Center, Brea Mall and Ontario Mills, jumped on the news. The company is set to report earnings after Monday's market close. </p><p>Adding more warehouses would help Amazon speed up deliveries as the company plans to offer its Prime members 1-day delivery of their orders. Amazon<a href="https://ir.aboutamazon.com/news-release/news-release-details/2020/Amazon.com-Announces-Second-Quarter-Results/default.aspx" target="_blank"> posted $5.2 billion in profits in the second quarter</a>, doubling its bottom line from the same quarter a year ago, despite spending more than $4 billion on COVID-19 initiatives.</p><p><a href="https://www.geekwire.com/2020/amazon-reportedly-wants-use-sears-j-c-penney-stores-fulfillment-centers/" target="_blank"><em>This story was originally appeared on GeekWire.</em></a></p>
Join us on Tuesday, August 11th at 11:00am PST for an exclusive dot.LA Strategy Session: Is the Green Rush Over?
California is the world's largest legal pot market, generating nearly $3.1 billion in spending in the Golden State alone. But cannabis-related businesses in the U.S. live in a legal-limbo, operating in this strange gray area between federal laws that make marijuana illegal and states that have decriminalized its use and sale entirely. This has led to sometimes difficult choices, workarounds and issues with which the cannabis and cannabis-linked companies are forced to contend.
Hilary Bricken, Partner of Harris Bricken
Hilary Bricken, Partner of Harris Bricken<p>Since joining Harris Bricken in 2010, Hilary has earned a reputation as an exceptional and fearless business law attorney. Hilary's clients—start-ups, entrepreneurs, and companies in all stages of development—value her bold approach to business strategy. Hilary also appears before city councils and community forums, where she advocates tirelessly for her clients.</p><p>In 2017, the American Bar Association (ABA) named Hilary one of the <a href="https://www.americanbar.org/news/abanews/aba-news-archives/2017/07/aba_young_lawyersdi/" target="_blank">top 40 young lawyers</a> nationwide and before that <a href="http://www.bizjournals.com/seattle/news/2013/12/14/newsmakers-of-2013-deal-makers.html" target="_blank">The Puget Sound Business Journal</a> named her as one of only seven deal makers of the year. She was by far the youngest and the only private practice attorney to garner this honor. Hilary was also named one of "<a href="http://www.bizjournals.com/seattle/print-edition/2015/09/11/2015-40-under-40-hilary-bricken.html" target="_blank">40 Under 40</a>" leading businesspeople by the PS Business Journal. In every year since 2014, Hilary has been chosen as a "Rising Star" lawyer by Super Lawyer's magazine.</p><p>Major media outlets like the New York Times, VICE, the Los Angeles Times, Chicago Tribune, Business Insider, CNN, Rolling Stone, Forbes, MSNBC, and Bloomberg all have turned to Hilary for her on-the-ground perspective on cannabis laws. Hilary's <a href="https://www.youtube.com/watch?v=0M4Fse1Ioaw" target="_blank">Tedx talk</a> on "big cannabis" (see below) has garnered more than 50,000 views and she also authors a weekly column for <a href="https://abovethelaw.com/tag/hilary-bricken/" target="_blank">Above the Law </a>on marijuana policy and regulation.</p>
Tanya Hoke, Managing Director of Galen Diligence
Tanya Hoke, Managing Director of Galen Diligence<p>Tanya has more than a dozen years of experience managing investigative due diligence for clients in industries ranging from pharmaceuticals and manufacturing to financial services and consulting. She has been advising investors in the cannabis industry since 2015, and focuses on issues relating to fraud, money-laundering, compliance, and corporate governance. Tanya is a Certified Fraud Examiner, a Certified Anti-Money Laundering Specialist, and a licensed private investigator. She has served on the National Cannabis Industry Association's Banking & Financial Services Committee and the State Regulations Committee. Tanya received a Bachelor of Arts degree from Swarthmore College and a Master of International Business degree from the Fletcher School at Tufts University, where she serves on the MIB Alumni Advisory Board.</p>
Brad Rowe, Director of Compliance, Operations and Regulations Analyst of Rowe Policy Media
Brad Rowe, Director of Compliance, Operations and Regulations Analyst of Rowe Policy Media<p>Brad has designed, implemented and delivered a dozen public policy research projects over the last six years through his time running BOTEC Analysis, at UCLA and with Avenu/MuniServices Cannabis Compliance and Support Services and Rowe Policy + Media. Brad is Lecturer of Public Policy at UCLA Luskin School of Public Affairs and recently started teaching Cannabis Policy and Society, the first of its kind in the country. </p><p>He serves as Advisor to the UCLA Cannabis Research Initiative, coordinating the Criminal and JuvenileJustice Research team and the California Cannabis Data Collection Project. He sat on the CommunityAdvisory Committee for the Los Angeles County Department of Health's impact assessment on cannabis. </p><p>In 2020 Brad has taken on the cannabis "dosing problem". To help naive and legacy consumers dose new cannabis products predictably and reliably. The HowHi App Data Project provides evidence based insights into the Quality, Duration and Amplitude of the cannabis experience. The variables are crowd-sourced via experiential self-reports on iOS and Android interfaces. </p>
Andrew Freedman, Senior Vice President at Forbes Tate Partners
Andrew Freedman, Senior Vice President at Forbes Tate Partners<p>Andrew brings vast experience from his three years as the State of Colorado's first Director of Cannabis Coordination. During this time, he developed distinctive experience effectively implementing voter-mandated legalized adult-use and medical cannabis while protecting public health, maintaining public safety, and keeping cannabis out of the hands of children.<br><br>Andrew's role in developing a successful operating model for cannabis regulation and stakeholder collaboration was identified as one of the reasons for the State of Colorado's success in implementing adult-use cannabis legalization by the Brookings Institution. Governor Hickenlooper has gone so far as to praise Andrew's work while on national television, stating, "Andrew Freedman, who came in and helped us once it was passed . . . [has] done a remarkable job of creating a regulatory framework."<br><br>Andrew has received national recognition for his leadership. Men's Health Magazine named him one of the 30 most influential health influencers of the last 30 years. He was recognized as one of Fast Company's "100 Most Creative People in Business" in 2016. He has been featured on 60 Minutes, NBC Nightly News, The Today Show, The New York Times, The Washington Post, The Wall Street Journal, The Boston Globe, Governing Magazine, and dozens of local stories throughout the nation and internationally.</p>
Tami Abdollah, Senior Reporter at dot.LA
Tami Abdollah, Senior Reporter at dot.LA<p>Tami Abdollah is dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer.</p>
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