Here Are the LA Seed Startups Top VCs Wish They'd Invested In

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. 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.

Here Are the LA Seed Startups Top VCs Wish They'd Invested In

Los Angeles is home to around 5,000 startups, the majority of which are in their young, formative years.

Which of those thousands are poised for a breakout in 2021? We asked dozens of L.A.'s top VCs to weigh in. We wanted to know which companies they would have invested in if they could go back and do it all over again.

Yesterday, our investors picked their favorite Series-A or later startups, and not surprisingly there was more consensus, with familiar names like PopShop Live and Scopely leading the way.

But the most lucrative returns come from identifying companies in their infancy, as recent blockbuster IPOs vividly demonstrate. For instance, Sequoia's $600,000 seed check to Airbnb in 2009 accounted for 70% of its shares in the company and helped it get into competitive later rounds. When the vacation rental service went public last month, Sequoia's stake was worth $4.8 billion.

What will be the next breakout? The complete list is below and is ranked in random order except for the first three, which stood out by virtue of getting multiple votes: Pipe enables companies with recurring revenues to tap into their deferred cash flows with an instant cash advance. Clash App, Inc., is a TikTok alternative launched by a former employee of the social network in August. And XCLAIM allows bankruptcy claims to be digitally traded.

Boiling

Pipe

Pipe provides financial services to help cloud service companies tap into their deferred cash flows, allowing them to continue growing without taking on debt or giving up ownership. For subscription-based businesses, this makes it "as if all of your customers converted to annual plans overnight," according to the company.

Founded by Harry Hurst, Josh Mangel and Zain Allarakhia, the company raised $66 million of seed funding earlier this year in a deal led by Craft Ventures and Fin Venture Capital.

Clash App Inc.

Created by former Vine-r Brendon McNerney and entrepreneur and marketing expert P.J. Leimgruber, Clash App is a short form video platform similar to TikTok, but without built-in sound libraries. It's geared toward empowering creators with innovative monetization options and inclusive communities.

XCLAIM

XCLAIM has created an electronic platform where bankruptcy claims that take a notoriously long time to process can be digitally traded. Founded in 2018 by Matthew Sedigh, who has operated in the corporate restructuring field for more than a decade, the company says "rather than wait years for the bankruptcy court process to issue payment distributions, creditors can now access immediate liquidity by selling their claim to interested buyers." Earlier this year, it raised a $4 million seed round led from Luma Launch, First Round Capital and Freestyle Capital.

Simmering

Freck Beauty

Freck Beauty manufactures beauty products intended to make the user feel seen. Remi Brixton, the company's chief executive officer, founded the startup in 2015 when she was in search of a freckle makeup product. When she couldn't find one, she launched her own, the FRECK OG. The East Los Angeles-based company raised an undisclosed amount of seed funding in a deal led by KarpReilly and Stage 1 Fund earlier this year.

The Skills

The Skills wants to be the master class on sports and life. The Los Angeles-based startup launched two months ago and offers classes from gold medal Olympians — including swimmer Michael Phelps and volleyball player Kerri Walsh Jennings — and Grand Slam tennis Champion Maria Sharapova. In December, it closed a $5 million seed round backed by Boston-based Will Ventures, Global Founders Capital, 8VC, Maveron, Hack VC and Correlation VC.

Mapped

Founded by Shaun Cooley, former chief technology officer of Cisco's Internet-of-Things (IoT) and Industries division, Mapped provides IoT services in El Segundo.

The company raised $3 million of seed funding in a deal led by Greycroft earlier this year, putting its pre-money valuation at $9 million.

DataPlor

Created in 2016 by Geoffrey Michener, Dataplor indexes micro-businesses in Mexico (and will soon be expanding to other countries in Central and South America) and sells the data to larger companies.The company relies on contractors in those countries to collect the information from local businesses. It raised $4 million from ff Venture Capital, Quest Venture Partners and Space Capital earlier this year and expects to use it to expand into more Latin American countries.

Grow Credit

Launched by serial entrepreneur Joe Bayen, Grow Credit helps customers improve their credit score by providing credit for subscription services like Netflix and Spotify. Their MasterCard can help consumers with thin or damaged credit scores and the small line of credit can be upgraded for a fee. The company closed a $2 million seed round earlier this year with participation from Mucker Labs.

Outer

The two-year-old Santa Monica-based company has seen business boom during the pandemic as retail stores shut down and online orders surged. The direct-to-consumer outdoor furniture brand uses backyards as showrooms and raised $4.3 million in a seed round earlier this year led by Mucker Capital. Founded by Jake Liu and Terry Lin, a former designer at Pottery Barn, Outer aims to appeal to Restoration Hardware and Pottery Barn shoppers.

WhatNot

A livestreaming reseller of collectibles like FunkoPop vinyl figurines, Pokémon cards and sports cards, WhatNot taps into a growing retail trend and promises that the collectibles are verified, much like sneaker reseller GOAT.

The startup secured $4 million in seed funding this month from Scribble Ventures, Wonder Ventures, Operator Partners, Y Combinator, Liquid 2 Ventures, Twenty Two Ventures and other investors. The company plans to use the funds to expand into video games, comics books, designer toys and vintage fashion.

Fourthwall

Fourthwall is the developer of an internet platform that helps content creators launch fully-branded websites focused on interacting with fans. Their website tag phrase is "Make a living doing what you love," which is complemented by their model, which provides creators 100% ownership of their website and brand.

Founded by Walker Williams and Will Baumann, the company has raised $4 million to date, from investors Defy Partners, Lightspeed Venture Partners and Initialized Capital Management.

Shop LatinX

Shop LatinX calls itself the "leading beauty, fashion, and lifestyle ecommerce designed by and made for Latinas." The brainchild of two Los-Angeles-based Latinas, Brittany Chavez and Raquel Garcia launched their website before Black Friday in 2016. It features more than 200 brands.

First Resonance

Founded by former SpaceX software engineer Karan Talati and Neal Sarraf, First Resonance promises to ease the workflow for manufactures with software intended to provide greater visibility into production and test product development lifecycle. The company raised $1.75 million of seed funding last year from Wavemaker Partners, Stage Venture Partners and PLG Ventures, among clothes.

Vurbl

Vurbl offers curated, one-stop-shop of what it calls the best audio on the internet, which can include podcasts but also goes well beyond that from religious sermons to court arguments. The new platform founded by CEO Audra Gold is being built with the $1.3 million pre-seed round Vurbl closed in September led by AlphaEdison with participation from Halogen Ventures and Ten13.

PocketWatch

Former Disney executive Chris Williams founded the studio that produces family-focused content from YouTube stars. This year it launched clock.work, an advertising agency designed to help major brands reach kids. Investors include Viacom, Greycroft, Third Wave Digital and United Talent Agency, along with strategic angels including Robert Downey Jr. and Jon Landau.

PocketList

The app allows renters to see and share apartments that will soon be available before they're listed — reducing the time properties sit vacant and potentially heating up competition among apartment hunters. It launched earlier this year. The company has $2.8 million in seed funding led by David Sacks' Craft Ventures along with Abstract VC, Wonder Ventures and angel investor Spencer Rascoff, co-founder of Zillow and dot.LA.

Quilt

The audio-based social platform promises to be the spot for "live, supportive, feel good conversations—just like hopping on the phone with a friend when you need it most." It lets people start a conversation around any topic or join by listening. Quilt raised an undisclosed amount of venture funding from Freestyle Capital in 2019.

Tonebase

Founded by Abhi Nayar, Chris Garwood and Igor Licthmann, Tonebase provides high-level music education online. Yale School of Music alumnus Garwood and Lichtman told their alma mater that it built with the idea that it was "a way for people everywhere to learn from the very best musicians around the world — individuals who, due to their busy performing and teaching careers, are traditionally accessible to only a select few." The company has raised an undisclosed amount from Launch fund, e.ventures and other undisclosed last May.

Second Spectrum

Launched in 2013 by Jeff Su, Yu-Han Chang and Rajiv Maheswaran, Second Spectrum already has deals with the NBA and English Premier League. This year it scored another one with Major League Soccer to use its optical tracking system to evaluate and analyze performance.

Second Spectrum puts their tracking cameras inside the stadium. Machine learning and AI-powered analytics provide detailed data that helps coaches and others better understand the game from player speed and deceleration to shot velocity in near real time. That technology can also be used on broadcast platforms to give fans more insight. The company raised about $20 million backed by CAA Ventures, Raine Ventures and The Chernin Group in 2018.

Toucan

Founded by CEO Taylor Nieman, Shaun Merritt and Brandon Dietz, Toucan is a Chrome browser extension that lets people learn a new language. It scans websites you visit and translates some words into the language you want to learn. The Santa Monica-based company most recently raised a $3 million round backed by GSV Ventures, Amplifyher Ventures, and Wonder Ventures, among others.

Serve Automation

Created by former SpaceX engineers, Serve Automation aims to change the way foods get delivered. It has secured $7 million in a seed round and is operating in stealth mode.

Lead art by Candice Navi.

From Your Site Articles

Subscribe to our newsletter to catch every headline.

newsletter

'Open Letter' Proposing 6-Month AI Moratorium Continues to Muddy the Waters Around the Technology

Lon Harris

Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.

'Open Letter' Proposing 6-Month AI Moratorium Continues to Muddy the Waters Around the Technology

Evan Xie

AI continues to dominate the news – not just within the world of technology, but mainstream news sources at this point – and the stories have entered a by-now familiar cycle. A wave of exciting new developments, releases and viral apps is followed by a flood of alarm bells and concerned op-eds, wondering out loud whether or not things are moving too fast for humanity’s own good.

With OpenAI and Microsoft’s GPT-4 arriving a few weeks ago to massive enthusiasm, we were overdue for our next hit of jaded cynicism, warning about the potentially dire impact of intuitive chatbots and text-to-image generators.

Sure enough, this week, more than 1,000 signatories released an open letter calling for all AI labs to pause training any new systems more powerful than GPT-4 for six months.

What does the letter say?

The letter calls out a number of familiar concerns for anyone who has been reading up on AI development this past year. On the most immediate and practical level, it cautions that chatbots and automated text generators could potentially eliminate vast swathes of jobs previously filled by humans, while “flood[ing] our information channels with propaganda and untruth.” The letter then continues into full apocalypse mode, warning that “nonhuman minds” could eventually render us obsolete and dominate us, risking “loss of control of our civilization.”

The six-month break, the signatories argue, could be used to jointly develop shared safety protocols around AI design to ensure that they remain “safe beyond a reasonable doubt.” They also suggest that AI developers work in collaboration with policymakers and politicians to develop new laws and regulations around AI and AI research.

The letter was signed by several AI developers and experts, along with tech industry royalty like Elon Musk and Steve Wozniak. TechCrunch does point out that no one from inside OpenAI seems to have signed it, nor Anthropic, a group of former OpenAI developers who left to design their own “safer” chatbots. OpenAI CEO Sam Altman did speak to the Wall Street Journal this week in reference to the letter, noting that the company has not yet started work on GPT-5 and that time for safety tests has always been built into their development process. He referred to the letter’s overall message as “preaching to the choir.”

Critics of the letter

The call for an AI ban was not without critics, though. Journalist and investor Ben Parr noted that the vague language makes it functionally meaningless, without any kind of metrics to gauge how “powerful” an AI system has become or suggestions for how to enforce a global AI ban. He also notes that some signatories, including Musk, are OpenAI and ChatGPT competitors, potentially giving them a personal stake in this fight beyond just concern for the future of civilization. Others, like NBC News reporter Ben Collins, suggested that the dire AI warnings could be a form of dystopian marketing.

On Twitter, entrepreneur Chris Pirillo noted that “the genie is already out of the bottle” in terms of AI development, while physicist and author David Deutsch called out the letter for confusing today’s AI apps with the Artificial General Intelligence (AGI) systems still only seen in sci-fi films and TV shows.

Legitimate red flags

Obviously, the letter speaks to relatively universal concerns. It’s easy to imagine why writers would be concerned by, say, BuzzFeed now using AI to write entire articles and not just quizzes. (The website isn’t even using professional writers to collaborate with and copy-edit the software anymore. The new humans helping out “Buzzy the Robot” to compose its articles are non-editorial employees from the client partnership, account management, and product management teams. Hey, it’s just an “experiment,” freelancers!)

But it does once more raise some red flags about the potentially misleading ways that some in the industry and the media are discussing AI, which continues to make these kinds of high-level discussions around the technology more cumbersome and challenging.

A recent viral Twitter thread credited ChatGPT-4 with saving a dog’s life, leading to a lot of breathlessly excited coverage about how computers were already smarter than your neighborhood veterinarian. The owner entered the dog’s symptoms into the chatbot, along with copies of its blood work, and ChatGPT responded with the most common potential ailments. As it turns out, a live human doctor tested the animal for one of the bot’s suggested illnesses and accurately guessed the diagnosis. So the computer is, in a very real sense, a hero.

Still, considering what might be wrong with dogs based on their symptoms isn’t what ChatGPT does best. It’s not a medical or veterinary diagnostic tool, and it doesn’t have a database of dog ailments and treatments at the ready. It’s designed for conversations, and it’s just guessing as to what might be wrong with the animal based on the texts on which it was trained, sentences and phrases that it has seen connected in human writing in the past. In this case, the app guessed correctly, and that’s certainly good news for one special pupper. But there’s no guarantee it would get the right answer every time, or even most of the time. We’ve seen a lot of evidence that ChatGPT is perfectly willing to lie, and can’t actually tell the difference between truth and a lie.

There’s also already a perfectly solid technology that this person could have used to enter a dog’s symptoms and research potential diagnoses and treatments: Google search. A search results page also isn’t guaranteed to come up with the correct answer, but it’s as if not more reliable in this particular use case than ChatGPT-4, at least for now. A quality post on a reliable veterinary website would hopefully contain similar information to the version ChatGPT pulled together, except it would have been vetted and verified by an actual human expert.

Have we seen too many sci-fi movies?

A response published in Time by computer scientist Eliezer Yudkowsky – long considered a thought leader in the development of artificial general intelligence – argues that the open letter doesn’t go far enough. Yudkowsky suggests that we’re currently on a path toward “building a superhumanly smart AI,” which will very likely result in the death of every human being on the planet.

No, really, that’s what he says! The editorial takes some very dramatic turns that feel pulled directly from the realms of science-fiction and fantasy. At one point, he warns: “A sufficiently intelligent AI won’t stay confined to computers for long. In today’s world you can email DNA strings to laboratories that will produce proteins on demand, allowing an AI initially confined to the internet to build artificial life forms or bootstrap straight to postbiological molecular manufacturing.” This is the actual plot of the 1995 B-movie “Virtuosity,” in which an AI serial killer app (played by Russell Crowe!) designed to help train police officers grows his own biomechanical body and wreaks havoc on the physical world. Thank goodness Denzel Washington is around to stop him.

And, hey, just because AI-fueled nightmares have made their way into classic films, that doesn’t mean they can’t also happen in the real world. But it nonetheless feels like a bit of a leap to go from text-to-image generators and chatbots – no matter how impressive – to computer programs that can grow their own bodies in a lab, then use those bodies to take control of our military and government apparatus. Perhaps there’s a direct line between the experiments being done today and truly conscious, self-aware, thinking machines down the road. But, as Deutsch cautioned in his tweet, it’s important to remember that AI and AGI are not necessarily the exact same thing.

From Your Site Articles

AgTech Startup Leaf is Helping Farmers Brace for Unexpected Rainfall After Record Year

Samson Amore

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.

green leaf drawing and rolling farm lands

Evan Xie

At least 50,000 acres in the state of California are estimated to be underwater after a record-breaking year of rainfall. So far this year, California has received nearly 29 inches of rain, with the bulk being dumped on its central and southern coasts. Farmers are already warning that the price of dairy, tomatoes and other vegetables will rise as the weather prevents them from re-seeding their fields.

While no current technology can prevent weather disasters, Leaf Agriculture, a Los Angeles-based startup that launched in 2018, wants to help farmers better manage their properties by leveraging data.

LA’s Hottest Startups for 2023

LA TECH JOBS

View More Jobs

Trending

Terms Privacy Copyright Cookies