There aren't many venture capitalists that can say they have spent time talking leadership with a U.S. president, but Kelly Perdew can.
Perdew — who runs seed-stage firm Moonshots Capital with partner and fellow military veteran Craig Cummings — won the second season of "The Apprentice" in 2005 and went on to work with Donald Trump, who wrote the foreword to his book on leadership principles, "Take Command."
Perdew doesn't discuss much about his days with Trump, though the principles that he espoused then still guide his investments today.
"We really focus on finding extraordinary leaders," Perdew said.
Moonshots just closed its second fund; totaling at $36 million, it's aimed at early-stage tech companies and cutting larger checks. Investments average from $1.5 million to $2 million, 50% larger than Fund I.
Often, the two West Point graduates look for founding teams with military veterans or founders that have been through "the ringer." Those without perseverance and passion need not apply.
"It's so critical that this isn't an intellectual exercise for an MBA graduate that said 'oh, I looked at the marketplace and this looks like a great opportunity'," he quipped. "It has to be driven on something that's an internal drive that you're passionate about."
It turns out that it's often "nontraditional founders" that fit that mold. Perdew pointed out that 36% of the companies in his last fund were led by a Black or LatinX founder, 21% by a woman founder, and 36% by a military veteran founder.
And, he said, of the 14 companies in the first fund launched in 2017, all but one are still around. The firm has even notched an exit when ReliaQuest acquired Threatcare — run by Navy veteran Marcus Carey — for an undisclosed amount in 2019.
While the two don't focus on a singular sectors, the firm tends to invest in fintech, consumer internet, artificial intelligence and augmented reality.
Nearly half of all its investments are in California, with about a third in Southern California. That's where Perdew has been writing checks for nearly two decades — first as an angel investor, then as a leader of syndicates or pools of angel investors, who put money in Slack and Robinhood, among other companies. He was an early-stage angel investor in LinkedIn and Pandora.
Perdew said it's no coincidence that many of the startups the firm now invests in are near Marina Del Rey — where he operates — or close to Austin, Texas, where his partner does. He calls it the "gravitational force."
"We joke a little bit that you know, you're actually marrying founders, when you put money into them in the early stages because it takes, you know, 10-plus years to get to what is typically an exit," he said.
Editor's note: dot.LA co-founder Spencer Rascoff is also a limited partner in Moonshots Capital.
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When Matt Kozlov, TechStars Los Angeles' Managing Director, evaluates startups, he looks for a few key qualities in a company's leadership: humility, passion, resilience and the ability to accept coaching well.
"We believe that an A-plus team can turn a C-minus product into a really successful venture," he said. But the inverse, he said, isn't always true.
The 12 companies chosen for TechStars LA's 2021 Accelerator includes a social network platform for traders, a startup making a wristband that detects strokes and an app to handle small claims court cases.
Kozlov, who took the helm in February, is also taking his inaugural TechStars Los Angeles class in-person after the accelerator went remote during the pandemic.
"Nothing is better than an in-person experience for the mentors and founders," he said. "We are planning this year to bring the best of both worlds."
Kolzov, who spent the last two years working from home with "little" human interaction, is looking forward to swapping ideas across a table. TechStars LA is also in for other changes. The class will be held at an office space in Culver City, where most of the mentorships and instruction will take place.
But with LA County's new mask rules and an unpredictable virus, he's braced for the prospect of returning restrictions if COVID-19 cases rise.
"We've done it before, and we have to, we'll do it again," Kozlov said.
Kozlov said making sure the startups are racial diversity was a major area of focus for the accelerator. Many of the companies are led by Latino, Black and Asian American founders, and a majority of the businesses have women in their leadership.
"In terms of diversity, we really set that as a requirement when constructing this cohort," Kozlov said. "We wanted to make sure that the community of TechStars that we're bringing into this portfolio represents the community of LA."
Chelsie Hall, the co-founder of ViralMoment, said she's looking forward to collaborating with other startups and has already benefited from TechStars' network.
"The program hasn't even started yet, and they've already connected us to people who are just absolute experts in the space," said Hall, whose company helps brands identify internet trends.
The TechStars LA Accelerator's 2021 class will receive three months of training mentoring. Each company will receive $20,000 in exchange for 6% equity in the company, as per TechStars' usual accelerator agreements.
Here's a preview of this year's class:
Born out of Yale University, Alva Health wants to help people identify strokes sooner with a wristband that helps detect "the silent killer." Strokes are among the top leading causes of death worldwide. Detecting a stroke early is often a key way to improve survival rates and reduce side-effects for stroke victims.
"It's kind of a problem that has not been solved," said Sandra Saldana, CEO and co-founder of the Houston and New Haven based startup.
Butterfly Labs wants to make at-home lab testing easier for telehealth companies.
Based out of Los Angeles, Butterfly's software provides telehealth companies access to labs, testing and results that can be shared with patients via their portal and mailing services. So far, they have partnered with 10 labs to offer blood and other tests.
Cheres is a social network for stock tracking.
The platform allows users to see what their friends and followers are investing in. The app has pre launched and already has thousands on its waitlist, according to the company.
Co-founder Cimeran Kapur co-founded Communikind, an app that lets families track their health history and health data, after finding out she had cancer while in medical school. Available on both the IOS and the Google Play Store, the app also lets users share data with physicians.
Kapur created the app to give patients more control over their medical histories.
Led by Shilo Johnson, a former accountant, ComplYant sells software that helps businesses keep track of tax deadlines, bills and other paperwork.
Erdos Ventures buys small e-commerce businesses. Based out of Canada, Erdos generates an offer within 14 days and lets owners choose between fully selling the company or sharing profits.
Based out of India, Eunimart offers machine learning and AI-based tools to help companies manage their businesses across major ecommerce platforms, including Shopify and Amazon.
The company primarily operates in Asia and the Middle East and is aiming to expand into the U.S.
Lightbox wants to combine the online and in-person shopping experience. The company's main product is a smart, 43-inch touchscreen that connects in-store shoppers with their online accounts.
Co-founder Sumant Yerramilly is no stranger to the program; he went through Techstars Boston in 2009, where he worked on Amp Idea, a company that designed an interactive touchscreen for taxis. The company was later acquired by Verifone Transportation.
PeopleClerk is an app that lets customers prepare small claims lawsuits and file the correct paperwork online. It operates in all 58 California counties and is hoping to expand into other states.
PeopleClerk co-founder and attorney Camila Lopez said it takes 30 to 40 hours and multiple court visits just to navigate the court system, which is often exacerbated by filing the wrong paperwork or missing a step in the process.
"If you watch a small claims hearing, you will see that people are showing up with evidence everywhere," Lopez said. "It's kind of a mess, and you're leaving money on the table."
Renno is an online business that aims to streamline the home renovation process. Led by former real estate consultant and CEO Khalief Brown, the company's app lets customers design a renovation, get pricing quotes and find contractors.
SanityDesk is a software aimed at "solo-preneurs" and small businesses. The software helps businesses improve their web presence, marketing strategy and customer relations management.
ViralMoment wants to make it easier for companies to better understand what's trending on the internet so it can make its own "viral moment."
The company uses Artificial Intelligence to generate reports on what people are saying about a company online based on images, videos and memes posted online.
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This week on the L.A. Venture podcast, hear from Mike Jones, the founder and CEO of studio and venture firm Science Inc. Jones is considered an expert on scaling and robust business strategy. He runs Science Inc. with Peter Pham, Greg Gilman and Tom Dare.
Starting in the late 90s, Jones began creating and managing his own businesses. He created UserPlane, an instant messaging service that was acquired by AOL early in his career. Following that, he was the turnaround CEO of MySpace— helping the company navigate losing its legacy status — and has invested in a number of notable brands, including GoodReads, Maker Studios Inc., HelloSociety and DogVacay.
Science is often considered an incubator. It was also the first investor in Dollar Shave Club and has also helped scale Mammoth Media, Arrive Outdoors, pray.com, Liquid Death and PlayVS. Jones has also been named one of the most influential people in Los Angeles.
Science has a venture funding studio, a blockchain fund and a late-stage SPAC. The company is best known for its venture arm, which is investing out of its $100 million Fund III.
Jones also works with these companies as an advisor. He says it's important to him that the founders he invests in are willing to learn and be highly adaptable to new strategies.
His background at MySpace, he says, gives him a unique perspective on the future of social media. He says he has respect for Snap founder Evan Spiegel, but adds he thinks social media needs to be more empathetic.
"in a world where when you and I meet up in person, we have millions of micro expressions on how we're communicating with each other," he says, "like pheromones, and all the other components that go into two people standing next to each other and actually having a conversation. We have to rebuild that digitally."
This is why he argues that founders' intent and message are so important.
"The thesis of an authentic brand is 'I make this product because I believe it's the right thing to do. And it has a purpose'," he says, beyond profit.
Mike offers his insights on investing, the 2020 ecommerce boom, the future of NFTs and his passion for cyrptocurrency.
"One thing that's 100% true is I've never seen retention correct itself. If you need to change retention substantially, you need to make substantial changes to the business." — Mike Jones
dot.LA Engagement Intern Colleen Tufts contributed to this post.
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