Photo by Sean Pavone/ Shutterstock
Meet the Startups Joining the Long Beach Accelerator's New Cohort
Long Beach has a long history of innovation. It’s one of the densest aerospace hubs on the West Coast. There’s a vital port there, and the city is home to several tech industries—including health care, space tech and cybersecurity. That, along with its colleges and universities, have made Long Beach an enticing destination for entrepreneurs.
It’s within this environment that the Long Beach Accelerator sprouted in 2019 and has grown since. To date, the accelerator has cycled 20 companies through its four-month program, helping them raise a total of over $12 million.
On July 5, the program will welcome its fourth cohort of startups from around the world, participating in a hybrid combo of virtual and in-person sessions. Each cohort includes between five to 10 companies.
Long Beach, along with Cal State University, Long Beach’s Institute for Innovation and Entrepreneurship and capital provider Sunstone Management, are all partners in this public-private model of startup investment. The accelerator itself operates as a nonprofit.
Long Beach Accelerator Managing Director Andrea White-Kjoss
The city provides help with some funding, covering the costs for some low- to moderate income Long Beach-based founders whose companies are accepted into the accelerator.
The organization's partnership with CSULB enables it to help founders move from idea stage to execution at the institute, and then advance to business growth via the accelerator.
Sunstone Management, a private capital management and investment firm, provides funding for the incoming cohorts. The firm's venture capital fund typically invests $100,000 in the startups as soon as they join the accelerator and takes a 6% equity stake in return.
Sunstone had also been providing some follow-on funding on a case-by-case basis. It upped the ante earlier this year by promising an additional $500,000 to current cohort and alumni.
“It's a model that brings enormous resources to the table for our portfolio companies, as well as for economic development, acting as a growth engine for the region,” managing director Andrea White-Kjoss told dot.LA.
A serial entrepreneur who has served as CFO at several companies, White-Kjoss came aboard as the founding managing director in July 2020. Before that, she co-founded seed-stage funding platform ExtraVallis, based in Rancho Santa Fe, and founded Mobis Transportation, which was the product of a public-private partnership with the city of Long Beach.
She also happens to be a 17-year resident of the city.
“So I know intimately how attractive this city is to tech entrepreneurs, from the high-tech industries, to the culture and lifestyle, to the world-class workforce and institutions,” she said. “When you bring all of that together...the opportunity to build a tech accelerator, and more than that really, a tech ecosystem here in Long Beach, was natural and irresistible.”
The accelerator was originally intended to be in-person, but quickly had to pivot to remote sessions during the pandemic. It remains virtual, for the most part, “which has turned out to be a huge source of strength,” White-Kjoss said.
That’s because the founders come from all over the world. There’s no geographic restrictions on who’s accepted and no need to burden founders with moving to Long Beach to participate.
White-Kjoss said the move has fostered diversity, and enabled the accelerator to draw on an international network of mentors, instructors, advisors and investors.
They—along with the accelerator’s staff of three facilitators — get to know the companies and their founders “deeply” and provide individualized assistance, including building strategic partnerships with potential customers and/or marketing partners.
There is still an in-person aspect to the accelerator. All cohort founders fly into Long Beach for about two weeks during the program. While there, they attend in-person workshops and networking events. They also participate in a Demo Day, with investors present. This helps the companies get additional seed funding for continued growth once they graduate.
So far, five graduating startups have received acquisition offers—but none have taken them.
White-Kjoss said that’s because those founders “felt they had much further to take their companies, at least in some degree, due to the empowerment of the tools, resources and networks provided by the accelerator.”
Bump's Success
One success is Los Angeles-based Bump. Since graduating from the Long Beach Accelerator, Bump has raised more than $5 million, co-founder and CEO James Jones told dot.LA.
It’s currently participating in another accelerator, Snap’s in-house Yellow Accelerator, which is now a co-lead investor in Bump, along with Sunstone.
The company is working on an AI-fueled fintech platform for the creator economy, which hasn’t yet launched. It would help creators track revenue from multiple sources, monitor expenses, access credit and manage their crypto and non-fungible tokens (NFTs).
The company has started a waitlist, for access to its credit and financial management tools. Once the services are available users would pay about $400 per year.
The company also plans to integrate micro-advances into its platform, designed to enable creators to stay in full control of their finances and keep 100% of the rights to their work.
Jones said that participating in the Long Beach Accelerator’s very first cohort was a “great springboard” for the company.
Specifically, sessions on customer personas and discovering addressable markets, as well as mentor meetings were “invaluable,” he added.
Meet the Startups In the Long Beach Accelerator's Latest Cohort:
Apsy: Creating the first true fully AI platform to build affordable elegant custom apps.
Crumbraise, Inc.: Fundraising made easy for creators, clubs & causes.
Educational Vision Technologies, Inc.: Automated video editing and content curation using A.I. to make online learning accessible, efficient and engaging.
Gift Pass App Inc.: Streamlining experiences around digital gifting & payments.
The Girls Co LLC: We are a women's health company that is currently focused on a solution to alleviate period cramp pain.
Intellitech Spa Inc.: Intellitech is a realtime telematics, predictive maintenance and driver behavior monitoring platform.
Kwema: Kwema provides an easy to scale Smart Badge Reel Duress Service that reduces incident response time without escalating the situation.
Pathloom, Inc.: Outdoor trip planning made easy!
Rotender: The world's fastest and most reliable bar.
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The Reums are making what they describe as a "meaningful" contribution to a multimillion dollar fund called Mint 10. They view it as a way to diversify their holdings away from illiquid shares in startups that won't pay off for years – if they're lucky – and equities, which they see as overvalued.
"I see this as a great alternative class, somewhere closer to a stock, albeit a little less liquid but more so than my venture and private equity stuff," said Courtney Reum. "To me, there's not much to find in the stock market that's a good deal."
A study last year showed baseball cards had a far superior return to stocks over the previous decade. The pandemic has triggered a frenzy in the card market, with huge spikes in trading and new records for coveted NBA rookie cards fetching more than a million dollars apiece.
The Reum brothers founded their Santa Monica-based early-stage consumer technology venture firm, M13, in 2016, after they sold their spirits business, Veev, for a hefty multiple to a St. Louis beverage conglomerate. M13 is now deploying its $175 million second fund backed by Virgin Group founder Richard Branson.
Reum thinks the still stodgy card industry is ripe for a shake up, eyeing big potential in influencers and creating content around the practice of "case breaking," the act of opening card boxes, which can draw big audiences on streaming platforms.
Reum, who remembers his mother driving him to card shows when he was 14 years old, views trading cards as similar to art, sports teams, Bitcoin or gold, which he's "bought a bunch of lately." What do all those assets have in common? There's a finite supply, which Reum believes inevitably drives the price up over time.
"I generally believe that something like gold or baseball cards, depending who you are, could be a couple percent of your allocation, up to like 10 percent," Reum said. "I think this is just as viable as gold or bitcoin or any of that."
Mint 10 will hedge its bets by buying a mix of cards from the three major sports that are both old and new.
"It's no different than how a long/short fund does their allocations," Reum said. "We have LP [limited partner] interest coming out of our ears."
Reum would not specify how large the fund will be or what his and brother's contribution is, owing to the fact that they are still fundraising. "It will be a multi-million dollar fund but we haven't finalized the amount yet," he explained. "We have a lot of interest but we want the strategy to dictate the raise vs the inverse, which is sometimes the case."
Courtney and Carter Reum are devoting some of their attention and dollars to Mint 10, an investment fund focused on trading cards.
The Reums are not alone in their newfound enthusiasm for trading cards. Just as people bored at home with extra cash in their pockets drove a wave of day trading, card sales have been on a tear during the pandemic.
During the first few months of the coronavirus outbreak, sales of basketball cards on eBay spiked more than 130%. Baseball cards saw a 50% spike while football cards had a 47% increase.
In July, a LeBron James rookie card shattered the record for a modern day NBA card, going for $1.8 million. But the record stood for only a few months as last month a card of Milwaukee Bucks forward Giannis Antetokounmpo fetched $1.812 million. (The card previously sold for $7,000 on eBay, but the buyer reportedly returned it because of a yellow stain.)
"I think you're going to see sales records over the next 12 to 16 months that shock the world," said Scott Keeney, a DJ, entrepreneur, and trading card expert who the Reums brought in to run the new fund. "I've seen more VC activity in the last four-to-six weeks around the card space than I would have ever dreamed."
Keeney compares Mint 10 to funds trading fine art, but he sees a much bigger upside in cards because of people like Reum, who have traded them since they were kids.
"This generation who grew up in the Junk Wax Era now has disposable income to spend," Keeney said. "Would they rather spend all this money on a piece of art that hangs on the wall that they might not be that tied to? Or do they want to own Magic Johnson's rookie card if they're a Lakers fan?"
Though most trading is done online these days, Keeney, along with fellow DJ, Steve Aoki, opened a brick and mortar card card shop last month in Hollywood, Cards and Coffee, featuring over $2 million worth of inventory.
With a widely accepted grading system and limited supply, the trading card market has come a long way from the scandals that scared away collectors in the 20th century. But the industry still has problems. Last year, the FBI launched a criminal investigation into the world of baseball card collecting that included the largest seller of cards on eBay.
"This doesn't sour us on the market one bit," Reum said. We are obviously aware of this process of attempting to cheat the system, and are diligent in research to avoid this scenario. However, we actually are glad this incident came to light and was taken seriously by the FBI."
The Card Reum Will Never Sell
On a recent Zoom video call conducted just after he had returned from a business trip to Austin, Reum excused himself and said there was something he wanted to show. He darted off screen and returned holding up a framed oversized 1985 Michael Jordan Interlake card.
He pointed to the bottom right hand corner where the words "Interlake Youth Incentive Program" were printed in small lettering. The card holds a great deal of significance for Reum because his father, W. Robert Reum, was an executive at The Interlake Corporation before becoming president and CEO in 1990.
The company signed on as a corporate sponsor of the Bulls in 1984. As someone who now spends a lot of time thinking about how consumer-focused startups should market themselves, the move still baffles him.
"Given they were a B2B diversified industrials company, whomever was running their marketing probably should have been fired for such a sponsorship," Reum laughs. "The Bulls were the worst team in the league, there was no internet for people to discover the company, and it was hard to see how the sponsorship would help sales of Interlake products. However, the sponsorship did come with eight floor seats. The year following the deal, the Bulls drafted Michael Jordan and the rest is history."
W. Robert Reum died two years ago at the age of 74 from complications from cancer and Reum has a hard time not getting choked up looking at the card.
"To me, it is a really personal way to honor my dad," he said.
The card is worth around $20,000 and could soar in value to half a million dollars if it is seen as Jordan's rookie card, according to Keeney. But this is one card Reum will never sell. He wants to acquire more of them.
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