SoCal Venture Pipeline's Plans to Match Less-Connected Startups with Series A Funds

Francesca Billington

Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

SoCal Venture Pipeline's Plans to Match Less-Connected Startups with Series A Funds
Photo by Matt Howard on Unsplash

Since founding StarNews Mobile, a video platform for content creators in Africa, Guy Kamgaing has landed deals with telecommunications giants to distribute content to subscribers across the Ivory Coast, Cameroon, Congo, South Africa and Nigeria.


The CEO has already raised $2.4 million from seed investors. But as the Santa Monica-based company expands its footprint, Kamgaing is ready for more.

"We're kind of a weird animal," he said. "We're here in Santa Monica, but yet we're tackling an opportunity on the other side of the world. A lot of people have a hard time wrapping their head around what we're doing."

As he goes after a Series A, Kamgaing is testing out a new path to securing capital — a nascent program called the SoCal Venture Pipeline, which is hoping to make an imprint on Southern California startups.

Together, the Alliance for SoCal Innovation and Silicon Valley Bank (SVB) are tapping brands like StarNews Mobile and Shine Bathroom Technologies to join their network of founders and investors. The Pipeline identifies companies seeking Series A funding and connects them with the right VCs. They expect to add two to three companies each month and hit about 20 after their first year.

The goal, SVB's Head of VC Relationships Rob Freelen said, is to "uncover companies that might be in smaller, lesser known parts of the Southern California region."

That means scouting out founders across L.A., Santa Barbara, Ventura, Orange and Riverside counties.

"Entrepreneurship is everywhere, but funding is not," said Andy Wilson, the Alliance's executive director, in a statement.

For early-stage startups, the road from seed round to Series A can be a long one. That's because there's less at stake during seed rounds and investors tend to be more selective during Series A funding in part because more money is usually at stake. Between 2017 and 2020, venture firms made about a third fewer Series A deals in Southern California than seed funding deals, according to a review of Pitchbook data.

The Pipeline hopes that 20% to 30% of the startups will find funding three to nine months after the companies are selected for the program. SVB's direct investment fund might be one of them — but that's not guaranteed.

The program is looking for companies that have the right metrics.

"Series A investment requires that you have traction in terms of revenue and customers," said Eric Eide, the program's lead. "You need to show that you've got a business and you have it out in the market and it's working."

Of the over 40 startups that the Pipeline reviewed, only two made the cut.

The program, bankrolled by the Silicon Valley Bank and the law firms Wilson Sonsini Goodrich & Rosati and KPPB LLP, is free for participating companies. There's also no guarantee for the selected companies that they will get funded. Firms will do their own due diligence before making funding decisions.

The concept was modeled after Connect, a similar program in San Diego that has generated $650 million in Series A funding for startups since 2015.

Given the size of the Southern California region, Eide expects challenges when it comes to finding the right fit for companies from around the region. But he's hoping the program makes it easier for both investors looking for the right businesses and founders looking for funding, and is hopeful the model could scale outside of Southern California.

"I don't know of anything that's been tried [at] this scope," he said. "So, there is going to be a period of building."

The pipeline has so far begun accepting applications from companies in Pasadena, Ventura and Santa Barbara, and is planning to expand into Riverside and Orange County by the fall.

For Kamgaing, the program hasn't been useful just yet. But he's still hoping to make the most out of it, so he can focus on his work.

"It's extremely valuable if you don't know anybody – if you are a second or third-time entrepreneur and you've raised money in the past, you don't need them," he said. "For somebody who is very operational, very into the daily grind and doesn't have a whole lot of time and energy to dedicate to fundraising, it's perfect."

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How the 'Thrift Haul' Boosted Secondhand Ecommerce Platforms

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
How the 'Thrift Haul' Boosted Secondhand Ecommerce Platforms
Evan Xie

If you can believe it, it’s been more than a decade since rapper Macklemore extolled the virtues of thrift shopping in a viral music video. But while scouring the ranks of vintage clothing stores looking for the ultimate come-up may have waned in popularity since 2012, the online version of this activity is apparently thriving.

According to a new trend story from CNBC, interest in “reselling” platforms like Etsy-owned Depop and Poshmark has exploded in the years since the start of the COVID-19 pandemic and lockdown. In an article that spends a frankly surprising amount of time focused on sellers receiving death threats before concluding that they’re “not the norm,” the network cites the usual belt-tightening ecommerce suspects – housebound individuals doing more of their shopping online coupled with inflation woes and recession fears – as the causes behind the uptick.

As for data, there’s a survey from Depop themselves, finding that 53% of respondents in the UK are more inclined to shop secondhand as living costs continue to rise. Additional research from Advance Market Analytics confirms the trend, citing not just increased demand for cheap clothes but the pressing need for a sustainable alternative to recycling clothing materials at its core.

The major popularity of “thrift haul” videos across social media platforms like YouTube and TikTok has also boosted the visibility of vintage clothes shopping and hunting for buried treasures. Teenage TikToker Jacklyn Wells scores millions of views on her thrift haul videos, only to get routinely mass-accused of greed for ratching up the Depop resell prices for her coolest finds and discoveries. Nonetheless, viral clips like Wells’ have helped to embed secondhand shopping apps more generally within online fashion culture. Fashion and beauty magazine Hunger now features a regular list of the hottest items on the re-sale market, with a focus on how to use them to recreate hot runway looks.

As with a lot of consumer and technology trends, the sudden surge of interest in second-hand clothing retailers was only partly organic. According to The Drum, ecommerce apps Vinted, eBay, and Depop have collectively spent around $120 million on advertising throughout the last few years, promoting the recent vintage shopping boom and helping to normalize second-hand shopping. This includes conventional advertising, of course, but also deals with online influencers to post content like “thrift haul” videos, along with shoutouts for where to track down the best finds.

Reselling platforms have naturally responded to the increase in visibility with new features (as well as a predictable hike in transaction fees). Poshmark recently introduced livestreamed “Posh Shows” during which sellers can host auctions or provide deeper insight into their inventory. Depop, meanwhile, has introduced a “Make Offer” option to fully integrate the bartering and negotiation process into the app, rather than forcing buyers and sellers to text or Direct Message one another elsewhere. (The platform formerly had a comments section on product pages, but shut this option down after finding that it led to arguments, and wasn’t particularly helpful in making purchase decisions.)

Now that it’s clear there’s money to be made in online thrift stores, larger and more established brands and retailers are also pushing their way into the space. H&M and Target have both partnered with online thrift store ThredUp on featured collections of previously-worn clothing. A new “curated” resale collection from Tommy Hilfiger – featuring minorly damaged items that were returned to its retail stores – was developed and promoted through a partnership with Depop, which has also teamed with Kellogg’s on a line of Pop-Tarts-inspired wear. J.Crew is even bringing back its classic ‘80s Rollneck Sweater in a nod to the renewed interest in all things vintage.

Still, with any surge of popularity and visibility, there must also come an accompanying backlash. In a sharp editorial this week for Arizona University’s Daily Wildcat, thrift shopping enthusiast Luke Lawson makes the case that sites like Depop are “gentrifying fashion,” stripping communities of local thrift stores that provide a valuable public service, particularly for members of low-income communities. As well, UK tabloids are routinely filled with secondhand shopping horror stories these days, another evidence point as to their increased visibility among British consumers specifically, not to mention the general dangers of buying personal items from strangers you met over the internet.

How to Startup: Mission Acquisition

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

How to Startup: Mission Acquisition

Numbers don’t lie, but often they don’t tell the whole story. If you look at the facts and figures alone, launching a startup seems like a daunting enterprise. It seems like a miracle anyone makes it out the other side.

  • 90% of startups around the world fail.
  • On average, it takes startups 2-3 years to turn a profit. (Venture funded startups take far longer.)
  • Post-seed round, fewer than 10% of startups go on to successfully raise a Series A investment.
  • Less than 1% of startups go public.
  • A startup only has a .00006% chance of becoming a unicorn.

Ouch.

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From The Vault: VC Legend Bill Gurley On Startups, Venture Capital and Scaling

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Bill Gurley in a blue suit
Bill Gurley

This interview was originally published on December of 2020, and was recorded at the inaugural dot.LA Summit held October 27th & 28th.

One of my longtime favorite episodes of Office Hours was a few years ago when famed venture capitalist Bill Gurley and I talked about marketplace-based companies, how work-from-home will continue to accelerate business opportunities and his thoughts on big tech and antitrust.

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