"We are, in part, copying models from agencies like Red Antler and Gin Lane," said Trimble, who credits Jules Ehrhardt, founder of a New York firm called FKTRY, with coining "creative capital" term. Ehrhardt (also a former co-owner of ustwo) sketched out a case for creative capital studios on his website, arguing the model makes sense when agencies offer "premium, pivotal, 'money can't buy' expertise" that typically "early-stage companies would find it impossible to assemble."
And Rising co-founder Jonathan Trimble
Gin Lane (which relaunched under the name Pattern) is known to have traded its brand marketing services for an early stake in direct-to-consumer shaving company Harry's, which later sold to the owner of Schick. Likewise, Red Antler took a stake in Casper, the trendy mattress maker that eventually listed on the New York Stock Exchange.
And Rising is comparatively newer to the game. It launched in 2018 out of 18 Feet & Rising and started trading its services for equity a year later, before building an entire business around the creative capital concept.
And Rising argues that it offers "a more patient, invested and equity-efficient alternative to traditional capital." It aims to put the idea to work in Los Angeles by partnering with ventures based in or around the city that jive with its B Corporation certification and fund philosophy.
"We're looking for brands that are clean and conscious in the direct-to-consumer space, or consumer tech for good," said Trimble of the new fund called LA-Rising. The theme may fit right at home in the city that's productized everything from juice cleanses to yoga. The agency's portfolio to date includes a hard seltzer brand backed by musician Ellie Goulding and a popped lotus seed snacks maker, both part of a focus on "clean comfort foods."
As for scale, And Rising says the brands in its portfolio are bringing in "just under $500k" and "just over $145 million" in annual revenue.
"A lot of our portfolio brands are coming over to the states, and we've been scaling brands from the states back in the U.K. as well, specifically the brands Halo Top and Popchips come to mind," said Trimble. "So it's just making a ton of sense for us to have a second base, and we really love Los Angeles as the home for that, in part because New York is quite taken care of with some companies there that do [the services for equity model] well."
And Rising plans to establish a physical presence in Los Angeles this fall, and it's eyeing Silver Lake as a potential counterpart to its home office in London's trendy Camden borough.
"L.A. has a lot of similarities with London, we think. It has the big creative culture around it," said Trimble. "Both cities are trendsetting in slightly different ways, and therefore they're really good testbeds for whether you're onto something. They have a lot of similarities and they're also quite different, so it should be quite an enriching couple, if you know what I mean."
Editor's Note: This article has been updated to clarify And Rising's relationship with 18 Feet & Rising
Based in Costa Mesa, Crescent, which refers to the arc of schools curving south from UC Santa Barbara to UC San Diego, is run primarily by six student or recent graduate co-founders — or "managing partners" — and a network of student "university partners" in engineering-heavy schools including UC Irvine, USC, UCLA, UCSD and the Claremont Colleges.
University partners keep an ear to the ground at their respective schools in hopes of finding the most promising startup ideas, which they then pass along to the folks at Crescent. Candidates who are deemed worthy receive a $40,000 check. Since the managing partners began fundraising in December 2020, they've raised $200,000 of soft-circle capital and added one company, Lolly, to their portfolio. Now, they're aiming to raise a total of $1 million in the next six months.
"A lot of these early-stage venture firms are trying to find the best deals" through accelerators, summer programs and scout networks, said Prerit Seth, a co-founder who graduated this year from UCI with a degree in economics and now works as an associate product manager at Citrix. "Having students directly on campus closes that gap." Investors typically spend at most a day or two with startup founders, he points out, but "the student partners on our campuses have known some of their peers for a long time."
Student venture funds are nothing new. The University of Michigan's Wolverine Venture Fund, the country's first student-run VC fund, was founded in 1997. Since then, groups like Contrary Capital, Dorm Room Fund, A-Level Capital and Rough Draft Ventures have sprung up to tap the student creator market. But by and large, said Seth, those funds are focused on Ivy League universities and a handful of Bay Area schools.
All but one of Crescent's co-founders went to Southern California schools, where they observed the wealth of engineering talent —and dearth of startup funding relative to the Bay Area — first-hand. So in the fall of 2019, Keyan Kazemian, a junior majoring in computer engineering at UCI, pitched the idea for Crescent to fellow junior Praneet Sah, who was on the same campus studying computer science and helming the school's Hedge Fund Society. Together they assembled the rest of the team and set out to secure funding from angel investors, institutions and high-net-worth individuals in the region.
"There is not a lot of capital available for the Southern California area," said Sah. "The bridge to that capital is different. We're trying to be that bridge."
Sah said the region's student startup ecosystem is bursting with so many ideas that the fund sees a dozen startups from their target schools every month. "Some with super-interesting ideas, some with straight-up weird ideas," he said.
So far, Crescent has invested in only one company: Lolly, a Gen Z video dating app described as TikTok meets Tinder, which went live in December 2020 and closed a $1.1 million seed round in January with help from the fund's $40,000 investment. A Crescent student partner at the Claremont Colleges named Zach Friedman knew Lolly co-founder Marc Baghadjian and his partners for years and introduced them to the Crescent team in late 2020.
"The thing about the fund that's so amazing is that they know who you are from third grade, because they went to high school, to middle school with you," said Baghadjian. "They know you better than any professional venture capitalist would know. Because they're my demographic and my age, and they get my product, they can give me better feedback than any adult would."
Like Lolly, many of the other consumer startups founded by younger generations are also geared toward youth, like the L.A.-based PearPop, which lets users bid for screen time with their favorite TikTok stars, and Poparazzi, a photo-sharing platform that lets users post photos to their friends' profiles. Funding from a student venture capital fund can help boost the product, and the profile, of youth-led startups, making them more visible to traditional investors. It also allows youth to drive their own tech trends, rather than let older investors dictate them.
According to L.A. Tech Week co-organizer Michelle Fang, student venture capital programs like Crescent are "empowering my generation to accelerate the bubbling tech scene here in Los Angeles beyond traditional means."
"Gen Z is among the first to adopt new products and drive internet trends, from Social Media 3.0 to crypto, and on," she added. Student VCs are "the perfect alignment to empower this same generation to invest in what they know best."
Crescent is currently accepting applications from students online, and though they see a lot of A.I., blockchain and biomedical startups, Seth said the fund is "industry agnostic—we're just trying to understand the trends." And to ensure the fund's perspective on tech remains student-focused, the co-founders, all of whom graduated this year, are preparing to hand over the keys to the fund to the next batch of Southern California students.
Lead art by Ian Hurley.
Editor 's note: This story has been updated to clarify the name of the Claremont Colleges.
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