Jiake Liu is the founder of a startup outdoor furniture company, but lately he feels like he's running a second company — one that's helping supply local hospitals with thousands of protective masks and, in the process, rallying Los Angeles' tech community.
Liu started SoCal Tech for Hospitals in early March with the goal of raising $60,000 to purchase 30,000 masks for hospitals facing shortages. He's now helped raise nearly $200,000, delivered 50,000 hospital-grade masks and is looking to up the ante with the region's vast tech community to do good beyond the pandemic.
<p>Over the past months, he's enrolled some of the most well-known startups in town to pitch in for the logistical effort of distributing the masks. After the workday ends, Liu jumps on the phone with other founders to orchestrate the effort. </p><p>"We are really able to leverage everyone's expertise," he said. "It really is the spirit of entrepreneurship. You don't necessarily have the right answers. But you come to figure things out."</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MTc3MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MjQyMTEyN30.WVx0C9QhDLvVkFRlZmEn7EOdjZ3meTLe97s2g3Uryoo/image.jpg?width=1245&coordinates=0%2C43%2C0%2C35&height=700" id="671cf" class="rm-shortcode" data-rm-shortcode-id="9462c9374beed2f895d484c4a0abeb76" data-rm-shortcode-name="rebelmouse-image" />
</p><p>His own company, Outer, uses their warehouse to store palettes of masks he's helped procure. Trucks from on-demand storage company Clutter distribute the medical supplies. While, Well Health pitches in by gauging the needs at local hospitals. Others, like the head of the rental furniture company Fernish rally venture capital donations. <br/></p><p>Early on Liu found that venture capital firms had already been bombarded with requests for donations, but his pitch was that this effort would benefit local hospitals and was different.</p><p>"We are really the only group that's like 'let's really reach the L.A. tech community,'" he said. "If you work in L.A. tech you should donate to us. It was a call to action."</p><p>It got attention. He's <a href="https://www.socaltechforsocalhospitals.org/our-supporters" target="_blank">pulled in donations</a> from some of the region's top firms including Wonder Ventures, GreyCroft, Upfront Ventures. He also pulled in donations from the online coupon cutter Honey Science Corp. and carpet seller Ruggable. dot.LA is also a contributor. In return, companies get a shout out on their website.</p><p>Among the hospitals that have received the masks are Adventist Health Glendale, Children's Hospital of Los Angeles, Dignity Health - California Hospital Medical Center, Pomona Valley Medical Center, St. Francis Medical Center, LA+USC Medical Center, Arrowhead Regional Medical Center, White Memorial Community Health Center, Harbor UCLA Medical Center and Olive View UCLA Medical Center.</p>
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MTc3Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMTQ2MDc2MH0.wT9tvEhagfi6DHZr0BWCVDWP-FKE_-vtiBMfxq-g_z8/img.jpg?width=980" id="3d215" class="rm-shortcode" data-rm-shortcode-id="023b67c85ca59af2594a26cb53e5abb0" data-rm-shortcode-name="rebelmouse-image" />
<p>Liu began the effort because a doctor couple he knew that worked at Cedars Sinai Medical Center were worried about the supply of masks, so he started a <a href="https://www.gofundme.com/f/fight-covid19-la-startups-for-la-hospitals" target="_blank">GoFundMe page</a>.</p><p>"When I started, I just wanted to get masks for my friends, but as I started talking to folks and getting a sense of the desire to do good," he said.</p><p>Someone at the location data software company Factual saw the page and introduced Liu to the nonprofit the Count On Me Family Foundation, which is now handling the funds.</p><p>Liu's next goal is to hit $250,000 in donations, but he has a larger one. With non-profit LA-Tech.org recently joining the effort, he's looking at ways to keep the momentum going beyond the pandemic.</p><p>"Now that we have attention of the tech community, the question is can we diverge some of the energy that we captured to continue to do good?"</p>
<p><em>Editor's note: dot.LA is a contributor to the fund.</em><br/></p>Related Articles Around the Web
Read more
Show less
One early-stage venture capital fund is launching a new initiative Tuesday: Helping Los Angeles entrepreneurs who have suddenly found themselves out of work as the coronavirus pandemic sideswipes the job market and freezes the amount of money flowing into startups.
Wonder Ventures, the Santa Monica-based firm that's carved a niche by writing checks to young companies below the radar of bigger VCs, has committed to fund at least three Los Angeles founders in the next month with checks starting at $100,000. The new WFH program -- which stands for Wonder from Home -- is aimed at those newly laid off from tech companies who have an idea they want to pursue.
<p>"Those people are stuck at home by law and a bunch of great talent is not working, which creates an opportunity," said Dustin Rosen, managing partner of Wonder Ventures, who is overseeing the initiative along with investor Abha Nath.</p><p>Indeed, as unemployment has ripped through the U.S. economy and sent small businesses scrambling, there has been a great amount of uncertainty about whether venture investors are still eager to write checks. Many investors have been trying to project an air of normalcy, publicly insisting that they are still writing checks as the world reels from the novel coronavirus. </p><p><a href="https://dot.la/coronavirus-investor-funding-2645527955.html" target="_self">Whether they actually are</a> – especially to companies not already in their portfolio – <a href="https://techcrunch.com/2020/04/09/its-bullshit-that-vcs-are-open-for-business-right-now-but-that-could-change-in-a-month/" target="_blank">is another matter</a>. Rosen saw this as "an opportunity to put our money where our mouth was." </p><p>Though Wonder Ventures has promised a minimum investment of $100,000, he says the check could very well be considerably larger given that the firm's average investment is between $250,000 to $500,000. The firm has deployed some of <a href="https://techcrunch.com/2018/11/15/wonder-ventures-aims-to-dazzle-l-a-startups-with-its-new-seed-stage-fund/" target="_blank">the $15 million of seed funding it secured in 2018</a> to startups such as financial services firm Tala and storage company Clutter.</p><p>Wonder has also partnered with the law firm Orrick, Herrington & Sutcliffe LLP to incorporate and draw up funding documents for free. <a href="https://wonderfromhome.typeform.com/to/pHlFdF" target="_blank">Interested founders simply have to complete a five-minute online application</a> and will be selected on a rolling basis from now until May 3rd.</p><p>To apply, teams must meet three criteria:</p><ul class="ee-ul"><li>There must be a minimum of two full-time co-founders who do not have other full-time roles.</li><li>One team member must be in L.A. </li><li>At least one member must be a full-stack developer.</li></ul><div></div><div><p>Wonder Ventures aims to be the first institutional money into very young companies, making about 5-7 investments a year. With conferences cancelled and coffee chats out of the question, scouting new companies has become considerably more difficult during lockdown. </p><p>"We pride ourselves on meeting a ton of talent and it's hard to meet people right now," Rosen said. "This is an attempt to meet more founders because some of our traditional ways of doing that aren't feasible."</p><p>Rosen hopes that the ideas they fund now can one day blossom into the next iconic L.A. brands, when the coronavirus is a distant memory.</p><p>"We believe that these tough times will produce great companies," <a href="https://medium.com/@duro/introducing-wfh-wonder-from-home-8fb56ae93734" target="_blank">Rosen wrote in a blog post.</a> "The best founders are not deterred by pandemics, but instead, are encouraged to make a better world. These founders are not hanging their heads because of a lay-off or furlough, but are enthused to take off and build their dream idea."</p></div>
From Your Site Articles
- Wonder Ventures Plans to Fund 3 Companies With Ties to L.A. - dot ... ›
- venture-capital - dot.LA ›
- Los Angeles' Tech and Startup Scene is Growing. - dot.LA ›
- los-angeles-startups - dot.LA ›
Related Articles Around the Web
Read more
Show less
- After WeWork, VC's noticed a major shift in how founders were pitching their companies. Growth and costly customer acquisition strategies are out while profitability is in.
- Some VC's, scared off by high valuations, are holding back their dry powder waiting for the market to cool. For instance, PLUS Capital's team compiled a list last year of companies it wanted to invest in if only the price was cheaper.
- VC's are excited about employees leaving SpaceX and starting new companies. "That talent is going to be game changing."
As the new decade begins, Southern California's tech scene continues to sizzle. More than 7,000 investors have poured money into 4,768 startups, ranging from a unicorn that aspires to have scooters whizzing through every city on earth to one that has ambitions to colonize Mars to the thousands of smaller companies just trying to get to their Series A, according to data analyzed by dot.LA.
"No one is doubting L.A.'s place in the tech ecosystem anymore," said Arteen Arabshahi, vice-president at WndrCo. "People realize L.A. is meaningful."
Last year ended with what is arguably the most consequential local acquisition to date when Paypal bought Honey for $4 billion. According to Pitchbook, L.A. VC exit deal flow hit $8.4 billion last year, the second highest amount ever after 2017, when Snap went public.
"I don't think Los Angeles will ever be Silicon Valley," said Brian Lee, co-founder and managing director of BAM Ventures. "We don't have grandparents named Fairchild Semiconductor and we don't have aunts and uncles named Google and Yahoo. But we are growing and we do have some great businesses being started here."
<p>Despite all the momentum, there are plenty of headwinds in the broader startup world to keep L.A. entrepreneurs and investors up at night. After WeWork's disastrous flameout and the disappointing IPOs of Uber and Lyft and shelving of IPOs for Postmates and Endeavor Group Holdings Inc., founders are under increased scrutiny to demonstrate they can deliver profits and not just meteoric growth. Meanwhile, Pitchbook data shows deal value fell slightly last year from 2018's record high, to $136.5 billion. Lastly, as this bull market approaches its eleventh year, companies are stockpiling cash to weather a recession, <a href="https://www.fool.com/retirement/2020/01/19/58-of-investors-expect-a-recession-in-2020-heres-h.aspx" target="_blank">which 58 percent of investors say could happen this year.</a></p><p>To find out where L.A.'s tech scene is headed next, dot.LA interviewed some of the city's top VC's to ask where they are putting their money and what questions they think will shape the beginning of the new decade.</p><h2>1. What's the right balance of profitability versus growth?</h2><p>After WeWork, VC's noticed a major shift in how founders were pitching their companies, a trend they expect to continue for the foreseeable future. Growth and costly customer acquisition strategies are out while profitability is in.</p><p>"It's the soup du jour," said Amanda Groves, a partner at PLUS Capital. "It's trickled all the way down to the seed stage companies, which I think is healthy for people to be aware of."</p><p>Some very young companies are pitching how they will have a sustainable business model even before they've figured out a model for monetization.</p><p>"Now it's in decks and presentations and e-mails," said Groves. "That would never have existed before."</p><p>VC's say it is still important to focus heavily on growth, which is the point of venture capital afterall. They don't need to see profits right away, but they want to see a realistic way for companies to sustain themselves without burning through cash.</p><p>"We are focused on a path to profitability, said Dustin Rosen, managing partner at Wonder Ventures. "When I take companies from pre-seed to seed or series A, I'm coaching them on their presentations to focus on that."</p><p>VC's stressed that they have always been mindful of investing in sustainable businesses. It is not as if they only discovered the magic of profitability after WeWork.</p><p>Lee, one of the area's most experienced tech entrepreneurs who co-founded LegalZoom in 2001, has seen times when VC's prioritize growth and other times like now when profitability is paramount.</p><p>"They shift like the wind and it just drives me crazy," he said. "For me, we just want to build great businesses and it depends on the business model itself and the scale that something has to get to decide whether you want to run for profitability or growth. It should not be macroeconomics that determines that."</p><p>VC's should still have a tolerance for burning through cash relative to product fit and the maturity of a management team, according to Kara Nortman, a partner at Upfront Ventures. Still, she says companies are tightening up post WeWork.</p><p>"People are caring a lot more about capital efficiency," she said. "There's less tolerance for spending in extreme ways."</p><p>It is a shift that Nortman hopes is well-suited to L.A. companies. Nortman says many have long been forced to be more prudent than their Bay Area peers due to the shortage of local VC's like her writing bigger checks.</p><p>"In L.A. you've always had to be a bit more capital efficient," said Nortman. "The valuation is much more reasonable every step of the way."</p>
<p><br></p><h2>2. Will valuations come back to the earth?</h2><p>Despite signs of a modest cooling, Pitchbook data shows valuation size set another record last year at every fundraising stage. Checks are ballooning. And what would have been a pre-seed amount a few years ago is now seen in the seed round and what would have been a pre-seed is now series A, and so forth.</p><p>"Last year we saw an incredible amount of hubris," said Groves. "We're seeing it come back to earth a bit."</p><p>Some VCs, scared off by high valuations, are holding back their dry powder waiting for the market to cool. For instance, PLUS Capital's team compiled a list last year of companies it wanted to invest in if only the price was cheaper.</p><p>"The expectation is that if the market were to turn it might create an interesting buying opportunity for some of those companies where those valuations were out of whack," said Groves. "It sounds a little malicious, but is really just about keeping an eye on companies we really love that we couldn't make the numbers work."</p><p>While the average size of late-stage deals fell from $11.5 to $10.4 million last year, the size of early stage deals rose from $6 to $6.5 million, according to Pitchbook. (The average size of angel and seed funding deals stayed flat, at $1.1 million.)</p><p>"It's tough for price sensitive, early stage funds," said Matt Lydecker, lead investor at Luma Launch. "For us, there's definitely a threshold of valuation we need to be below. We will see a great company with a great founder and we're just priced out."</p><p>Investors will likely have to wait some time for valuations to decrease much due to the massive amount of capital flowing into venture capital. <a href="https://www.wired.co.uk/article/softbank-vision-fund-2" target="_blank">Even if Softbank does not succeed </a>in raising $108 billion for its Vision Fund 2, there is still plenty of capital pouring in from nontraditional investors like asset managers and hedge funds. <a href="https://files.pitchbook.com/website/files/pdf/PitchBook_2020_Venture_Capital_Outlook.pdf" target="_blank">Pitchbook predicts</a> "pre-money valuations will continue to climb in 2020, with the median reaching a decade, if not all-time, high."</p><p>"There's a ton of capital chasing alpha, " said Will Coffield, a partner at Riot Ventures. "There's not really going to be a shift."</p><p><br></p><p class="shortcode-media shortcode-media-rebelmouse-proxy-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGd2lraXBlZGlhJTJGY29tbW9ucyUyRjAlMkYwOSUyRkV2YW5fU3BpZWdlbF9hdF9UZWNoQ3J1bmNoLmpwZyZobz1odHRwcyUzQSUyRiUyRnVwbG9hZC53aWtpbWVkaWEub3JnJnM9NTcwJmg9YzZmM2M0YWVhYzI1ZjkwNmFlMjIzYzAzZTUzOTRmM2M5NmViNTZhODYzYmUxMTJmZjI1MDEwZDdiYjA1OWI3ZSZzaXplPTk4MHgmYz0zMTE0MjQ2MzAwIiwiZXhwaXJlc19hdCI6MTY0NTI2Nzc5NX0.uNv3jNl-rrCNNJ2oWYqU3q63Ujrjub2LkdoGTHS6vuQ/img.jpg" id="4b5a5" class="rm-shortcode" data-rm-shortcode-id="b0e04b6a5737a7d8afd25a9afed1921c">
<small class="image-media media-caption" placeholder="Add Photo Caption...">Snap Inc.'s Evan Spiegel at TechCrunch's Disrupt Conference.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
<a href="https://upload.wikimedia.org/wikipedia/commons/0/09/Evan_Spiegel_at_TechCrunch.jpg" target="_blank">upload.wikimedia.org</a>
</small>
</p><h2><strong>3. How many offices will Sand Hill Road open near the sand?<br></strong></h2><p>While L.A. now has a sizable number of VC funds – mostly at the early stage – companies here have traditionally raised heavily from Sand Hill Road. For instance, Menlo Park's Lightspeed Venture Partners led Snap's seed round, turning $485,000 into around $2 billion when the company went public in 2017. Benchmark led Snap's series A, resulting in another multibillion dollar windfall for a Bay Area firm. By contrast, Honey's investors – including Wonder Ventures, BAM Ventures, and Mucker Capital – were primarily L.A. based.</p><p>"That demonstrates that if you want to get into the best companies in L.A. you can't just wait for them to knock on your door on Sand Hill Road," said Coffield. "We're seeing more investors from San Francisco have dedicated strategies for how to cover L.A."</p><p>At Wonder Ventures, Rosen is noticing the same thing.</p><p>"I've never seen more excitement from Bay Area firms looking to do deals in L.A. because they know there are great companies and they know the prices and competition are less than they are dealing with," he said.</p><p>Just as many Silicon Valley firms have opened up New York offices but there are also homegrown New York firms, Groves says local VC's can co-exist with ones from up North.</p><p>"Silicon Valley has so many more venture funds, particularly ones with certain vehicles that we don't focus on," said Groves. "I think L.A. will mimic what the evolution has been on the east coast."</p><p>More Sand Hill Road offices could drive valuations even higher and reduce the discount that VC's still say L.A. early stage startups are priced at compared to the Bay Area. Even so, L.A. VC's say more capital flowing into L.A. can only be beneficial.</p><p>"It's absolutely helpful," said Nortman. "It's good for us and good for our founders."</p><h2>4. What sectors will shine?</h2><p>L.A.'s tech scene has largely been known for consumer standouts like Riot Games, Snap, and Dollar Shave Club but scores of lesser known, less flashy startups are poised to break through, according to VC's we interviewed.</p><p>"I am expecting more deep technology companies to be launched and more enterprise companies," said Groves. "A lot of that is a function of having the Googles and Amazons and some of these bigger organizations opening up offices, which is drawing more talent to the L.A. ecosystem."</p><p>Nortman too is focused on enterprise, and also agtech, aerospace, and companies that help with climate sustainability. She's excited to see founders who led successful companies in the Bay Area return to L.A to start their next company.</p><p>"They grew up here and are ready to come back," she said.</p><p>Rosen is focused on startups working to improve mental health and wellness.</p><p>"The effect of digital addiction and digital isolation of less traditional human contact has created a unique set of mental health issues that need solutions outside traditional therapy," he said.</p><p>Jamie Montgomery, founder and managing director of March Capital Partners, is looking for more artificial intelligence startups in the area. Up until now, he has found more promising ones in the Bay Area and New York City.</p><p>"We haven't done as much in Southern California as we would have liked, but I think that will evolve," Montgomery said.</p><p>Coffield thinks local defense, aerospace, and robotics companies are ripe with opportunity.</p><p>"There's a whole robotics community developing between downtown L.A. and Pasadena," he said.</p><p>He is particularly excited about employees who have left SpaceX to start new companies, like Relativity Space or Elementary Robotics.</p><p>"We spend a lot of time trying to track the talent out of SpaceX," Coffield said. "That talent is going to be game changing."</p>
From Your Site Articles
- Startups - dot.LA ›
- Hello, Los Angeles: dot.LA Launches to Shine a Light on L.A. ... ›
- Los Angeles' Tech and Startup Scene is Growing. - dot.LA ›
- Join Us For dot.LA's Startup Pitch Showcase - dot.LA ›
- Wonder Ventures Plans to Fund 3 Companies With Ties to L.A. - dot.LA ›
- Los Angeles Tech and Startup Week in Review ›
- Corto Aims to Bring AI to Hollywood Script Writing - dot.LA ›
- Corto Aims to Bring AI to Hollywood Script Writing - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Brian Lee on Why L.A. Is Now a Tech Capital - dot.LA ›
- L.A. Tech Updates: 'Smart' Glass Gets a Boost - dot.LA ›
- L.A. Tech Updates: Tech Coast Angels L.A. Has A New Annual Fund - dot.LA ›
- Catch Up With This Week's Startup News With Our Video Recap - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Tech Coast Angels L.A. Has A New Annual Fund - dot.LA ›
- L.A. Tech Updates: 'Smart' Glass Gets a Boost - dot.LA ›
- Snapchat Rolls Out Pride Lenses For Every U.S. Region - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Rep. Jimmy Gomez Wants to Limit Police Use of Facial Recognition Tech - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Catch Up With This Week's Startup News With Our Video Recap - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Going Public TV Show Allows Viewers to Invest on Screen - dot.LA ›
- Catch Up On This Week's Startup News With Our Video Recap - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Catch Up On This Week's Startup News With Our Video Recap - dot.LA ›
- The dot.LA/ Pitchbook Top 50 LA Startups for 2020 Q2 - dot.LA ›
- Catch Up On This Week's Startup News With Our Video Recap - dot.LA ›
- Catch Up On This Week's Top 5 Stories With Our Video Recap - dot.LA ›
- Catch Up On This Week's Top 5 Stories With Our Video Recap - dot.LA ›
Related Articles Around the Web
Read more
Show less
wndrco
honey
paypal
snap
brian lee
bam ventures
wework
plus capital
wonder ventures
legalzoom
upfront ventures
pitchbook
luma launch
riot ventures
sand hill road
mucker capital
dollar shave club
jamie montgomery
march capital partners
agtech
aerospace
robotics
relativity space
elementary robotics
l.a. tech in 2020
ai