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XTechstars LA Class of 2020; What It's Like to Run an Accelerator During a Pandemic
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

When the founders who lead the ten young startups selected for the 2020 Techstars LA class begin their three month accelerator program Monday, they won't be gathering in the Mid-Wilshire office and shaking hands as every other class has done. Like the rest of us, they will be working at home because of the coronavirus. Dinners, meetings, socializing, and mentoring sessions will all be online.
"A big part of the magic of the program is the relationships that are from proximity and from everyone working together in the same space and so what we're doing is we're endeavoring to create as much as that connection in the virtual world as possible," said Anna Barber, managing director of Techstars LA.
Barber is a big fan of Post-it notes and remembers several occasions where she's helped a founder arrive at an epiphany during a whiteboard session. That will not be possible this time around, but Barber wanted to try to replicate the experience as much as possible, so last week she and program manager Alex Karevoll rented a U-Haul truck and delivered whiteboards, Post-its, markers, and snacks to the new class, crisscrossing the city from Santa Monica to Encino and East L.A.
"We wanted to bring the Techstars experience to people at home," said Barber. "It was cool to see the different parts of L.A. that people are coming from."
Coronavirus means many elements of Techstars will be different this year, though the basics remain the same; Ten startups will receive three months of intensive mentoring and then present at a Demo Day in October (which Barber still hopes will be in-person). Techstars invests $120,000 for a 6% cut of equity.
Techstars LA companies have gone on to raise an average of more than $2 million of outside capital after the program. Standouts from the previous three classes include Slingshot Aerospace, Blue Fever, Stackin, Fernish, Liquid,Dash Systems and Finli.
The health and wellness category is dominant in this year's class with teams tackling teletherapy for intersectional communities, cancer care coordination, breast milk testing to optimize infant nutrition, and remote evaluation of ADHD and learning differences. Media and e-commerce companies include an esports analytics platform, a podcasting services provider, a platform for college creatives to connect with brands, and a fashion and beauty marketplace for Latinx consumers.
Nine companies include women, Black or Latinx founders, with six in the CEO seat and there are six mixed gender founding teams. Barber says diversity has always been important for Techstars LA, both because it is vital for building the kind of inclusive ecosystem she wants in L.A. and also it is simply good business.
"I've always been a believer in the idea that diversity produces better investing outcomes," said Barber.
Barber usually narrows down the ten selections from hundreds of applicants with lots of face-to-face meetings to get a feel for founders, but this time she has met almost none of them.
"It was a challenge for me," said Barber. "I am a founder-focused investor and so much of that is about getting to know people and build a strong personal relationship with them and also understanding who they are and what motivates them and I feel like it's very hard to make those connections over video."
Despite the limitations of running a remote accelerator, Barber is trying to find the silver linings, such as being able to get speakers and mentors who would not ordinarily have the time to fly to L.A. She is also using Sococo, an online platform that simulates a virtual office.
"If you want to talk to someone, you can just enter the room in the virtual office that they are in and talk to them," Barber said. "It takes longer to build connections in a remote setting, but we can still do it," she said.
All but one of the startups in this year's class is headquartered in Los Angeles. Some like, Thrive Education, the remote provider of ADHD and learning differences, only recently relocated from the Bay Area.
"We think it's important for us to be based in LA," said Jack Rolo, Co-Founder & CEO of Thrive Education. "A lot of startups, if they have the choice, are wanting to locate outside of the Bay Area. L.A. is expensive but it's still cheaper than living in the Bay Area. It will help us have a longer runway."
Rolo is hoping to come out of Techstars in a position to raise a seed round in October. "Our product works but it's not polished just yet," he said. "We want it to be perfect."
CLLCTVE, which is the platform for college creatives to connect with brands, is relocating from Syracuse this week.
"We're very excited for L.A.," said Kelsey Davis, founder and CEO of CLLCTVE. "When you think of diversity and creativity, L.A. is a representation nationally of that space."
Davis says Techstars LA was the only accelerator she seriously considered. "For us it just felt so right," said Davis.
Davis, 23, who is Black, wore a sweatshirt during an interview with dot.LA conducted via Zoom with the phrase "Black tech. Green money" emblazoned across the front. She says she is pleased to see the tech world finally having long overdue conversations about race and she says she won't squander the opportunity. Her goal is nothing short of building a LinkedIN for Generation Z.
"Now that we're here we have to roll up our sleeves and do the hard work together," said Davis. "If I'm given half of what everyone else is given, I'm going to take it twice as far."
Get to Know Techstars' 2020 Class
Pod People
Pod People is a full-service podcast production and staffing agency with a network of over 700 audio professionals across the globe.
JoyHub
JoyHub 's enterprise software integrates multifamily operator systems into a single, centralized data platform.
Ayana Therapy
Ayana Therapy provides online therapy for minorities with an emphasis on intersectionality.
CLLCTVE
CLLCTVE is a platform connecting college creatives with brands targeting Gen-Z consumers.
Lactation Lab
Lactation Lab provides breast milk analysis and personalized recommendations for mothers to optimize their child's health and nutrition.
Preveta
Preveta is transforming cancer care by arming clinicians with data and insights to improve outcomes, and blazing a trail for providers to deliver value-based care.
Shop Latinx
Shop LatinX is the leading fashion and beauty lifestyle brand with products designed by and for the Latinx community.
Sike Insights
Sike Insights powers remote teams to work better together. Our first product, Kona, is an AI-powered Slackbot that helps you communicate.
StatsHelix
StatsHelix is a B2B gametech company focused on esports and streaming.
Thrive Education
Thrive Education provides remote tele-assessments for learning differences (LDs) such as dyslexia, ADHD, and autism.
Meet the Techstars L.A. Class of 2020!www.youtube.com
- New Techstars Anywhere Accelerator Class has LA Company - dot.LA ›
- Here is Techstars' Starburst Space Accelerator Class - dot.LA ›
- Anna Barber Discusses Techstars and the Future of L.A. Tech - dot.LA ›
- Watch Techstars LA's 2020 Class Demo Day - dot.LA ›
- Techstars LA Names Matt Kozlov Its Managing Director - dot.LA ›
- How M13's Anna Barber is Putting Local Startups First - dot.LA ›
- Meet TechStars LA's 2021 Accelerator Cohort - dot.LA ›
- Adway Raises $6M to Fund Ad Projections on Autos - dot.LA ›
- Event: Techstars Los Angeles Demo Day Presentations - dot.LA ›
- Watch Techstars LA's 2020 Class Demo Day - dot.LA ›
- Watch Techstars LA's 2020 Class Demo Day - dot.LA ›
- Like Etsy, But for Latinos. Shop Latinx Makes a Debut - dot.LA ›
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
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Genies Wants To Help Creators Build ‘Avatar Ecosystems’
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”
The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.
Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.
Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
How To Startup Part 8: Exits
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.
Welcome to the last installment in the “How To Startup” series and an often overlooked step when creating a business: exiting. In short, an exit strategy is exactly what it sounds like - a way out, sort of. I say sort of because frequently a sale of a company is just a new beginning, but more on that below. Startups usually seek an exit to generate investment returns for their investors and shareholders (usually including their employees), or sometimes to limit losses. It is important for founders to keep the possibility of an exit in the back of their minds at different stages of the business’ growth. Some startups are “big swings” where founders and their investors believe the idea and the team have the potential to turn the company into a multi-billion dollar public company. But many startups are smaller ideas where a smaller sale is a good outcome and is something always to be explored. It is important for founders to know which of these best describes their company.
As we’ve already learned in previous installments, the most successful entrepreneurs are the ones who plan ahead. So now that your company has traction and growth—or you’re a proactive entrepreneur who wants to get ahead—it’s time to think about an exit for the business.
Types of Exits
There are many different common exit strategies, but ultimately the one you choose will depend on your own business, personal and financial goals. I cover some of the pros and cons of each strategy below.
Liquidation
Failing, but “failing fast” and liquidating can sometimes be the best route to minimize losses for a business. You’ll likely find yourself in one of two scenarios when considering a liquidation: you’re already at the end of your rope - be it financially or otherwise - or you can see the end coming. If you’re fresh out of cash, evaluate how you can responsibly wind down the business for all parties involved - yourself, employees and investors. If you can tell early on that you don’t have product-market fit or traction and you still have cash left, plan to exit early and return money to investors. A great example of this is when Jeffrey Katzenberg returned $350M to investors instead of simply running Quibi until it was out of cash.
Sale or Acquisition
If you plan to sell your company (a.k.a. if it is getting acquired), you can receive payment from the acquirer in cash, stock or a combination of both. The acquirer can pay you cash for the company or you can exchange your stock in your company for shares of stock in the newly combined company. This will let you maintain being an active participant and shareholder as the company continues to grow. It’s not common in tech for acquisitions to involve both cash and stock. If you believe the company is poised to continue scaling, then definitely consider receiving stock as a part of the transaction. A famous example of this is when Facebook purchased Whatsapp for $4B in cash and $12B in Facebook shares in 2014, helping them grow into developing markets. The Facebook stock that Whatsapp shareholders received ended up being worth many multiples of the $12B which it was valued at during the time of the deal.
The amount a startup can sell for is determined by a few factors. Here are a couple of examples of how valuations are determined:
- If it’s a small company worth <$10M, it’s probably an acquihire (the process of acquiring a company primarily to recruit its employees). In this case, acquirers usually value the target based on how many engineers or product people are at the company.
- If it’s a deal worth <$100M, it’s usually priced more on strategic fit than real analysis such as what the target brings to the acquirer. This could be technology, a great team, a new business line they can build on, great potential of the merger, etc. For example, when I was CEO of Zillow we acquired 16 companies, most of which were in the $10M-$100M price range, and we always determined fair value by focusing on the overall level of strategic fit of the target more than evaluating the actual financial results of the target.
- If it’s a bigger deal with >$100M, the target’s financial results are usually benchmarked against other public comps and require real math to analyze. At deals of this size, advisors such as investment bankers usually participate in the deal and bring the analytical rigor and external perspective needed to evaluate the fairness of the deal for both sides.
Sometimes a sale is the end of the road for a company. But more often than not, it is just the beginning of the next chapter. For example, when Zillow acquired StreetEasy, the leading real estate portal in New York, we invested significant resources to grow the company after the acquisition. We added headcount, rebranded the company, invested in advertising and grew it substantially post-acquisition. Far from the sale being the end of the company, it was really just the beginning. Another example is Google’s acquisition of YouTube in 2006 for $1.65B of stock. At the time, YouTube was struggling with a myriad of legal and copyright infringement issues from content owners and was struggling to keep up with user demand. Under Google’s ownership, YouTube cleaned up its content copyright issues, invested tens of millions of dollars in technology to improve the service, and today YouTube is probably worth at least $100 billion under Google’s ownership and stewardship.
Initial Public Offerings (IPOs)
Traditional: Taking a company public is one of the ultimate goals for many founders, but it’s not exactly the finish line. In fact, it’s quite the opposite. For example, I named our IPO preparation at Zillow “Project Step” to emphasize to the team that it was just a “step” along the way towards building a great business.
In an Initial Public Offering, a company sells shares for the first time to public shareholders, and the stock is then traded on a stock exchange. This can be beneficial for a few reasons, such as being able to raise capital, get research reports written about the company and create liquidity for your investors so they can sell their stock. On the flip side, IPOs can be expensive (the fees are usually 5-7% of the amount raised) and come with a lot of uncertainty. One of the biggest challenges with this method is that the IPO window can be open or closed, and is dependent on things out of your control.
If you do pick this method, a piece of advice I often tell founders is to act and operate like a public company well before you actually are one. More on this and IPOs at a later date as I’ll probably do a separate piece on it.
SPAC Merger: A Special Purpose Acquisition Company (SPAC) is another way for a company to go public. With a SPAC, a publicly traded company is created for the purpose of acquiring or merging with an existing private company. One benefit of going the SPAC route is that, for now, company projections are permitted to be shared with investors during a SPAC merger which allows investors insight into a company’s growth prospects. I say “for now” because the SEC is evaluating this and there is speculation that it will no longer be permissible in the future. Another advantage is that you can select your shareholders through the Private Investment in Public Equity (PIPE) process plus receive advice and “sponsorship” from the SPAC itself which can be helpful to the company. The cons of a SPAC process are that it can be difficult to get enough investor focus on the company once you’ve gone public in this way, and SPACs are currently out of favor with investors.
Direct Listing: In a direct listing, a private company converts into being publicly traded but doesn’t actually sell any shares. Companies that choose to go public using this method usually have different goals than those that use an IPO - specifically, they do not need to raise capital through the offering. Direct listings create liquidity for existing shareholders and are usually less expensive than an IPO, but companies miss out on the chance to raise money.
Lessons On Exits
No matter what route you end up taking, when preparing for an exit: Always aim to be on the radar and top of mind for acquirers, understand your cap table and the goals of your shareholders, utilize investment banks and investors as resources and hire great M&A lawyers.
Missed a part or looking to reread? Part 1: Ideation, Part 2: Naming Your Business, Part 3: How To Pitch, Part 4: Surviving A Downturn, Part 5: Minimum Viable Product, Part 6: Product-Market Fit, Part 7: Scaling or read them all.
- When to Accept Startup Equity — and Why - dot.LA ›
- How To Brainstorm a Good Startup Idea. - dot.LA ›
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.
Here's What To Expect At LA Tech Week
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.
The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.
From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.
DoorDash’s Founding Story: Stanley Tang, a cofounder and chief product officer of delivery giant DoorDash, speaks with Pear VC's founding managing partner, Pejman Nozad. They'll discuss how to grow a tech company from seed stage all the way to an initial public offering. Aug. 19 at 10 a.m. to 12 p.m. in Santa Monica.
The Founders Guide to LA: A presentation from dot.LA cofounder and executive chairman Spencer Rascoff, who co-founded Zillow and served as the real estate marketplace firm’s CEO. Aug. 16 from 6 p.m. to 9 p.m. in Brentwood.
Time To Build: Los Angeles: Venture capital firm Andreessen Horowitz (a16z) hosts a discussion on how L.A. can maintain its momentum as one of the fastest-growing tech hubs in the U.S. Featured speakers include a16z general partners Connie Chan and Andrew Chen, as well as Grant Lafontaine, the cofounder and CEO of shopping marketplace Whatnot. Aug. 19 from 2 p.m. to 8 p.m. in Santa Monica.
How to Build Successful Startups in Difficult Industries: Leaders from Southern California’s healthcare and aerospace startups gather for panels and networking opportunities. Hosted by TechStars, the event includes speakers from the U.S. Space Force, NASA Jet Propulsion Lab, Applied VR and University of California Irvine. Aug. 15 from 1 p.m. to 5 p.m. in Culver City.
LA Tech Week Demo Day: Early stage startups from the L.A. area pitch a panel of judges including a16z’s Andrew Chen and Nikita Bier, who co-founded the Facebook-acquired social media app tbh. Inside a room of 100 tech leaders in a Beverly Hills mansion, the pitch contest is run by demo day events platform Stonks and live-in accelerator Launch House. Aug. 17 from 12:30 p.m. to 3 p.m. in Beverly Hills.
Registration information and a full list of LA Tech Week events can be found here.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.