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.
The Coachella of capitalism is back.
After repeatedly postponing its flagship event last year, the Milken Institute announced Thursday its Milken Institute Global Conference will return this fall to a fully in-person event from October 17-20 at the Beverly Hilton Hotel.
The conference normally takes place in May but as a crucial source of revenue to the non-profit organization – with ticket packages in the thousands of dollars and lucrative sponsorships – organizers did not want to wait another year to convene.
"We also look forward to the spring of 2022, when we will convene for the 25th annual Global Conference and expand on the issues discussed in October," Michael Klowden, CEO of the Milken Institute said in a statement. "The past year drove us to reflect on how we live, what we believe, and what matters most."
The gathering normally attracts 4,000 attendees from more than 70 countries to the Beverly Hilton to hear from luminaries from the worlds of finance, politics and medicine. Milken has a full-time staff of about 25 working on the conference year round and another 100 who pitch in once the date gets closer.
Even with vaccinations now open to anyone 16 years or older in California, many have expressed skepticism about returning to conferences after a year of social distancing and Zoom meetings. Almost half of respondents in the dot.LA VC Sentiment Survey said they do not think they want to go to a conference until the first half of next year.
California Gov. Gavin Newsom has said California will fully reopen June 15, as long as vaccines are available to anyone.Vox Media's Code Conference also announced it will return in-person this Fall in Beverly Hills and that event will be held even earlier than Milken's, in September.
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It is a great time to be a startup founder, with soaring valuations and investors tripping over themselves to get a piece of startups. As hot as the startup scene was last year, it has gotten even hotter this year, with a slew of megadeals pumping even more money into the biggest startups as they prepare to go public in the frenetic IPO market.
Overall, investors poured $69 billion into tech companies last quarter, a staggering 92.6% increase over the same quarter last year, according to data released Wednesday by PitchBook and the National Venture Capital Association.
Three-quarters of all investment flowed to late stage rounds, the highest percentage since 2010. There were 167 megadeals of $100 million or more, for a total of $41.7 billion raised in the first quarter. By comparison, megadeals accounted for $76.6 billion raised during all of last year.
In the Los Angeles area, SpaceX hauled in another $850 million in February. There was also ServiceTitan's $500 million financing last month, which makes the Glendale company that makes software for plumbers and carpenters worth $8.3 billion.
At the other end of the startup life cycle, investors nationally focused on quality over quantity. There were only 722 first financings reported, which is a historically low number, but those deals averaged $4.7 million a piece, which was a new record high.
That benefited companies like Artie, a video game platform developer that pulled in $10 million in a seed round this February.
In total, 315 Los Angeles startups raised a total of $6.7 billion in the first quarter, a slight decrease in the number of venture investments but a 75% increase in deal value over the same quarter last year.
As has historically been the case, Los Angeles trailed not only the Bay Area in deal value ($25.5 billion) but also New York ($10.2 billion) and Boston ($7.9 billion).
The dot.LA VC Sentiment Survey also found higher valuations. Seventy-seven percent of respondents said they saw higher valuations last quarter, but that did not stop them from closing deals.
The billion dollar question is whether, with so much money sloshing around, we are in a bubble that is going to burst. That is hard to judge now; it takes years to know if startups will succeed – whether they will be the next Airbnb or the next Quibi.
But by at least one metric there are fewer quality startups to go around. Dropbox, the secure document sharing platform that many startups use to share pitch decks, said this month the demand for decks continues to outpace the number of investment opportunities that are available. Founders are also shopping their decks around more, which is an indication they have more options of where to get capital and can be choosy.
In other words, it is very much a founder's market.
"We knew the first quarter would represent the beginning of a rebound, but I don't think anyone expected VC and startup activity to be this high; investor confidence is booming and beginning to outpace the supply of startups seeking fundraising," Russ Heddleston, DocSend co-founder and CEO, said in a post sharing the data.
However, investors contend that the market frenzy is not just driven by a flood of capital but also dramatic shifts in consumer behavior over the past year.
"In 2020, consumers spent over $860 billion online with U.S. merchants, an astonishing 44% year-over-year increase," said Deborah Benton, founder and managing partner of Willow Growth Partners, an early-stage VC firm that invests primarily in digital first brands that are benefiting from an accelerated shift to online shopping.
Counter Brands is getting a billion-dollar makeover, and joining the unicorn club.
The parent company of Beautycounter, which makes eco-friendly skin-care products and cosmetics, is being acquired by the massive private equity firm, The Carlyle Group, executives at the companies announced Tuesday.
Equity funding for the deal came from Carlyle Partners VII, an $18.5 billion fund that focuses on U.S. consumer, media and retail companies – part of the $246 billion overall fortune Carlyle manages.
Beautycounter was founded by Gregg Renfrew in 2011 and last year raised at a $400 million valuation in 2018, according to Pitchbook data.
Renfrew told dot.LA co-founder Spencer Rascoff in an interview recorded in December that she started the company after seeing young friends around her be diagnosed with cancer or suffer from infertility.
Beautycounter founder Gregg Renfrew
"I started to wonder what was going on, why were things going so wrong for the Earth and why were things going terribly wrong for human health?" Renfrew said. "The one thing that I over time became aware of is that we were all being exposed to toxic chemicals and that there is a direct link between environmental health and physical health and our exposure to toxic chemicals."
Renfrew became "obsessed" with trying to remove all chemicals from her home, but she had trouble finding cosmetics that were both free of toxins and effective.
"I thought, why am I asked to compromise my health in the name of beauty?" she wondered. "And I thought I could start a brand that actually stands for health and performance simultaneously."
Renfrew grew up in New York City and still has an affinity for the city, but she says she is happy to have started Beautycounter in Santa Monica.
"When you think about clean living – whether that's focusing on the environment, sustainability, healthy food, healthy skincare or cosmetics – you see so much happening in Los Angeles," she said. "We are so well ahead of the curve on so many things that are happening."
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