Watch: Investing in Uncertain Times: Why a Reset in Valuations Could be Liberating for Founders

Ben Bergman

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.

Watch: Investing in Uncertain Times: Why a Reset in Valuations Could be Liberating for Founders

A decade-long run-up in startup valuations that came to a screeching halt after the novel coronavirus froze much of the worldwide economy last month could have a silver lining for company founders.

"They can build great businesses but don't have to be chasing a growth rate," said Carter Reum, co-founder of M13. "It can be liberating. We've lived in a world the past few years where an artificially high valuation was nothing more than a vanity mark."


Reum spoke in a dot.LA webinar on the state of investing along with Kara Nortman, a partner at L.A.'s largest venture firm, Upfront Ventures.

dot.LA Strategy Session: Investing in Uncertain Timeswww.youtube.com

Both invest heavily in consumer companies and pointed out that a softening of direct-to-consumer companies began last year after well-documented stumbles at WeWork, Caspar, and other brands.

"There was a lot of shame around the resets in valuations and now I think that's gone," Nortman said. "I've seen that be liberating for founders."

Reum said he is excited to be able to invest in businesses he sees long-term potential in, but could not justify the lofty valuations they demanded from investors. He says now VCs and founders alike can focus more on creating sustainable companies.

"Whereas growth-at-all-costs was really cool that last few years, the coolest thing going forward is controlled growth-with-profitability," he said.

Upfront and M13 are still deploying capital but knowing their next fund could be harder to raise they are being more conservative. Nortman says Upfront is preferring to write checks in the $3 to $4 million range rather than the $10 million sums it would deploy before the crisis out of its sixth series-A fund. The firm normally invests in one new company a month, a pace that has continued.

"Things are still moving at Upfront," she said, but also added: "There's still a big question about how to price things and how to invest in people you've never met."

Nortman said even after the virus subsides there will be less travel and perhaps fewer gatherings. Asked whether her firm was still planning to host the Upfront Summit, a splashy annual conference that brings over a thousand investors and founders to L.A. each winter, Nortman said to stay tuned.

"We view the Upfront Summit as a permanent endeavor and an important element to the community," she said.

"Everyone just breathed a sigh of relief," laughed Reum.

Speakers Include:

  • Kara Nortman, partner at Upfront Ventures
  • Carter Reum, partner and co-founder of M13
  • Ben Bergman, senior reporter at dot.LA

    Kara Nortman is a partner at Upfront Ventures

    ​Kara Nortman, Partner at Upfront Ventures 

    Kara is a Partner at Upfront Ventures, the largest venture capital firm based in Los Angeles. Some of her notable investments include Parachute Home, The Wing, Fleetsmith, Stem, Territory, Strive, and Qordoba. Before Upfront, Kara co-founded the children's e-commerce company Moonfrye and also spent seven years at IAC where she co-headed the M&A group and acted as the Senior Vice President and General Manager of Urbanspoon and Citysearch. During her tenure at IAC she oversaw the initial investment in Tinder. Earlier in her career, she also spent time at Morgan Stanley, Microsoft, and Battery Ventures. She received her AB in Politics from Princeton University and her MBA from Stanford University. Kara is also a founding member of All Raise, a VC-led group dedicated to increased diversity in funders and founders and serves as an advisor to the Women's National Soccer Team Players Association. Kara resides in Los Angeles with her husband and three daughters. @upfrontvc

    Carter Reum is a partner and cofounder of M13.

    Carter Reum is an Investor, Entrepreneur and Author 

    Carter and his brother Courtney are Partners and Co-Founders of M13, a full-service venture engine with offices in Los Angeles, New York and San Francisco. M13 executes a "founders first" focus to build and scale leading consumer technology companies. M13's holdco model consists of a $200M consumer tech fund, active support of its founding teams and a launchpad brand studio that incubates ideas into sustainable companies with partners such as P&G Ventures. With more than 80 direct investments and 16 exits, M13's prior investments total over $137B in enterprise value and includes Lyft, Pinterest, Ring, Daily Harvest, FabFitFun, Rothy's and more. The brothers began their careers at Goldman Sachs before launching their first company, VEEV Spirits, one of the fastest-growing independent brands and an early leader in sustainability and wellness. Carter is active in culture and arts as a member of the LACMA Board of Trustees, the digital advisory of The Metropolitan Museum of Art and an Executive in Residence for the City of Los Angeles. @M13Company

    Ben Bergman is dot.LA's senior reporter, covering venture capital.

    Ben Bergman, Senior Reporter at dot.LA 

    Ben Bergman is dot.LA's senior reporter, covering venture capital. Previously he was a senior reporter/host at KPCC, a producer at Gimlet Media and NPR and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to NPR and Marketplace and has written for The New York Times. Bergman was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. He enjoys skiing, playing poker, and cheering on The Seattle Seahawks. @thebenbergman

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    OpenAI's $6.6B Power Play: The Future of AI Just Got a Massive Boost 💰🚀
    Image Source: Open AI - Sam Altman

    🔦 Spotlight

    OpenAI is making some exciting moves! The company just completed a massive $6.6 billion funding round, pushing its valuation to an impressive $157 billion. Thrive Capital led the charge, with big names like Andreessen Horowitz and Founders Fund also joining in. This investment will allow OpenAI to further scale its operations and advance AI technologies like GPT-4 across various sectors such as healthcare, entertainment, and business.

    But that’s not the only exciting news. OpenAI has also secured an additional$1 billion credit facility, giving the company even more financial flexibility to execute its ambitious growth plans. This safety net ensures that OpenAI has the resources to scale safely and effectively while continuing to lead the AI space.

    AI is becoming integral to industries worldwide, and OpenAI’s products—like ChatGPT—are seeing rapid adoption. From education to enterprise solutions, the company is driving significant advancements in how AI is integrated into everyday life.

    Following Microsoft’s $10 billion investment earlier this year, this latest round underscores the market’s confidence in OpenAI’s potential. With its strong focus on responsible AI deployment and ethical scaling, the company is set to shape the future of AI in a way that benefits a broad range of industries and addresses global challenges.

    As AI evolves, OpenAI remains dedicated to pushing boundaries while ensuring that its innovations prioritize safety, scalability, and social impact. Keep an eye on this space—big things are on the horizon!


    🤝 Venture Deals

    LA Companies

    • Impulse Space, a Redondo Beach-based company specializing in in-space transportation services, raised $150M in Series B funding led by Founders Fund, bringing its total funding to $225M, to expand its team and advance production of its Helios and Mira vehicles. - learn more
    • Nusano has secured over $115M in Series C financing, led by The Wasatch Group, to accelerate the commercialization of its radioisotope production technology, aimed at improving cancer treatment and medical diagnostics. - learn more
    • Future Trash, a multidisciplinary creative studio, has raised a $5M Seed funding round from TIRTA and General Catalyst to develop original intellectual property (IP) within Fortnite, focusing on building unique in-game content and experiences. - learn more
    • XType, the leading software company for multi-instance management on the ServiceNow platform, has raised a $21M Series A funding round led by Norwest Venture Partners to accelerate innovation and expand its platform capabilities on the ServiceNow platform. - learn more
    • 3Laws Robotics, a robotics company focused on building AI-powered platforms to enhance the safety, security, and operational efficiency of robotic systems, has raised a $4.1M Seed funding round led by TenOneTen Ventures. - learn more

    LA Venture Funds
    • Watertower Ventures participated in the $8M Series A funding round for DocJuris, a leader in AI-based contract review and negotiation software that automates key tasks to streamline the contract process for enterprise teams and general counsels. - learn more
    • Progression Fund participated in a $3.7M Seed funding round for Permanent, a company focused on advancing sustainable agriculture by developing solutions that improve soil health and productivity. - learn more


    LA Exits

    • Loom, an educational community platform that empowers women by providing comprehensive resources on reproductive health, sexual wellness, and parenting education, has been acquired by women's health brand Perelel, marking a significant expansion in the women's health and wellness sector. - learn more

    Download the dot.LA App

    ⚠️📲🌩️ Your Digital Lifeline: Top Tech Apps for Natural Disasters

    Living in LA means being ready for anything—quakes, wildfires, crazy weather, you name it. Luckily, there’s a suite of tech apps designed to keep you informed, connected, and safe when disaster strikes. From real-time alerts to staying in touch with loved ones, these apps have you covered. Here’s the ultimate list to help you handle whatever chaos comes your way in LA County.

    Get Real-Time Alerts

    Image Source: MyRadar

    FEMA App
    • What it does: Provides real-time alerts from the National Weather Service, along with shelter and disaster recovery info.
    • Key features: Weather alerts, shelter locator, and preparedness resources.
    • Available on:iOS | Android
    MyRadar Weather Radar
    • What it does: Offers real-time, animated radar for tracking severe weather and storms.
    • Key features: Live radar, storm tracking, and severe weather alerts.
    • Available on:iOS | Android
    Clime: NOAA Weather Radar
    • What it does: Delivers real-time radar and weather updates, with wildfire and flood tracking.
    • Key features: Customizable weather alerts, disaster tracking.
    • Available on:iOS | Android
    American Red Cross Emergency App
    • What it does: Provides real-time alerts for over 35 types of emergencies, plus disaster preparedness tips.
    • Key features: Alerts, safety check-ins, and emergency tips.
    • Available on:iOS | Android
    My Earthquake Alerts & Feed
    • What it does: Sends real-time earthquake alerts, with maps and detailed data.
    • Key features: Earthquake alerts, customizable notifications, detailed maps.
    • Available on:iOS | Android
    Citizen
    • What it does: Delivers real-time alerts for emergencies, including natural disasters and crime near your location.
    • Key features: Safety alerts, live incident reports, and community updates.
    • Available on:iOS | Android

    Stay Connected with Loved Ones

    Image Source: Life360

    While social media apps like Facebook and X provide real-time updates, additional tools can help with communication and location sharing, ensuring you stay connected and safe.

    Nextdoor
    • What it does: Connects neighbors with real-time local updates on emergencies and community events.
    • Key features: Neighborhood alerts, local info, resource sharing.
    • Available on:iOS | Android
    WhatsApp
    • What it does: Enables secure messaging, location sharing, and video/voice calls with family and friends.
    • Key features: End-to-end encryption, location sharing, voice/video calls.
    • Available on:iOS | Android
    Zello Walkie Talkie
    • What it does: Turns your phone into a push-to-talk walkie-talkie for communication in low-signal areas.
    • Key features: Push-to-talk, works over Wi-Fi/data, group communication.
    • Available on:iOS | Android
    Glympse – Share Your Location
    • What it does: Lets users share real-time locations with family and friends without needing an account.
    • Key features: Location sharing, ETA updates, private tracking.
    • Available on:iOS | Android
    Life360
    • What it does: Tracks real-time location of family members and provides emergency SOS alerts.
    • Key features: Family location tracking, emergency alerts, crash detection.
    • Available on:iOS | Android

    Stay Mobile

    Image Source: PlugShare

    For navigating road closures and traffic during disasters, Google Maps and Waze are essential tools that offer real-time updates and alternate routes. Along with these go-to options, there are additional apps that can help you stay mobile when it matters most.

    GasBuddy
    • What it does: Locates nearby gas stations and provides real-time updates on fuel availability and prices.
    • Key features: Gas station locator, fuel prices, availability checks.
    • Available on:iOS | Android
    PlugShare
    • What it does: Provides a comprehensive map of public EV charging stations worldwide. It offers real-time availability, pricing, user reviews, and photos of charging stations, helping you find the best nearby options.
    • Key features: Real-time station availability, detailed station info, user reviews, and trip planning.
    • Available on:iOS | Android

    Traditional Preparedness Tips

    In addition to these tech apps, it’s crucial to prepare for natural disasters with traditional methods:

    • Build a disaster kit: Gather essential supplies like food, water, first aid supplies, and a flashlight.
    • Develop an evacuation plan: Determine where you will go and how you will get there in case of an emergency.
    • Keep emergency contacts handy: Make a list of important phone numbers.

    Maximize Battery Life and Data During Emergencies

    During disasters, power outages and increased network traffic can affect your device's battery life and data usage. Consider the following:

    • Keep your devices charged: Use portable or solar-powered chargers to extend battery life.
    • Conserve data: Use Wi-Fi hotspots when available to avoid excessive data charges.

    These apps are your go-to tools for staying informed, connected, and ready for anything in Los Angeles County. Whether you need real-time alerts, navigation assistance, or ways to keep in touch with loved ones, having these apps on hand can make all the difference when it matters most.

    Download the dot.LA App

    Luxurious Second Home Ownership without the Headache: How Pacaso is Changing the Landscape of Real Estate

    🔦 Spotlight

    Pacaso addresses the pain points of second home ownership, offering a luxurious, flexible, and financially sound alternative to traditional second homes and ultra-luxury hotels. Co-founded in 2020 by entrepreneur Austin Allison and former Zillow executive and prominent LA tech figure Spencer Rascoff, Pacaso, an unicorn startup, has redefined vacation home ownership with its unique co-ownership model. Rascoff's contributions to the LA tech scene extend beyond real estate; he also founded 75 & Sunny, an LA-based startup studio and venture fund, and co-founded dot.LA, an LA tech news and events company.

    LA residents adore Pacaso for its lush vacation destinations that also make for smart investments. Pacaso offers everything from serene weekend getaways in Aspen to sophisticated escapes in Paris. Each residence, valued between $200k to over $2M for 1/8th, boasts meticulous design, high-end furnishings, and premium amenities. Unlike traditional second home ownership, which involves high costs, maintenance, and underutilization, or ultra-luxury hotels, which lack the personal touch and investment potential, Pacaso's co-ownership model offers a superior solution. Co-owners enjoy the benefits of a high-end vacation home without the full financial burden and hassle of sole ownership, making it a smarter and more flexible choice for discerning buyers.


    Image Source: Pacaso

    Cabo, Mexico

    $822,000 (1/8th ownership)

    5 bds. l 5 ba. l 4,969 sq ft

    View Here


    Image Source: Pacaso

    Paris, France

    $600,000 (1/8th ownership)

    2 bds. l 2.5 ba. l 1,410 sq ft

    View Here


    Image Source: Pacaso

    Malibu, California

    $750,000 (1/8th ownership)

    3 bds. l 3 ba. l 1,880 sq ft

    View Here


    Image Source: Pacaso

    Park City, Utah

    $755,000 (1/8th ownership)

    4 bds. l 4.5 ba. l 2,584 sq ft

    View Here

    Head to Pacaso to learn more about its innovative co-ownership model that addresses the common challenges of second home ownership!


    🤝 Venture Deals

    LA Companies

    • Oak Essentials, the natural skincare brand founded by Jenni Kayne, has raised an undisclosed amount in Series A Funding from Silas Capital and Unilever Ventures. This investment will drive the brand’s expansion, focusing on product development, boosting marketing efforts, and expanding distribution channels. - learn more
    • Playhouse MD, an upcoming children’s healthcare platform that incorporates play to enhance health outcomes, has raised $4M in funding, according to a recent SEC filing. - learn more
    • FluidLogic, a high-performance hydration system provider, raised $15M in a Series A Extension led by Solyco Capital to support product development and innovation for adventure sports and outdoor endurance categories, with consumer products launching in early 2025. - learn more
    • Reflect Orbital, which uses in-space reflectors to direct sunlight to solar farms and large-scale lighting applications after sunset, has raised $6.5M in seed funding led by Sequoia Capital. The funding will help the company develop production vehicles and expand its team as it builds space-based energy infrastructure. - learn more

    LA Venture Funds
    • Smash Capital led a €20M Series B round into Vilnius-based Ovoko, an e-commerce platform for buying and selling used car parts across Europe, marking Smash Capital's first investment in Lithuania. The funds will support Ovoko's product development, market expansion, and team growth as it aims to dominate the European market for second-hand automotive components. - learn more
    • M13 led a $9M Series A Funding Round for Zenlytic, the world’s first self-serve business intelligence platform. - learn more



    LA Exits

    • Continuum Global Solutions’ healthcare vertical has been acquired by Everise, a customer service management company, enhancing Everise’s capabilities in pharmacy benefit management and expanding its growth prospects in the healthcare sector. - learn more
    • Radical Semiconductor, a company specializing in processing-in-memory technology, has been acquired by BTQ Technologies, a leader in post-quantum cryptography. This acquisition strengthens BTQ’s ability to secure data in the post-quantum era by integrating Radical Semiconductor's advanced technology portfolio. - learn more

    Download the dot.LA App

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