VC Sentiment Survey: Valuations Reach Record Highs As Optimism For a Recovery Remains Solid

Sarah Favot

Favot is an award-winning journalist and adjunct instructor at USC's Annenberg School for Communication and Journalism. She previously was an investigative and data reporter at national education news site The 74 and local news site LA School Report. She's also worked at the Los Angeles Daily News. She was a Livingston Award finalist in 2011 and holds a Master's degree in journalism from Boston University and BA from the University of Windsor in Ontario, Canada.

VC Sentiment Survey: Valuations Reach Record Highs As Optimism For a Recovery Remains Solid

Venture capital dollars are flowing into Southern California startups at a record pace and it's paying off for top Los Angeles investors who are riding the wave.


Valuations jumped in the second quarter for more than half of the investors surveyed in dot.LA's quarterly poll of top Los Angeles venture capitalists — while optimism remained high about the economic recovery.

"It was almost like we ended 2020, we all survived, the vaccine came out, there was a light at the end of the tunnel," said Petra Griffith, founder of Wedbush Ventures, an early-stage venture fund that invests in seed and pre-seed stage companies. "There was a lot of bullishness in the market, it felt like a lot of momentum in the market overall that also spilled in seed stage."

She said while valuations bumped up, she felt the pace slowed down a little bit in the second quarter.

VC investment in the second quarter for the Los Angeles-Long Beach area totaled $8.5 billion, spread across 365 different deals. That's down from Q1's $9.4 billion, but still more than double the investment from the same time period last year ($3.9 billion), according to a National Venture Capital Association and PitchBook report.

And megadeals of $100 million are becoming more common.

Eric Manlunas — another early-stage investor who is also founder and managing partner at Wavemaker — said he's definitely seeing a fair amount of valuation in part because entrepreneurs are seeing inflation happening and the perception is that everybody is more valuable now.

"Some of them are very stubborn about it and they won't budge, and they'll pick and choose term sheets and they'll take their time and they're optimizing for valuation, which I don't blame them for," he said. "Unfortunately, for early-stage investors, we don't like it when things get out of hand, which we think they are, but it is what it is, and you've got to just pick and choose your battle."

Dustin Rosen, founder and managing partner of Wonder Ventures, said valuations reached new highs in the first quarter for him as the pace of deals continued for him into the second quarter. "I wouldn't say it went any higher or sped up, but it certainly didn't slow down," he said.

All of the 33 investors who took the survey said they saw employee headcounts increase last quarter and more hiring is on the horizon among their portfolio companies, though some said they're having trouble retaining employees.

As more capital flows into tech, companies are expanding their teams resulting in more hiring.

Mark Mullen, co-founder of Bonfire Ventures, said his portfolio companies are having a harder time hiring because of fierce competition among tech companies for talent.

"There are more companies getting funded and therefore those companies need to hire more people, but there's more capital at all these companies so they have the ability to perhaps pay more or offer incentives, there's a lot more people offering more," Mullen said.

While smaller firms were always competing against the Amazons and Netflixes, now the entire ecosystem is competing against each other, he said.

Shamin Rostami Walsh, managing director at BAM Ventures, said she is also seeing more difficulty in hiring.

"There are certain roles that almost all portfolio companies need and lots of optionality for the most talented," she said.

"I find that it's harder to find the right person, but people are doing their homework and weighing the options, so once they do accept a role, they stick around the same way they would have historically."

The second quarter hasn't changed most investors's minds about the speed of economic recovery as the effects of the pandemic wane. Although it is noteworthy that the survey was conducted before L.A. County's public health department reinstated its indoor mask mandate.

Manlunas, who calls himself a pathological optimist, is more hopeful. He believes we are heading into the 21st century version of the "Roaring 20s."

"The pent up demand is driving a lot of unusual behavior," Manlunas said. "On the upside, there's a lot of forced savings that's being unlocked right now, being spent on experiences, being spent on material things, being spent on consumer goods," which could lead into a virtuous cycle.

"What the lockdowns have done and what the pent up demand have done, is it could be a nice kick in the butt, so to speak, to jumpstart a nice economic cycle."

"Let's hope it doesn't end like the 1920s," he added.

Most investors surveyed said they're allowing employees to work both in the office and at home using a hybrid model, while 11% are planning on staying remote and 22% said they've already returned to the office.

About 12.6% of new job postings are remote-friendly in Los Angeles

Many workers are quitting rather than working out of an office and many tech companies like Apple and Google, are taking a hybrid approach rather than a full return to the workplace.

While valuations are high, it's not preventing deals from closing. Only three investors said they made fewer deals in the second quarter.

While there has been a record number of VC investment, Krisztina "Z" Holly said it hasn't changed the way Good Growth Capital, which specializes in early-stage complex science and technology startups, invests.

"We do the same due diligence. We have a huge number of great deals coming in the door, we just add a lot of value, it hasn't changed how much we can invest," Holly said.

Looking ahead, Griffith said she is excited to see what the third quarter brings given the creativity she is seeing coming out of Los Angeles.

"It feels like there are a lot of really interesting companies in L.A. that took the last six to nine to 12 months to do research and validate the target market and I've seen a lot of interesting companies in the last six weeks to two months," she said.

"I hope that this is not an aberration, but a larger trend and I'll be curious to see how the next quarter or so plays out."

How to Navigate LA Tech Week 2026

🔦 Spotlight

Happy Friday, Los Angeles.

Next week, hundreds of tech events will take over the city, bringing founders, investors, engineers and creators together from October 12 through 18.

Calling LA Tech Week a conference does not quite capture the experience.

Presented by Andreessen Horowitz, Tech Week is a decentralized collection of panels, workshops, demonstrations and gatherings hosted independently by startups, venture firms and technology companies. There is no convention center or central stage. The programming stretches from Santa Monica and Venice to Culver City, Downtown, El Segundo and beyond.

In other words, the city is the venue.

AI remains the dominant theme for 2026, appearing across enterprise software, healthcare, finance, media and the creator economy. The schedule also reflects industries where Los Angeles has built a particular advantage, including aerospace, defense, robotics, advanced manufacturing, entertainment and consumer technology.

That range is what makes LA Tech Week distinct. It brings together the software companies shaping what comes next with the industries that already define Southern California.

The challenge is deciding where to show up.

Our advice: apply early and organize your schedule by neighborhood. Crossing from Santa Monica to Downtown may look manageable on a calendar created by someone who has never driven in Los Angeles.

To help you spend more time meeting people and less time crossing the city, we have organized each day’s events by location:

You can also browse the complete official LA Tech Week calendar.

Plan carefully, but do not fill every minute. The best conversation of the week may be the one that was never on your calendar.

More from this week’s LA startup and venture scene below.

🤝 Venture Deals

    LA Companies

    • El Segundo-based Gallatin AI raised a $50M Series A from new and existing investors including 8VC and Silent Ventures, bringing its total funding to $70M. The defense technology startup will expand its engineering team and advance Navigator, an AI platform that helps U.S. military units coordinate vehicle readiness, supplies, medical logistics and other mission-support operations. - learn more
    • Pasadena-based quantum computing startup Oratomic raised a $475M Series B at a $5.4B valuation, just three months after its Series A. ARCH Venture Partners, Spark Capital, Khosla Ventures, Index Ventures, General Catalyst and Bezos Expeditions co-led the round, bringing Oratomic’s total funding to $775M as it works toward a commercially viable, fault-tolerant quantum computer by 2030. - learn more
    • Torrance-based Fortastra raised a $30M Series A led by First In, with participation from Upfront Ventures, Space Capital, Rsquared, Side Door Ventures, ATX Ventures and existing investors. The company will use the capital to develop its next-generation maneuverable spacecraft, expand its engineering and operations teams and scale production of systems designed to protect critical assets in orbit. - learn more
    • Parallel Systems raised a $100M Series C led by AVP, with participation from Hillspire, Agility Global, Cobalt Capital, Anthos Capital, Congruent Ventures, Riot Ventures and Collaborative Fund. Founded by former SpaceX engineers, the company will use the funding to scale production and commercial deployment of its autonomous, battery-electric Panther rail vehicles, which are designed to make short-haul freight more competitive with trucking. - learn more
    • Gaming studio Gardens Interactive secured more than $35M in a Series B led by Lightspeed, with participation from Sequoia Capital, Index Ventures, Accel, Innovation Endeavors, Zenith Capital and other investors. The company will use the funding to launch and operate its debut social role-playing “strandbox” game, an evolving multiplayer world shaped by players’ actions and interactions. - learn more
    • Outer Spaces raised an $8M pre-seed round led by Upfront Ventures, with participation from Unlock Venture Partners, Mucker Capital and Genius Ventures. The startup is developing outdoor furnishings with integrated solar panels and batteries, turning backyards into sources of clean energy and backup power. - learn more
    • Furientis raised a $25M seed round led by Benchmark at a reported $125M valuation, following a $5M pre-seed announced in May. The defense startup will use the capital to scale production of lower-cost missile interceptors designed to be assembled quickly with readily available components, with a long-term goal of producing 1,000 systems annually at each factory. - learn more
    • Hiyo raised a $20.8M Series B led by Constellation Brands, with returning investor Live Nation also participating. The nonalcoholic beverage company will use the funding to expand its adaptogen- and nootropic-infused social tonics across more than 13,000 retail locations while growing its presence at hospitality venues and live events. - learn more
    LA Venture Funds
    • Navitas Capital participated in Vesta’s $30M Series B, which was led by Conversion Capital and included backing from several major mortgage lenders and financial institutions. The company will use the funding to scale its AI agents across mortgage origination, automating tasks such as application reviews, underwriting decisions and closing-document checks. - learn more
    • MTech Capital led Nettle’s oversubscribed $4.8M seed round, with participation from Project A Ventures, Sure Valley Ventures, Portfolio Ventures and Ventures Together. The insurtech startup will use the funding to expand across the U.S. and Europe while growing its AI platform, which helps commercial insurers identify property risks, accelerate inspections and generate reports. - learn more
    • Bonfire Ventures doubled down on Santé by participating in the company’s $15M Series A, which was led by FINTOP and included other returning investors. The New York startup will use the funding to expand its AI-powered operating system for independent wine and liquor stores, which combines point-of-sale, e-commerce, payments, inventory and marketing tools in one platform. - learn more

    LA Exits

    • Winnow Solutions was acquired by Marina del Rey-based Spring Labs, with financial terms undisclosed. Winnow’s attorney-built library of more than 100,000 state and federal regulatory requirements will become a core part of SpringGRC, helping financial institutions connect changing laws directly to their compliance policies, controls and workflows. - learn more

      Download the dot.LA App

      LA Tech Week 2026: Sunday’s Event Lineup

      🔦 Spotlight

      LA Tech Week 2026 closes Sunday with one final day of events across Los Angeles. We have organized the remaining lineup by neighborhood so you can finish the week with a few last conversations before everyone returns to their regularly scheduled inboxes.

      ARTS DISTRICT

      12:00 PM

      CARSON

      12:00 PM

      CULVER CITY

      9:00 AM

      • Women in Cleantech & Sustainability Hike and Network: See Details Here
        Women in Cleantech & Sustainability

      6:00 PM

      • Founders pitch competition: See Details Here
        Biomorphix solutions, Nightingale regenerative

      HOLLYWOOD

      10:00 AM

      4:00 PM

      • AI International: Film, Music Video & Micro-Drama: See Details Here
        AI International Film Festivals

      MID CITY

      1:00 PM

      OTHER

      12:00 PM

      • ORGANIC LIFE LABS™ PRESENTS THE ALIGNMENT LAB: The Science of human performance: See Details Here
        The Blue Room Collective

      SANTA MONICA

      8:00 AM

      1:00 PM

      6:00 PM

      SOUTH LA

      2:00 PM

      • Future Builders : Family STEM Day: See Details Here
        Black L.A. Tech Week (Community Collective)

      VENICE

      10:00 AM

      12:00 PM

      • How to Raise Funds to Fund Any Business Using Digital Products.: See Details Here
        DN Events

      VIRTUAL

      5:00 PM

      WEST HOLLYWOOD

      3:00 PM

      Each session provides unique opportunities to gain insights, network, and explore various fields of tech innovation. For updates or more event information, visit the official Tech Week calendar.

      Download the dot.LA App

      LA Tech Week 2026: Saturday’s Event Lineup

      🔦 Spotlight

      LA Tech Week 2026 heads into the weekend Saturday with more opportunities to learn, meet fellow builders and explore what is being created across the region. Browse the day’s events by neighborhood below and find the gatherings worth leaving the house for.

      ARTS DISTRICT

      5:30 PM

      BEL AIR

      5:00 PM

      CULVER CITY

      10:00 AM

      1:00 PM

      4:00 PM

      DOWNTOWN

      11:00 AM

      2:00 PM

      • South Asians in Space, Physical AI: See Details Here
        american south asian network

      5:00 PM

      7:00 PM

      HOLLYWOOD

      8:00 PM

      INGLEWOOD

      10:00 PM

      LONG BEACH

      10:00 AM

      12:00 PM

      LOS FELIZ

      8:30 AM

      • Griffith Observatory Hike with Longevity Cities & Don't Die LA: See Details Here
        Longevity Cities

      MALIBU

      5:00 PM

      MARINA DEL RAY

      9:30 AM

      • The Brazen Capital Walk: Connecting Women, Capital & Opportunity: See Details Here
        BrazenEra

      6:00 PM

      • Build an AI workflow editor, natively in Angular: See Details Here
        Workflow Builder

      SANTA MONICA

      7:00 AM

      • Founders Running Club Run in Santa Monica: See Details Here
        Founders Running Club, MongoDb

      9:00 AM

      • MOLTEN - Spatial hackathon (ElevenLabs, AssemblyAI, Rokoko, Datafeel...): See Details Here
        Field Lab

      2:00 PM

      3:30 PM

      6:00 PM

      7:00 PM

      SOUTH LA

      7:00 PM

      THE VALLEY

      7:30 PM

      UCLA

      11:00 AM

      USC

      9:00 AM

      10:00 AM

      10:30 AM

      VENICE

      8:00 AM

      • Open Air Health Tech: See Details Here
        Open Air Health Tech, Bowshock, Govitamins App

      10:00 AM

      10:30 AM

      11:00 AM

      12:00 PM

      6:00 PM

      • Bots, Bytes & Bubbles Benefit: See Details Here
        Distinguished Minds Institute dba thinqueBytes®

      VIRTUAL

      9:00 AM

      • Ask a VP of Sales: Live GTM Office Hours for Early-Stage B2B Founders: See Details Here
        Kat Rucker Consulting Group

      11:00 AM

      WEST HOLLYWOOD

      11:00 AM

      • The 10x Engineer Showed Up. The 10x Organization Didn't.: See Details Here
        Workflow Builder, Tentaro

      3:00 PM

      WESTSIDE

      11:00 AM

      2:00 PM

      • Graphic Design & Digital Printing Meetup: See Details Here
        Big Frog Custom T-Shirts & More of West LA

      7:00 PM

      WESTWOOD

      12:00 PM

      Each session provides unique opportunities to gain insights, network, and explore various fields of tech innovation. For updates or more event information, visit the official Tech Week calendar.

      Download the dot.LA App

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