Launchpad LA Receives VC Funding: $50,000 Per Startup

Posted on Nov 8, 2011 | 40 comments


Launchpad LA today announces it will accept applications for its third class of Los Angeles-based tech startups. We have significant VC commitments (listed below) – every entering company will get $50,000 in funding, mentorship from top VCs and successful entrepreneurs plus free office space. For any company interested in applying  please visit the website.

History
For the past 2.5 years there has been an initiative in Los Angeles called Launchpad LA.

The goal for this organization is four-fold:

  • To provide mentorship for some of the most promising young companies based in Los Angeles or willing to relocate to LA
  • To give visibility to these companies to: Sources of funding (angels / VCs), business development partners, mentors who have themselves built successful companies, the press and potential employees to hire
  • To show these companies that they can remain in LA. There is a robust eco system, great leaders and the ability to build companies with enormous exits.
  • To provide an opportunity for VCs and senior executives to engage with the community by giving back rather than just attending more cocktail parties
Report Card

How has Launchpad LA done? 23 companies have gone through Launchpad LA. Of these 19 have received funding (10 have received significant amounts of VC funding) and 5 have been acquired (2 for more than $30 million). But the most important metric has been the deep and lasting relationships that  have been built with startups and also between senior executives. One senior mentor to Launchpad LA recently said,

“I got more out of Launchpad LA than I even put in. One of the people I mentored is now a senior executive at AOL in NY. And my company is hugely relevant to what they’re doing so having an advocate at senior levels there is certainly a help.”

We get feedback like this often.

 

So What is Different for Class Three?
The first two years of the program focused on education & mentorship. There were regular events where experts talked about: fund raising, term sheets, constructing a team, product development, establishing biz dev partners, M&A, dealing with the press, etc. This education will continue.

But this year there are two new components: funding & a facility.

Each company will receive $50,000. Several funds and firms are participating in this investment including Rincon Ventures, Idealab (Bill Gross built the original incubator and there will be active support from Allen Morgan), Baroda VenturesGRP Partners, David Cohen (founder of TechStars), David Tisch (founder of TechStars NY), DLA Piper and Stubbs Alderton.

Office space will be free and is in Santa Monica, walking distance to the Third Street Promenade.

Each local participating VC will base themselves out of this facility at least 1 day / week and plan to spend time actively with any company that is admitted into Launchpad LA.

There is also an amazing group of VC & Individual advisors who will help participate and steer the direction of Launchpad LA including:

VCs: 500 Startups, First Round Capital, Foundry Group, Menlo Ventures (Shervin Pishevar), MK Capital
Individuals: Jason Calacanis, Paul Kedrosky, Peter Levin (Principal, GeekChicDaily/Nerdist Industries), Howard Lindzon & Eric Ries

This is in addition to great mentors and this list keeps growing.

Superstar Sam Teller has joined to run Launchpad LA. He previously co-founded Charlie, a Los Angeles based media company and interactive agency

, where he worked on projects for Samuel L. Jackson, Tumblr, and Dick Clark Productions. Sam was also a member of Barack Obama’s presidential campaign and inaugural new media team and previously worked for Google, Credit Suisse, The Colbert Report, and Senators John Kerry and Hillary Clinton.  Sam was born and raised in Los Angeles and is thus a huge champion of the LA startup community. He received a BA from Harvard, where he was business manager of the Harvard Lampoon.

 

Adam Lilling will continue to be an active leader in running Launchpad LA. Adam played a hands-on role in helping many of our last class through funding and even took some board seats and advisory roles. Sam & Adam will be joined by Josh Webb who I have worked closely with and who formerly worked at Idealab.

But wait, does that make Launchpad LA an incubator now?
We always wanted to be seen as a “mentorship organization” where people are asked to give back to their community. But having an office space would allow us to spend more time together and also allow others when they’re visiting from out of town to have a place to hang out and to get to know some of LAs most promising companies. So we went ahead. And everybody seemed to want to see us have a fund so we’ll do that, too.

We sort of think of ourselves as an “accelerator” who provides strong education & mentorship.

There are at least 6 incubators now being set up in LA. Can the community support them? I use the words of one of the wisest men in this space who started much of this revolution, Bill Gross of Idealab who said:

 “I think that the more initiatives, the better … I think it’s the many initiatives and variety that make Silicon Valley, Silicon Valley and that we need to do more of that here.”

And we agree with that. If our community supports more potential entrepreneurs to try, if it funds more people with dreams, if it surrounds talented people with mentors, if it coaches them through their first deals and their team formati

on … that’s got to be a great win for society overall and for LA in specific.

 

So we’ll be supportive every initiative in town and doing all that we can in LA to encourage more tech entrepreneurship across any startup incubation or acceleration programs.

This is in addition to some great colocation facilities such as CoLoft.

Some recent funding & M&A successes:

Here are some examples of recent news from Launchpad LA companies. Not exclusive and in no order. All are big successes for LA. Some needed us more, some needed us less. All have become valuable contributors to the LA ecosystem and is what makes things here so great.

1. MovieClipsAnnounces $7m funding from MK Capital, Shasta Ventures, First Round Capital, SoftTech, VC and Felicis Ventures.

2. SometricsAcquired by American Express for a reported $30m after being funded by Greycroft Ventures & Steamboat.

3. CramsterAcquired by Chegg the leading online book rental company

4. TechForwardRaises $7 million from NEA & First Round Capital

5. PoseRaises $5 million in 2 rounds from GRP Partners, True Ventures, Mousse Partners & Founder Collective

6. GumGumRaises $11 million financing. CEO on front cover of Entrepreneur magazine.

7. DataPopRaises $2 million from Rincon Ventures, IA Ventures and others

8. Gendai GamesRaises $7 million from Steamboat, DFJ Mercury, DFJ Frontier, Greycroft, ff Ventures and others

9. Ranker - Raises $1.3 million from Rincon Ventures & Tim Draper

and so much more. MobileRoadie, TicketMob and many others.

Come be a part of our future success. Apply here or send this post to your friends who should apply. Or if you need to reach us our email is launchpadla@gmail.com

We look forward to working with you.

  • http://twitter.com/chrisdumler Chris Dumler

    Good to hear what’s happening, Mark. It’s good to hear more about Launchpad and the way it’s presented seems like a nice adjustment to the model (generally). It’s exciting to see this kind of early-stage development in LA. The question is not *if* all these accelerator/incubators can exist together in LA, it’s *how* they will do it in a way that positively benefits the ecosystem. 

    In a full calendar year, it seems like ALL of them are starting class in January of 2012. And this is where we have to really consider the impact on the ecosystem; the impact on entrepreneurs, on the mentors, on the capital, on the community, and on these programs themselves. Hopefully this is taken into consideration by all the stakeholders involved. It seems a bit tricky, but I’m convinced the minds behind these programs believe in LA and will develop their programs with care to grow it, so that they too will grow.

  • http://asalesguy.com Keenan

    Marc, 

    Putting a picture of Rifkin in the first spot, doesn’t set your post up very well.  :)  

    I’ve know Evan for 18 years. This time in 1993 we were in Turkey together.  Great memories.  

    Good luck with this years class.  I am a Techstars Boulder mentor and completely agree with your quote.  I get far more from them, than I give.  I almost feel guilty.   

  • http://byJess.net Jess Bachman

    Congrats on the $50k, certainly upping the ante.  

    For some reason I couldn’t find on the LaunchPad site just how much equity is taken from the company in the exchange.  You would think that LaunchPad’s take would be important and easy to find info.  Unless I am missing something completely here….

  • Mat Tyndall

    Very cool, if I get a cofounder by the deadline I just might apply, otherwise I’ll save you the time of reading a brilliant but unproven idea since team is so important for these programs. 

  • http://twitter.com/#!/georgelbowen George Lucas Bowen

    Mark, I love what you are doing in LA.  The Mentor and VC list is outstanding.  Really a great opportunity for local LA startups.  Thanks for your hard work.

  • Rishi

    Love it! More proof of “Silicon Valley is not a place, it’s a concept, a mindset…”. We need more such camps across the world…

  • http://twitter.com/LiveMyJourney Live My Journey

    Great post and even better news for encouraging people in LA to get into the “startup frame of mind”. It’s great to see VC’s, Angels and successful entrepreneurs coming together to support and encourage growth of startups in LA. Hopefully we can slow down the “brain drain” to Silicon Valley now.

    - Amit

  • http://bothsidesofthetable.com msuster

    Everyone is talking with everyone and we’re aware of the issue. We all want to find a way to be supportive. 2012 will be an interesting year – for sure. As Bill Gross said, let’s model ourselves on what made Silicon Valley succeed. More initiatives.

  • http://bothsidesofthetable.com msuster

    Oh, you’ll have to email me some good stories! Thanks for reaching out.

  • http://bothsidesofthetable.com msuster

    6%.

  • http://bothsidesofthetable.com msuster

    team, team, team. And must have tech. We’re starting Launchpad 4 mid next year so don’t sweat it. We already raised the money.

  • http://bothsidesofthetable.com msuster

    thanks, George.

  • Dogeye

    What are the terms of the $50k investment?

  • http://www.kidmercuryblog.com kidmercury

    hope you guys build a social network, get an online community going. i’m trying to build fred wilson a game where you earn badges, unlock a term sheet, get paid in virtual currency. that’s the next step in incubator innovation IMHO. with next year being 2012, i think we’re right on track. 

  • http://twitter.com/markgeller Mark Geller

    Congrats on the new class and the investment! I’m sure all the different programs will figure out how to work well with each other. If there is a bit too much bandwidth to start that would be fine–it may attract others who are passionate about startups to move to L.A., which is always a good thing.  Good luck.

  • http://www.linkedin.com/in/scottjhoward ScottjHoward

    Interested to see more ‘ecosystems’ emerge beyond the valley. We are working to build similar models that work in our locality (Toronto). For LaunchPad LA’s LPs what are the expectations around return on capital? Is it expected that $50k is mostly a deal-flow investment;  holding position for seed-seriesA follow-on rounds with the ‘winners’? Or is there a performance expectation on the pool making the $50k placements for 6% positions?

    LP expectations have created challenges to develop similar vehicles here in Canada, curious to get outside examples. LP feedback I have seen is that a fund placing $50k at a time is still expected to generate a venture style returns (ie. 25 placements from a $1.25m pool needs to generate 9 figures of returned value).  Is that realistic? 

    The other side, is developing a harder value proposition for Mentors. Beyond investment, has the LaunchPad team articulated methods for mentors to extract financial return from participation?   We are looking for more ideas on how to answer the ‘what’s in it for me?’ need with perspective mentors. 

    Love the blog Mark, thanks, 
    Scott

  • Marc Vassum

    Of common stock w/limited rights, like YC, or what are the terms?

    It _looks_ fishy that this info isn’t on the site, as Jess said.

  • http://www.desmo.org Stefan Portay

    Very cool! Excited to have Desmo apply!

  • http://www.alearningaday.com Rohan

    :)

  • http://www.alearningaday.com Rohan

    All the best, Mark.

  • http://www.beercartel.com.au Beer Cartel

    LaunchPad sounds like a great approach for help launch the new spark of an idea – if only we had a organization like that in Australia! All the best.

  • http://arnoldwaldstein.com awaldstein

    This is a big step, congrats Mark.

    I did some mentoring with Startl last summer in NY. Really satisfying. My experiences are here (  http://awe.sm/5Yube ).

    Good luck with this. A huge plus for the LA startup scene.

  • http://www.begun.ru/begun/collaboration/agents/detail.php?ID=3689 вебпромо

    It is a nice post.thank you.

  • http://bothsidesofthetable.com msuster

    Not “fishy” – is just something we’re working through so didn’t want to rush out there.

    Yes, common stock. Our view is that a combo of the cash, the mentorship / advice, the recruiting, the access to investors, etc. make 6% attractive.

    You can think of it as your board of advisors. And if being part of the program helps increase fund raising ability and price of your next round we think it will be a good investment for those the participate. In any event, we will work hard to make it so.

    Not for everybody. But for some – a great start.

  • http://bothsidesofthetable.com msuster

    slow down the “brain drain” to Silicon Valley 
    That’s a large part of the goal. LA is building great companies now. We want to work with Silicon Valley, not defect.

  • http://bothsidesofthetable.com msuster

    6%, common stock.

  • http://bothsidesofthetable.com msuster

    We will certainly try. Great ideas. Thanks.

  • http://bothsidesofthetable.com msuster

    thanks, Mark

  • http://bothsidesofthetable.com msuster

    Make sure to come by if you’re in LA!

  • http://www.kidmercuryblog.com kidmercury

    cool. i will holla back at you after i build the site for fred to try to sell you on that idea and how i can help you achieve those goals. just one more thing i wanted to add at the moment, which is that if you want to displace norcal and nyc and put socal on the map, you will need a disruptive strategy — and i think crowdfunding and game mechanics are the enabling technologies you can use to make that happen. 

  • http://twitter.com/davidsmuts David Smuts

    Effing cool Sus. This is exactly what local innovation is all about. LA is getting on the map. Credit to all involved with the LA Launchpad organisation!

  • http://www.kidmercuryblog.com kidmercury

    i hope you will consider the idea of defection; i think it would create greater value for everyone. i.e. google wasn’t born inside msft. 

  • http://twitter.com/LiveMyJourney Live My Journey

    I agree… From all the meetups I’ve been going to since moving here from Boston, seems like some great ideas and teams coming together to provide some real value to consumers.

  • http://hirethoughts.blogspot.com/ Donna Brewington White

    Come to Los Angeles, Kid.  We need you!

  • http://hirethoughts.blogspot.com/ Donna Brewington White

    I’m late to the party here.  Was on a plane to NYC when this came out — attending Fred and Joanne Wilson’s Meetup at USV.  The New York startup community is invigorating (even though many at the meetup were from outside NYC and a few even flew in from the West Coast).  

    I long to see continued developments in Los Angeles that take advantage of, encourage and empower the vast entrepreneurial talent in our midst — with its special brand of creativity cultivated by the Southern California ethos.  

    LaunchpadLA is exciting and I would love to be of support however I can!  If nothing else, I have passion and enthusiasm for entrepreneurs and startups — and high hopes for the LA startup ecosystem.  Look at what’s here already! 

    Mark, you are certainly helping to breathe life into the startup scene here, much beyond your work at GRP.   Thank you. And congratulations!

  • Gustavo Valenzuela

    My team will be submitting by Tomorrow night,

     Is there a particular profile you are looking for? Per example, do you prefer engineers
    and entrepreneurs with previous experience? we have an excellent web developer
    that has for the most part single handed the project by himself, but he does
    not have a  computer science degree.  Will the lack of an engineer in our team
    affect our ability to be selected?  We have
    the ability to bring engineers in the team, but that would mean giving up a
    significant share in the company.  I would
    rather wait to hire a engineers later on.

  • https://plus.google.com/u/0/b/114718778524214371963/114718778524214371963/posts kidmercury

    i was in LA earlier this year for a few weeks. santa monica is great, i love that place. pacific ocean is a big tease though, water is too cold. if you took LA — specifically santa monica — added a great public transportation system, and put it on miami beach, you’d have heaven. 

  • http://hirethoughts.blogspot.com/ Donna Brewington White

    From what I know of you — which admittedly has limitations — I can see you in Santa Monica. After a while you won’t miss the public transportation as much (but after my visits to NYC I can understand why this would be an issue). And a good wet suit can go a long way toward making the Pacific Ocean your friend. But, not thinking I’m going to win this one.

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  • Mark Anthony

    Dicover new startup ideas, disruptive new technologies and succesful business models @ 100mills Startups Database 2011. 

    Find out the latest list of VC-backed startups that raised millions in the year 2011.

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