INSUBCONTINENT EXCLUSIVE:
From a geographical perspective, the San Francisco Bay Area and Los Angeles startup ecosystems are no longer separated by a few hundred
miles.
Top-tier VCs from SF visit LA regularly, and entrepreneurs raise from investors upstate and downstate in one process
Anecdotally, as an LA resident of 4 years, there been a palpable uptick of entrepreneurs from the Bay Area who move down here after exiting
to found their next company.
The City of Angels is a hub for a wide range of startups, but it has two major groupings: consumer-facing
startups that tap into Hollywood marketing culture, and the deep-tech ecosystem created by the city role as a hub for aerospace, defense and
R-D.
To track how the ecosystem for software and digital media startups here is evolving, I asked a few of the top consumer VCs based there
to share some of the trends they are most excited about investing in right now:
Kevin Zhang, partner at Upfront Ventures
Mike Palank,
managing director at MaC Venture Capital
Effie Epstein, partner at Sound Ventures
Brett Brewer, partner at CrossCut Ventures
Courtney Reum,
partner at M13
Ron Rofe, partner at Rainfall Ventures
Ryan Hoover, partner at The Weekend Fund
Dustin Rosen, partner at Wonder Ventures
Zach
White, principal at Sinai Ventures
The key takeaway is perhaps the diversity of their responses: investors here are going deep into trends
across the spectrum of consumer spending
Consumer health and transportation are mentioned, as they were in my surveys of VCs in London and in New York, but this group repeatedly
predicts a new wave of interactive, social media startups (albeit with different perspectives on what it looks like).
Kevin Zhang, partner
at Upfront Ventures
I&m a strong believer it the best time to be a game developer now
Every 10 years or so distribution shakes up, now giants like MSFT, Google, Sony, Epic, etc
are rushing in to shift gamers to subscriptions and cloud gaming, which means big exclusive content library building with lots of
&non-dilutive& capital for developers
Games themselves are becoming bigger, cross-platform, cheaper to build and more accessible than ever thanks to advancement in game engine
Related: there a new generation of mobile entertainment brewing at the intersection of short-form video, live, audience participation and
social play; it marrying what worked with UGC and live video with in-app-purchases and retention tactics of casual games to create more
accessible and bite-sized entertainment destinations.
Mike Palank, managing director at MaC Venture Capital
While it used to be that great
content alone made for a compelling entertainment experience, as we move into the future it will be the blending of great content and
amazing tech that will truly capture and retain people attention
We&ve seen those funny Youtube videos of babies swiping pictures in physical magazines showcasing their expectations that everything is
I think in much the same way, expectations around filmed media (movies + TV) will trend towards the interactive
We are seeing some truly interesting experimentation around interactive right now from companies like Netflix, Unrd, Eko, CtrlMovie,
Playdeo, Hovercast, Aether, Within, Twitch and others
The winners of the streaming wars understand this and I believe will supplement their content slates with interesting technology to make
the viewing experience unique and participatory (Quibi has already announced some examples of this)
At MaC, we are looking for those innovative companies that are re-thinking how consumers experience filmed entertainment to make it more
experiential, interactive and engaging.
Effie Epstein, partner at Sound Ventures
At Sound, we believe that investors have an enormous
responsibility to help shape the future we all want to see
To that end, we&ve been seeing a lot of promising innovation emerge around financial inclusion and digital healthcare
For example, Divvy Homes is a company that is making home ownership a possibility for the millions of Americans who struggle to afford a
down payment, and Affirm is giving consumers a fair alternative to credit cards in an age where Americans are more in debt than ever
Meanwhile, TruePill is making it easier and more affordable for end consumers to access medication by changing the way medicine gets
delivered, and Alma is making mental healthcare easier for consumers as well as for practitioners.
