Despite 2020 being one of the best funding years for SoCal startups in total dollars raised -- we eked by New York to take #2 spot in the US -- there is still a serious logjam when it comes to Series A rounds. In fact, this past year, despite additional new funds and little downward pressure on valuations overall, the region actually saw fewer startups raising early growth rounds; much of the funding bump was due to larger checks to later stage startups. That’s why we’re extremely excited to announce that the Alliance has partnered with Silicon Valley Bank to launch a new program called SoCal Venture Pipeline to help connect local startups ready for a Series-A round with growth stage venture funds from outside and inside SoCal.
The objective of the program is to help founders lacking the relationships and professional networks to access high quality venture capitalists who can provide the right kind of capital and expertise to help them grow their company. Without access to growth stage capital, early stage founders often get stuck -- not enough capital to grow their companies to their full potential so they are forced to take alternative sub-optimal paths that reduce their ability to bring their breakthroughs to the market and create massively successful companies. This systemic gap creates a downward drag on the entire region. Our hope is that by providing greater access to these vital networks, we’ll see more startups get Series-A funding. It logically follows that more successful companies will create more economic vibrancy for their communities and the region e.g. more high-paying jobs, talent attraction/retention to the region, etc. Now more than ever, we need to help local companies so they stay and grow right here in SoCal.
We’re all too aware that the size and breadth of the SoCal region also makes it difficult for investors to find startups here, especially if they’re from outside the area and don’t have deep connections to reliable deal flow -- the relationship gap works both ways. The SoCal Venture Pipeline program helps alleviate some of that usability problem by tapping into our diverse network of local community leaders across the region. We will rely on these local networks to drive awareness of the program and for local leaders to identify startups looking for Series-A funding with a commitment to finding diverse founders from anywhere in the region.
Once startups have been identified and submitted an application for the program, they will be reviewed by our investment committee who will vett the startup applications for investability and then identify appropriate investors from our network of over 400 VCs who would be a good match based on factors like technology, industry, business model and fit with their investment focus. This is a customized, personal introduction, so it’s important to note that this is a ‘quality over quantity’ oriented program that will take aim at removing some of the connectivity gaps in our region. A task we feel is right in our wheelhouse as a regional Super Connector.
What’s ahead: referring Series A ready companies
The Alliance and our partners will launch the program at the end of March, 2021. In the coming weeks we will solidify our vetted referral network that will help SoCal’s next breakout company get funded -- and we want you to be part of it.
- If you are an accelerator, incubator, experienced startup ecosystem player, and/or regularly work closely with great founders and startup teams who are “Series A ready” (or getting close to it) we want to work with you!
- If you are an angel investor, pre-seed, or seed investor that invests in SoCal companies, we want to hear about your great companies, their successes, and help them find their next raise.
- If you work with diverse founders, including those led by women and minorities, we definitely want to work with you! We need the startup investment to more closely reflect the diversity that drives SoCal innovation.
In short, if you are able to refer Series A ready companies we want you to be part of the program’s trusted referral network. Please contact our program lead Eric Eide (firstname.lastname@example.org).
Finally, we’re hiring for a Venture Outreach Manager to spearhead business development and help manage the program! Please get in touch if you, or somebody you know, wants to work closely with SoCal startup founders, startup ecosystem players, and investors, and help SoCal’s best companies find funding. Diverse candidates are strongly encouraged to apply.