Monday, July 23, 2012
Los Angeles Accelerator Report Card: Too Early To Tell
There's been a surge in startup accelerator activity in Los Angeles in the last year, as interest in starting a company in the region has grown, and a wide range of experienced entrepreneurs and investors have pitched in to help companies get to the next level. But, how are those accelerators doing so far in terms of attracting capital and attention to Southern California startups? Anecdotally, the effect has been positive -- coverage on this publication, as well as others has ramped significantly due to new startups in the region, both funded and unfunded, and there's been a number of successful venture and angel investments in companies associated with those efforts. However, what do the numbers say, even though it's but the first inning in the game?
socalTECH has analyzed its database of venture capital deals, exits, and other local deal activity, and started to come up with some tracking of the activity due to local accelerators, with some interesting results.
For our first measure, we tabulated the venture capital raised by accelerator firms--that is, companies that are tied to local accelerator/incubators. Capital raise ability is one of the ideas behind the whole trend towards accelerator--to help startups raise capital, who otherwise might have found it more difficult. Our analysis, taking announced venture capital and angel fundings, found that, even though it's early, there has been at least $132M in venture capital invested in companies involved in local accelerators. Of that, $97.47 in investments were in companies who had been involved in Launchpad LA, another $22.59M in companies involved with MuckerLab, and nearly $12.0M in companies associated with digital studio Science Inc.. Admittedly, our sample size is small, we're undoubedtly missing many unannounced funding round, and we have not yet amassed data for all of the accelerators/incubators/and the like in the region.
Our second measure was of the number of funding events (angel, venture capital, other funding) associated with companies out of the region. On that list, there were 60 funding events for LaunchpadLA, 12 for Muckerlab, and 10 for Science Inc, with not enough data on the other accelerator on our list yet tabulated, and some of those double-counting the investments of those various firms in their own portfolio of companies; we'll need to work further on refining our data collection on these before reporting more.
Finally, our third measure was of exit activity for companie out of those programs. Arguably, it's way too early for meaningful results, here, but we were surprised to find that there were six successful exits already out of LaunchpadLA -- undoubtedly linked to that group's longer history in the area -- and one out of AmplifyLA, of Look.io, which was just acquired a month ago.
The conclusion on all of this number crunching? That it's probably too early to tell, but that the accelerator activity has been having some influence on activity, coverage, and interest of investors in startups. Although our data set is limited (we are not fairly covering all of the accelerators yet in our data collection, and it's extremely early for most of them, which only started operations in the last few months or are still in the process of spinning up), it does seem to indicate that there has been a definite effect on helping at least some companies get to the next level in the startup process. Image courtesy Bigstock.