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LA Tech & Venture Landscape Mark Suster

Final LA tech and venture landscape

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Page 1: Final LA tech and venture landscape

LA Tech & Venture Landscape

Mark Suster

Page 2: Final LA tech and venture landscape

2

Silicon Valley dominated the infrastructure phase of the Internet. In effect, they built the roads, bridges and airports required for trade.

Infrastructure

Servers, Switches, Routers, Databases, Browsers, Search

Page 3: Final LA tech and venture landscape

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The “Application Layer” (Three C’s) of the Internet favors cities like LA: Content, Commerce & Communications

Personal computing

Telecommunications

Open source software

Scalable computing & storage

Application Layer

Content Commerce Communication

Infrastructure

Page 4: Final LA tech and venture landscape

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The Internet is largely becoming a video platform.

Content Commerce Communication

<30 minutes / day 5.3 hours / day

Past: Text

Present: Video & Games

Future: Augmented & Virtual Reality

Page 5: Final LA tech and venture landscape

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Many of the best video startups in the country are being built in Los Angeles.

• Writers • Directors • Actors • Special effects • Sound • Stages • Costumes • Make-up • Talent • Creator tools

VerticalBroad

Content Commerce Communication

Page 6: Final LA tech and venture landscape

Content development companies are becoming

increasingly valuable

6

Content has become incredibly valuable as distributors compete for exclusive media.

OTT

Mobile Video

Web

Content Distribution

Content Commerce Communication

Page 7: Final LA tech and venture landscape

43M

31M

100M

13M

55M

7

LA has become a powerhouse in games. Several hundred millionaires will help create the next wave of innovation.

$1.6B 2015 revenues

$Bn++Valuation when acquired by Tencent

Monthly Active Players Viewers of 2016 Finals

Source: Forbes, Fortune

Content Commerce Communication

Page 8: Final LA tech and venture landscape

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Virtual Reality

VR/AR are in the first inning but LA will be a leading player in what will be a dominant computing platform in 5-10 years.

The same skills that led video startups to LA are the basis for VR successes

Content Commerce Communication

Page 9: Final LA tech and venture landscape

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LA knows how to create consumer brands and has the celebrities to promote them.

Historic Brands Internet Brands

Content Commerce Communication

Page 10: Final LA tech and venture landscape

Past Generation X

1.4B

10

LA owns how the next generation of people communicate and meet with each other.

CommerceContent

Millennials & Generation Z

410M Snaps per Day

71%of Users

are < 25 yo

150MDaily Active

Users

83%of Users

are < 34 yo

35minper Day In-

App by DAUs

Swipes per Day

Source: “Snapchat’s Daily Active User Count has Surpassed a New Mile Stone” Kia Kokalitcheva, Fortune 9/26/16

Source: “How Snapchat Demographics are Surprising Shifting in 2016” MediaKix Source: Tinder

Source: “Tinder Forecasts Rise in Paid Subscribers, Ad Revenue” AdAge, 6/3/2016Source: “Research says 30% of Tinder Users are Married” Stuart Dredge, Business Insider, 5/7/15

Communication

Page 11: Final LA tech and venture landscape

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The “Snapchat Effect” of a public Internet company in Los Angeles will be enormous.

Attracting talent to Los Angeles

M&A and Biz Dev

Many millionaire angels

Future founders post IPO

CommerceContent Communication

Page 12: Final LA tech and venture landscape

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Venture in LA

Page 13: Final LA tech and venture landscape

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LA is #3 largest tech ecosystem in the US…

Bay Area New York Greater Northwest Boston Chicago Austin DC Colorado

12%

2%2%2%3%4%4%

14%

24%

Los Angeles

Source: AngelList – startup companies by region as of July 31, 2014. Note: SoCal includes LA (69%), San Diego (15%) , Orange County (9%), and other areas (6%), Northwest includes Oregon & Washington. Silicon Valley includes San Francisco & Bay Area.

Page 14: Final LA tech and venture landscape

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…and is among the fastest growing.

Greater Northwest Chicago New York DC Boston Bay Area Colorado Austin

5.3%

3.8%3.9%4%4.1%4.4%4.5%4.6%4.7%

Los Angeles

Source: AngellList – startup companies by region by month. Note: Compound monthly growth rate of new startups by region from Jan 2014 to June 2014

Page 15: Final LA tech and venture landscape

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LA’s venture community has never been stronger and is growing rapidly.

Page 16: Final LA tech and venture landscape

[16

LA has done great at funding early-stage innovation. Increasingly we should also develop some late-stage local funding sources.

Source: CBInsights

Seed Series A Series B Late Stage

[ ] ]Los Angeles Funds Bay Area Funds

Page 17: Final LA tech and venture landscape

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LA advantages

Page 18: Final LA tech and venture landscape

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Greater LA has more top 25 engineering schools than anywhere else in the country.

Source: US News & World Report, Accreditation Board for Engineering and Technology (ABET); Includes graduate universities within 150 miles of metropolitan area

Page 19: Final LA tech and venture landscape

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Greater

Boston

Bay Area

New York

10,945

6,811

7,561

9,862

Los Angeles

Sources: US News & World Report, Accreditation Board for Engineering and Technology (ABET); Includes graduate universities within 150 miles of metropolitan area

And Greater LA graduates more engineers than anywhere else in the country.

Engineering Graduate Enrollment

Page 20: Final LA tech and venture landscape

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LA has an affordability advantage over SF or NYC…

Source: Council for Community and Economic Research Cost of Living Index (via bankrate.com Cost of Living Calculator)

Los Angeles San Francisco New York

$162K

$126K$100K

equivalent income

equivalent income

Page 21: Final LA tech and venture landscape

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…and a clear weather and lifestyle bonus.

Pleasant days: Days with (1) mean temperature between 55° F and 75° F, (2) minimum temperature above 45° F, (3) maximum temperature below 85° F, and (4) no significant precipitation or snow depth

Source: Kelly Norton, Kellegous.com “The Pleasant Places to Live” graphic & analysis using NOAA data

Page 22: Final LA tech and venture landscape

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LA has infrastructure advantages in trade and population.

of top 10 major ports in the US

3

$460B

import / exports per year

most populous city

#2

18.7M

Greater LA population

Trade Population

Source: Kyser Center for Economic Research International Trade Outlook – Los Angeles County 2016-2017, United States Census Bureau: Annual Estimates of the Resident Population for Combined Statistical Area, Estimate as of July 1, 2015

Page 23: Final LA tech and venture landscape

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LA has always been an entrepreneurial city

Gre

ater

Mia

mi

SF

Hou

ston

NYC

Atla

nta

Phoe

nix

Rive

rsid

e

Dal

las

Seat

tle DC

Bos

ton

Chi

cago

Phila

delp

hia

Det

roit

530

190200200240240

290310

350360360360400

440

490

Los

Ang

eles

Source: Kauffman Index of Entrepreneurial Activity, April 2014

Entrepreneurs per 100,000 People

Page 24: Final LA tech and venture landscape

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Fast growing tech ecosystem

The future is sunny in LA.

Growing venture capital community

Content, Commerce, Communications

Talent + Lifestyle

Page 25: Final LA tech and venture landscape

Thank you