Monday, April 7, 2014
Los Angeles Venture Investors Get Their Mojo Back
For several years, the phrase "Los Angeles Venture Capitalist" had almost become an oxymoron. Local investments funds have had issues raising their new funds, and venture investors had started to hunker down with their portfolios, waiting for some sign of a thaw in the exit environment. Now, it looks like that day has finally come, as the thaw has come to locally backed companies, with a rash of exits--many of them backed by local investors.
The filing of an IPO by Santa Monica-based TrueCar on Friday comes on top of a surge of exits: The IPO last week of The Rubicon Project on the NYSE; the acquisition of Maker Studios by Disney in a deal worth up to $950M; the acquisition of Burstly by Apple; the acquisition of Gravity for $90M by AOL; plus the $2 billion acquisition of Oculus VR by Facebook. The IPO of education company 2U also greatly benefited Los Angeles, with the company's extensive operations in LA, plus backing from former Redpoint Ventures' (now Archer Capital) investor Greg Martin.
Those exits have finally given local venture capital investors their mojo back -- with their longstanding faith in their portfolio companies finally paying off. Among the local investors finally seeing meaningful exits over the last few months are Clearstone Venture Partners (first investor in Rubicon Project); Upfront Ventures (TrueCar, Maker Studios, Gravity, Testflight); Anthem Ventures (first investor in TrueCar); Greycroft Partners (Maker Studios, Awesomeness TV); Rincon Ventures (Burstly); and Archer Capital (TrueCar, 2U).
Local venture capitalist Mark Suster--in a post "How I Got The Monkey Off My Back"--had even talked a few weeks ago about how he had even been getting public questions on Quora questioning the number of exits he had (or hadn't) gotten; the recent exits finally putting those questions to rest. However, the local venture capital community did get one big miss in the rash of exits: Oculus VR, whose biggest investors-- Andreessen Horowitz, Formation 8, Matrix Partners, and Spark Capital--do not have a local presence.