Deck from Andy Wilson's Friday Coffee Meetup presentation on The Alliance for Southern California Innovation.

1. The Alliance for Southern California
Innovation
By: Andy Wilson in collaboration with the Boston Consulting Group

2. About me: Innovation & start-up junkie
• Chapter 1: Corporate
• Helped lead a spin-out/take public from F50
• CIO of a NASDAQ traded F500
• Chapter 2: Start-ups & venture capital
• Hands-on with half dozen tech start-ups
• Invested in more than a dozen SoCal start-ups
• Chapter 3: Service
• Elected official: City Council of Pasadena
• First Executive Director of the SoCal Alliance
• Trained as an engineer (Dartmouth)
• Studied business & technology (Harvard)

3. Agenda
• BCG report on Innovation Ecosystems
o Ingredients for a great ecosystem
o League tables
o Details on specific benchmarks
• Challenges to SoCal
• The Opportunity
• The Alliance

4. The six ingredients of a great tech ecosystem
• Sufficient skilled human capital to start, run, and join startups
• Enough entrepreneurs with the confidence and momentum to grow the ecosystem over time
• Ample capital available to fund startups
• Investors with the right risk tolerance
• Strong intellectual property development, with a simple, efficient licensing process
• Universities integrated into the startup ecosystem
• Major (Fortune 500) companies with relevant domain expertise
• Companies able to generate entrepreneurs and spin out innovation
• Necessary professional services (such as legal, public relations, and recruitment) available for startups
• Sufficient physical space (coworking space and research labs) available
• A spirit of mobility and risk taking
• Sufficiently diverse ecosystem to adapt over time
Source: BCG analysis
Human capital
Financial capital
Strong university
system
Strong corporate
environment
Adequate
infrastructure
Culture conducive
to innovation

5. SoCal compared to leading tech ecosystems
4 1 - 1 10 4
5 1 7 8 7 11
4637 812 3400 765 7162 3175
45 2 1 13 36 17
$31 $6 $5 $29 $110 $21
Growing Growing
Well
established
Growing
Well
established
Human capital
Financial capital
Strong university
system
Strong corporate
environment
Adequate
infrastructure
Culture conducive
to innovation
Number of startups less than
five years old
VC investment, 2012–2016
($billions)
Number of research
universities
Fortune 500 headquarters
Number of "top 30" incubators
Hub maturity, diversity, "swing-
for-the fences" mentality
NY Austin Israel Boston SoCal2
Sources: Crunchbase; PitchBook Data; BCG analysis.
Note: Number of startups captures all startups as defined by Crunchbase, mostly technology focused and excluding nontech small businesses (such as restaurants and retail).
1. Bay Area encompasses Alameda, San Francisco, San Mateo, and Santa Clara Counties.
2. SoCal encompasses Santa Barbara, Ventura, Los Angeles, Orange, Riverside, and San Diego counties. Qualitative
ranking High Medium Low
Growing
Bay Area1

6. 118129
452
765788812
1,256
3,175
4,637
7,162
0
2,000
4,000
6,000
8,000
SoCal trails only Bay Area & NY in startups
1. Growth rate over approximately 3 years.
Source: Crunchbase
Raleigh
Boston
Seattle
SoCal
New
York
SLC
Denver
Total No. startups < 5 years old, by region (2017)
Bay
Area
Austin
Chicago
SoCal is 3rd in technology startups Los Angeles growing as fast as SV
0
2
4
6
8
10
0 1,000 2,000 3,000
Chicago
Austin
Seattle
Silicon ValleyBoston
Total # of startups < 3 years old in 2017
Approximate annual startup growth rate (%)1
Salt Lake City
Denver
San Diego
Los Angeles
New York
San Francisco
Riverside
Irvine
Santa Barbara
Raleigh
Other hubs
Southern California
Bay Area

7. SoCal attracting VC but fraction of NorCal
Note: VC investments only (inclusive of angel, seed, and Series A+); excludes PE
Source: Pitchbook venture deal database
60
40
20
0
80
2.5
North
Carolina
2.8
SLC
3.4
Boulder
5.0
Austin
VC Investment, $B
Santa
Barbara
0.7
IrvineChicago
5.8
San
Diego
7.0
Seattle
8.8
Los
Angeles
10.4
Boston
29.1
New
York
30.5
Silicon
Valley
47.4
San
Francisco
62.5
5.5
VC investment deal $ by city,
2012-2016
37 9 35 9 37 -3 -1 14 -1 5 26 7 11 2
+12 -3 +6 -2 +3 -2 -2 - -1 -1 - - - -
Investment $ CAGR,
'12-'16 (%)
US VC funding share
change, '12-'16 (p.p)
SoCalBay Area Other

8. $B
(# deals) Pre-seed Seed
Early-stage
VC
Late-stage
VC
Bay Area $2.0
~3,500
$4.1
~3,300
$31
~3,600
$71
~1,900
SoCal $1.9
~1,700
$1.2
~1,200
$7.3
~1,000
$10
~450
Note: funding data from 2012-2016. Early-stage = majority Series A deals. Late-stage = Series B+ deals
Source: Pitchbook, BCG analysis
1
Best Series A $ is local due to
hands-on nature of relationship
2
In short term, attracting more
large funds to SoCal difficult
• Initially best to better
engage NorCal firms in SoCal
deals
• Encourage local presence of
larger NorCal Funds
• Build-out SoCal native fund
population
~4x gap at critical stages
The Challenge: Early Stage VC
4

10. Majority of LA's "growth" comes from Snap deal
155208222227285286305314386
2,884
0
1,000
2,000
3,000
VC Investment, $M, 2012-2016
Entertainment
Software
Communication
Software
Personal
Products
Multimediaand
DesignSoftware
Financial
Software
Movies,Music
&Entertainment
MediaandInfo
Services(B2B)
Automotive
Application
Software
Social/Platform
Software
Note: Deal volume shown on left is based on deals during whole 2012-2016 period.
Source: Pitchbook venture deal database
$2.6B of $2.8B social/platform deal
activity attributable to Snapchat series F
funding round
Half of LA's top ten investment
categories are software
Four of the top ten investment
categories are related to
entertainment/media
Faraday Future with next-largest
investment after Snap with $300M
in 2015
Heal (on-demand doctors) drew the
next largest social/platform
investment after Snap $40M in
2016
Whisper and Headspace with
biggest app software deals of
$36M and $34M respectively
Key Insights
133 153 2 53 56 22 13 12 20 36
21 2.5 157 5.8 5.1 13 17.5 10.1 10.4 4.3
# of deals
Avg deal size
LA VC investments from 2012 to 2016 ($M)
Remaining nine top
categories ~$2.4B

11. 11
RANK COMPANY
1
2
3
4
5
6
7
8
9
10
$ RAISED
$450M
$135M
$109M
$75M
$75M
$65M
$64M
$60M
$55M
$50M
LARGEST LA VC DEALS IN 2017
RANK COMPANY
1
2
3
4
5
6
7
8
9
10
$ RAISED
$300M
$234M
$100M
$65M
$62M
$60M
$50M
$50M
$50M
$50M
LARGEST LA VC DEALS IN Q1 2018
SOURCE: CRUNCHBASE
The top-ten VC deals in LA took in $1.02 billion in Q1 2018 — just slightly shy of
the $1.14 billion raised in the top-ten LA rounds in all of 2017
@AMPLIFYLA

12. San Diego investment mostly healthcare & biotech
105111117
208240240
362380
1,206
1,503
0
500
1,000
1,500
2,000
VC investment, $M, 2012-2016
DiscoveryTools
(Healthcare)
Monitoring
Equipment
Therapeutic
Devices
Biotechnology
Pharmaceuticals
AlternativeEnergy
Equipment
EnergyProduction
Application
Software
Diagnostic
Equipment
DrugDiscovery
Note: Deal volume shown on left is based on deals during whole 2012-2016 period.
Source: Pitchbook venture deal database
SD VC investments from 2012 to 2016 ($M) Key Insights
114 63 92 20 16 3 8 13 18 4
13.2 19.1 4.1 18.1 15 80 26 9 6.2 26.3
# of deals
Avg deal size
Healthcare-related fields clearly an
area of strength
• Potential focus area for
investment to build competitive
advantage over other regions
Human Longevity's $220M 2016
funding round an outlier in
biotechnology, with no other
investments over $55M
Aragon Pharma and Rempex
Pharma had the largest drug
discovery investments at $88M and
$68M respectively
Biotech and drug discovery capturing
nearly 50% of SD dealflow and count

13. 97
0
100
200
300
400
500
Other
SoCal universities generate IP & collaborate
WA
112
MA
500
San
DiegoLos
Angeles
388
Bay
Area
288
Patents issued by region, 2015
Average
TX
291
UT
118
CO
85
NC
147
Note: 3 largest research institutions chosen for each region, as an approximation of patent output.
Source: Association of University Technology Managers, STATT database (2015)
3
3
3
3
4
4
5
8
8
11
12
17
18
22
23
39
42
0 10 20 30 40 50
Riverside|UCLA|Irvine|UCSD
UCSB|Irvine
UCSB|UCSD
Riverside|Irvine|UCSD
UCLA|USC
Riverside|UCLA
Riverside|Irvine
Irvine|UCSD
UCLA|UCSB
UCLA|CalTech
UCLA|UCSD
# DPWI Patent Families
(2012-2017)
Riverside|UCSD
UCLA|Irvine|UCSD
Sanford|Salk
CalTech|UCSD
UCLA|CalTech|UCSD
CalTech|USC
~485 patents from largest SoCal
universities ...
... many of them with 2+ assignees
from the region
# Patents with 2+ assignees
SoCal
Bay Area

14. $1,223B$242B
SoCal has fewer large corporations than NorCal
4
4
1
3
3
13
10
+19
Bay Area
36
2
2
2
SoCal
17
2
2
1
1
2
1
Other
Materials
Insurance
Consumer Products
Energy
Entertainment
Finance
Healthcare
Non-consumer Tech
Consumer Tech
Fortune 500 HQ location
(by region)
Fortune 500 companies with
HQ in SoCal
Revenue
SoCal corps
more evenly
distributed
across
industries

15. 3+
5+
Good starting point for SoCal tech infrastructure
Legal
Shared
Space
Regional
Promo.
Incubate &
Accelerate
Conference
Los
Angeles
Orange
County &
Riverside
San Diego
260+
10+
10+
Predictive
Analytics
Innovation
Summit
Tech Bio
Approx # of resources
80+ 10+
5+
5+
10+
30+
30+
200+
90+
20+
Note: logos intended to show representative sample of firms, not exhaustive

16. SoCal diverse but fewer experienced operators
0
50
100
150
Tech startup founders prior experience (%)1
12%
31%
47%
Bay Area
29%
59%
SoCal
22%
1. N = 200 sample size for each geography (SoCal and Bay Area).
Source: Innovation 2.0 Index, Crunchbase, Fortune 500
Los Angeles has high economic
diversity ...
... resulting in founders with industry
expertise, but potentially missing tech
/ how to scale a business
Cluster diversity = how evenly distributed
employment is across industries
"VCs describe SoCal as not enough CEOs to grow startups,
missing the mobility of Silicon Valley between companies"
- Alliance board interviews
100 = national average
Startup OtherBig Tech
84
109
131
187
0
50
100
150
200
SV
Cluster diversity (index)
LA SDSF

17. ​Mean annual wage ($K)
​Technical ​Management ​Support
​Mean
commercial
rent/square foot
​Combined labor and rent
​cost differential over
20 years ($B)
​New York ​$109 ​$159 ​$43.1 ​$76.1 ​$1.60
​San Francisco ​$123 ​$150 ​$47.4 ​$61.4 ​$1.61
​Washington, DC ​$108 ​$142 ​$44.0 ​$37.2 ​$.794
​Seattle ​$114 ​$131 ​$42.4 ​$31.9 ​$.490
​Denver ​$100 ​$136 ​$40.7 ​$26.3 ​$.266
​Los Angeles ​$96 ​$129 ​$40.6 ​$36.5 ​NA
LA offers a large cost advantage for start-ups
Sources: Bureau of Labor Statistics, CBRE, BCG analysis.

18. ​SoCal
​50
​Bay Area
​116
​2.3x
​SoCal
​$28B
​Bay Area
​$554B
​19.8x
No. of IPOs, 2012-16
Combined 2012-16 IPO
enterprise value, 2017
Source: Crunchbase, BCG analysis
​Los
Angeles*
​8
​San
Francisco
​190
​23.8x
Tech company density,
2017 (# / sq. mile)
The challenge: startup density + IPO’s
5

19. Major SoCal tech nodes of excellence
Santa Barbara
Electronics, manufacturing,
material science
West Los Angeles
Media and entertainment
(consumer tech, VR / AR)
Irvine
Medtech, cybersecurity
Riverside
Agtech,
transportation/distribution
San Diego
Health care, biotech, wireless
communications
Source: BCG analysis.
Pasadena
High-tech engineering, data
analytics
Burbank and Glendale
Media and entertainment
(content creation)
El Segundo
Aerospace and defense
(IT, space transport)
3

20. The opportunity
The SoCal region has the right conditions to be the next great tech hub
• #1 for tech PhDs and #2 for engineer grads
• Largest concentration of research universities (20)
• World-class IP (480+ patents in 2015), 80+ Nobel Prize winners
• Third most startups (3,175) and growing as fast as Silicon Valley (“SV”)
• SoCal leads in ethnic and professional diversity
Timing could not be better; Silicon Valley is saturated
• 2x more expensive to launch a startup in SV than 5 years ago
• Titans (FB, Google, Apple) consuming NorCal talent pool and resources
20

21. The Mission
To create the best conditions for more
blockbuster innovation companies in SoCal
21

22. Long term goals
22
1 Unify key SoCal and NorCal stakeholders: Solidify & Activate the Alliance
2 Educate influencers & rebrand region as leading hub: “Beyond Hollywood”
3 Create more great SoCal tech startups that break through series A barrier & beyond!

23. The Alliance Leadership: Unprecedented Unity
23
NorCal
Business
Leaders**
SoCal
Research
Institutions*
SoCal
Business
Leaders*
The
Alliance
CalTech, UCLA, UCSD,
USC, UCSB, UCI, UCR,
Sanford Consortium,
University of San Diego,
Harvey Mudd College
Derek Aberle (Qualcomm),
Michael Yanover (CAA),
Emmanuel Roman (PIMCO),
Marc Stern (TCW), Thomas
Gewecke (Warner Bros.), Sherry
Lansing (Paramount Pictures),
Gene Sykes** (Goldman
Sachs, LA28 Olympics), Scott
Wolfe (Latham & Watkins),
Elizabeth Blackburn (Salk
Institute), Michael Abrams
(Disney)
Jeff Henley (Oracle), Eric
Schmidt (Alphabet/Google),
Greg Becker (Silicon Valley
Bank), Larry Sonsini (Wilson
Sonsini), Ted Eliopoulos
(CalPERS)
Steve Poizner (Chairman), Andy Wilson,
Steve Gilison
Pro-bono assistance from:
Boston Consulting Group (Strategic
Planning), Latham & Watkins (Legal),
Envoy + Bulldog (Brand/Marketing), E&Y
(Tax), Edelman (PR)
*On the Alliance Board of Directors ** On the Alliance Advisory
Council

24. See inclusion as part of advantage!
We believe that engaging diverse people is critical to
meeting industry demand for talent and that the
greatest technological and scientific challenges
facing society are best addressed when diverse
groups of individuals—with unique perspectives and
lived experiences—work together to explore, develop
and implement innovative solutions.
*From the Alliance’s statement of principles
24

25. Jan Feb Mar Apr May July Aug SepJune Oct
Launch Alliance
+ BCG report
Goal:
Lay-out the fact
base & start to
tell the SoCal
story.
(March 21)
Innovation
Showcase in NorCal
Goal:
Shock & awe!
Educate & engage
key thought leaders.
Expand the SoCal
narrative.
(May 24)
2018 Program Plan: From Cradle through Series A
First Look
SoCal
Goal:
Showcase 30 of the
best new tech-
transfer/spin-outs
across: life
sciences, computer
sciences & physical
sciences.
(June 20)
Start-up
Competition
Goal:
Shark tank
format to
showcase best
Series A &
beyond.
Drive funding &
deals.
(Late fall)

26. http://www.alliancesocal.org/events/
Two marquis event targeted to NorCal & SoCal VC’s, angel & seasoned operators/CEOs

27. 27
The importance of
venture capital to
SoCal's economy
Investment Jobs
Employment
rate
Increasing VC investment in SoCal from 7% to 25%– 40% of
Silicon Valley’s levels by 2025 would result in...
137K – 250K
Direct new job creation
$21B –$40B
Incremental increase in
funding across all stages
Multiplier
effect
1.3% – 2.5 %
Increase in current
employment
4.3x – 5x
Additional potential jobs
in the service economy
Source: BCG analysis.

28. Full BCG Report
Stars Aligning
How Southern California Could Be the Next Great Tech Ecosystem
https://www.bcg.com/publications/2018/stars-aligning-southern-california-next-
great-tech-ecoysystem.aspx

29. The Alliance for Southern California Innovation (the
“Alliance”), formed in 2017 by serial entrepreneur and
public servant Steve Poizner, has successfully brought
together the heft of Southern California’s top research
institutions, local business leaders, and world-class advisors
to focus on bridging critical gaps in the SoCal ecosystem.
The goal of the Alliance is to nurture and accelerate the
growth of Southern California’s technology and life sciences
innovation ecosystem.
29