How San Diego has become a premier tech startup city, and information about local resources including incubators, accelerators, university resources, co-working spaces, and funding sources, along with tips for getting started
2. SPECIAL THANKS TO
UCLA Anderson Office of Alumni Relations
UCLA Anderson Alumni Panel: Tracy Stevens, John King, and Grai Andreason
EvoNexus
Eric Otterson, UCLA Anderson ‘96, Managing Director, Silicon Valley Bank
Mike Krenn, San Diego Venture Group
Michael Lawless, UCLA Anderson ‘80, Director of Entrepreneurship Initiatives, USD
Lynsey Fitzpatrick, Office of Innovation and Commercialization, UCSD
3. WHO IS JASON?
Product, UI, workflow
Simplification of the complex
Platforms, consumer data, marketing tech
CAREER:
INTERESTS:
EDUCATION
CONSULTING:
STARTUP COMMUNITY INVOLVEMENT:
4. WHAT DO YOU WANT TO LEARN TODAY?
Is San Diego a
good place for
startups?
How is the San Diego
startup community
changing?
Isn’t it better to be in
Silicon Valley?
Where do I get help
starting a company
in San Diego?
Where do I find
interesting startups in
San Diego?
How do I get my
company funded in
San Diego?
5. WHAT MAKES A COMMUNITY STARTUP FRIENDLY?
UNIVERSITIES
Talent
Ideas & IP
BIG TECH
COMPANIES
COMMUNITY FUNDING
Spawn
startups/experie
nced employees
Buy and fund
startups
Support for new
business models
(e.g. Lyft/AirBnB)
Supportive
organizations &
government
Diversity
Wealthy
entrepreneurial
individuals to
provide angel
funding
Venture capital
community
6. SAN DIEGO CONTINUES TO MOVE UP
US Chamber Of Commerce
Startup Friendly City Rankings October 2017
Source: Innovation that Matters, US Chamber of Commerce, October 2017
Involved city and university leadership
pushing startup friendly initiatives
Improved connectivity
Improved access to talent
Improved funding access (thanks in part to efforts by
Mike Krenn and the San Diego Venture Group)
One hour and $79 from Silicon Valley
2017 RANK
CHANGE
SINCE 2016
Boston 1 0
Bay Area 2 0
Philadelphia 3 ▲5
San Diego 4 ▲1
Austin 5 ▲1
Atlanta 6 ▲15
Dallas 7 ▲12
Seattle 8 ▲3
New York 9 ▲1
Portland 10 ▲2
7. SILICON VALLEY IS BECOMING MORE CHALLENGING
Source: Innovation that Matters, US Chamber of Commerce, October 2017
CONNECTIVITY
SPECIALIZATION
CAPITAL
CULTURE
TALENT
DENSITY
San Diego
CONNECTIVITY
SPECIALIZATION
CAPITAL
CULTURE
TALENT
DENSITY
Bay AreaRANK 4th RANK 2nd▲1 PLACE FROM 2016 UNCHANGED FROM 2016
Bay Area has:
Undisputed tech industry capital
Home of biggest VCs
But challenges for Bay Area
startups are growing:
High cost of real estate
Ambivalent communities
Lack of diversity
Traffic / spread out
2016. 2017
8. MULTIPLE TECH INDUSTRIES HAVE HOMES HERE
Sorrento Valley / UTC area had
the most funded startups
More than half in Life Sciences
La Jolla
Hardware & life sciences
Downtown
Software
Published in Connect San Diego Innovation Report 2016
10. VC ECO-SYSTEM RANKING
Not surprising to see Silicon Valley and other prominent geographies like New
York and Boston on top...
Source: Peter Lee, Embark Ventures presentation, October 2017
METRO
TOTAL VC
INVESTED
TOTAL VC
FUNDS RAISED
VC INVESTED/
FUNDS RAISED
NET OUTSIDE
VC CAPITAL
Silicon Valley 144.7 153.1 95% -24.6
New York 33.9 43.6 78% -9.7
Boston 30.7 41.2 75% -10.5
Los Angeles 21.3 2.7 789% 18.6
San Diego 9.4 1.5 627% 7.9
Seattle 8.4 7.6 111% 0.8
Chicago 8.3 3.4 244% 4.9
Washington DC 8.2 4.8 171% 3.4
Austin 6.6 1.9 347% 4.7
Philadelphia 4.8 3.0 160% 1.8
11. LA AND SD HAVE THE BIGGEST OPPORTUNITY
...but the more interesting story is how more outside money is flowing into LA
and SD from outside vs any other region
METRO
TOTAL VC
INVESTED
TOTAL VC
FUNDS RAISED
VC INVESTED/
FUNDS RAISED
NET OUTSIDE
VC CAPITAL
Los Angeles 21.3 2.7 789% 18.6
San Diego 9.4 1.5 627% 7.9
Austin 6.6 1.9 347% 4.7
Chicago 8.3 3.4 244% 4.9
Washington DC 8.2 4.8 171% 3.4
Philadelphia 4.8 3.0 160% 1.8
Seattle 8.4 7.6 111% 0.8
Silicon Valley 144.7 153.1 95% -24.6
New York 33.9 43.6 78% -9.7
Boston 30.7 41.2 75% -10.5
Source: Peter Lee, Embark Ventures presentation, October 2017
12. THE MONEY IS FLOWING IN
Published in Connect San Diego Innovation Report 2016
San Diego VC Investment by Stage of Company Development
AmountofVCInvestmentinMillionsofDollars
Record $1.5 billion in venture
funds raised in 2016
Up from the previous record
of $1.2 billion in 2015
Does appear to be a move
away from seed funding
toward larger deals for
ventures with more traction
Change
from 2015
0
100
200
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016
Seed Stage Early Stage Expansion + Later Stage
-56%
+120%
+3%
$65M,
16 Deals
$40M,
10 Deals
$33M,
5 Deals
$18M,
8 Deals
$135M,
18 Deals
$59M,
22 Deals
$338M,
41 Deals
$512M,
42 Deals
$345M,
44 Deals
$394M,
41 Deals
$320M,
37 Deals
$525M,
58 Deals
$601M,
57 Deals
$355M,
50 Deals
$393M,
50 Deals
$734M,
50 Deals
$757M,
45 Deals
$708M,
50 Deals
13. THE NUMBERS SHOW SAN DIEGO IS NOW A STARTUP HUB
Southern and Northern California
had a similar number of new
ventures in 2016
San Diego held it’s own with ~2/3rds
as many startups as Santa Clara or
San Francisco counties
Published in Connect San Diego Innovation Report 2016
New Innovation Startups by California County in 2016
1202
477 449
119
82 78 49 48
760
611
341
278
122
81 52 41
264
0
200
400
600
800
1000
1200
1400
Southern CA
2,504
Northern CA
2,550
14. INCREASINGLY, SAN DIEGO IS THE PLACE TO BE
Unprecedented -- Years of hard work generating results
VSs saw 28 companies pitch and met 20 more CEOs
Very positive feedback, numerous follow-up
30 Exhibitors at San Diego Cool Companies exhibitors
raised > $70mil in the last year
200 Exhibitors at Tech Crunch Disrupt Startup Alley raised
only $35mil in the last year
SDVG has brought over 150 VCs to the area in 2016
Venture Summit drew >100 VCs
Cool Companies Event in June drew > 60 VCs
Source: Mike Krenn, San Diego Venture Group
15. SAN DIEGO HAS HIGHLY VALUED INDUSTRIES
T Y P E H O W E X A M P L E S
M A R K E T
M U LT I P L E
Asset Builders Make One, Sell One
Industrials
Hospitals
Hotels
1X
Service Providers Hire One, Sell One
Consultants
Financial Services
insurance
2X
Technology creators Make One, Sell Many
Biotech
Software
Pharma
4X
Network Orchestrators Many make, many sell
Credit cards
Stock exchanges
Social networks
8X
TECHENABLED
40-year S&P 500 Lookback
Source: Deloitte Development presentation to SNS FiRe Conference 2017
16. AND COMMUNITIES THAT SUPPORT THESE INDUSTRIES
THRIVE
HIGHER ADOPTION OF INNOVATIVE MODELS LOWER ADOPTION OF INNOVATIVE MODELS
Based on 2014-15 data compiled by the Economist Intelligence Unit
Presented by Deloitte Development at SNS FiRe 2017
Despite some controversy, San Diego has wide adoption of new innovative models. For
example, San Diego is a top city in usage of tools like Uber/Lyft and AirBnB
US
CHINA
MEXICO
GDP ▲
JAPAN
GERMANY
UK
GDP ▼
17. SAN DIEGO UNIVERSITIES ARE PRIORITIZING
ENTREPRENEURSHIP
Lavin Center
lavincenter.sdsu.edu usdentrepreneurship.com
Social Innovation Challenge
Legacy Entrepreneurship Conference
USD Legal Entrepreneurship Clinic
Hera Hub
Zahn Center / Zip Launchpad
18. DEEP DIVE: UC SAN DIEGO
STATED OBJECTIVES:
Removing the barriers to tech
transfer
Removing startup barriers
Integration of support
functions for entrepreneurs
New approaches to
collaboration- Innovation
Zones
PROGRAMS: ACCOMPLISHMENTS:
Six campus incubators
Ignite conference,
March 6-7, 2018
Partnership with Triton Fund
(part of Vertical Ventures)
Entrepreneurs-in-Residence
Accelerating Innovations to
Market (Proof of concept
grants)
Ranked #4 nationwide for
start-up creation!
760+ companies since 1988
106 new companies in 3 years
– 43 last year
Approx. 200 new jobs created
Raised $125M in funding
Innovation.ucsd.edu
19. WAYS TO GET INVOLVED
Facilities – access university resources
Qualcomm Institute Innovation Space
Prototyping Lab and core resources open to industry
The Basement and StartR
Supercomputer Center and CALIT2
Events – attend, speak, network
Changemaker Day (social innovation), October 25, 2017
Ignite innovation conference, March 6-7, 2018
Research Expo (engineering), April 2018
Monthly seminars and “Design@Large” series
Biannual accelerator demo days
Office of Innovation & Commercialization weekly newsletter
21. GETTING INVOLVED IN SAN DIEGO STARTUPS
Stage 1: LEARNING & NETWORKING ORGANIZATIONS
Network with fellow entrepreneurs for inspiration and to learn how it’s done. Google any of the
below to find events and times.
Organizations (education & events):
CONNECT
MIT Enterprise Forum
Startup San Diego / Startup Week
San Diego Venture Group
Athena – Supporting women in STEM
Hera Hub / Hera Labs / Hera Fund
TechStars / Startup Weekend
Downtown San Diego Partnership
Entrepreneur Organization, San Diego
San Diego Tech Founders
San Diego Tech Scene
Tech San Diego
Product Tank
Cleantech San Diego
San Diego Sports Innovators
Founders.org
San Diego Tech Coffee
Marketing Mondays
Cooley Go – Free self service legal docs
Regular Meetups
Tools
22. ANNUAL INNOVATION EVENTS
Check eventbrite.com/d/ca--san-diego/startup-events/ for many more
May
USD Social
Innovation
Challenge
June
San Diego
Startup
Week
August
Venture
Summit
October
SDVG/TCA
Quick Pitch
October
EvoNexus
Demo Day
October
San Diego
Innovation
Showcase
October
USD Legacy
Entrepreneurship
Conference
October
Design
Forward
October
TEDx
SanDiego
November
Most Innovative
Product Awards
November
Global
Student
Entrepreneur
Awards
23. GETTING INVOLVED IN SAN DIEGO STARTUPS
Stage 2: ACCELERATORS, INCUBATORS, AND CO-WORKING
Incubators & Accelerators
Cost & funding
Often take equity, although some are free
or for modest fees
May give some (e.g. $25k) cash for equity
Competitive programs look for:
Committed leadership team with domain
expertise & technology skills
Adequate funds in the bank (e.g. pre-seed
or self-funded) to operate for 3-6 months
without additional fundraising
Definitions often blurry
CO-WORKING
•Space &
community in
exchange for
rent
INCUBATORS
•Generally pre-revenue
•3-18 months (or more)
•Mentorship oriented
ACCELERATORS
•Post MVP with market traction
•3-6 months
•Intense programming
24. SAN DIEGO INCUBATORS / ACCELERATORS
XHIVE Incubator
Office space & mentoring
Charges equity
IOT & Analytics spaces
slpsandiego.com
6 month educational program
Provides education and lab space to health care
science related startups
Both early stage and more mature high growth
companies
Mentoring
Length varies
fi.co/s/san_diego
Night classes for founder
3 ½ month accelerator for 4% equity
In addition to the university programs
25. Locations near UCSD and UCI
Irvine company provides class A office space
Completely free: No equity and no cash
Does not provide funding, but can help with networking
>50 sponsors including Qualcomm & ViaSat
Top local executives & entrepreneurs volunteer as mentors and
selection committee
Successful applicants generally have:
Technology and business founders who will work full-time from incubator
office for at least 6 months without additional funding
At least proof of concept / prototype product or clear IP rights
DEEP DIVE: EVONEXUS INCUBATOR
Incubator Statistics (Since 2010)
18
AQUISITIONS
$1,3B
FUNDING &
OUTCOMES
74%
RECEIVE FUNDING
DURING
INCUBATION
>1,600
APLICATIONS
RECEIVED
48
COMPANIES
CURRENTLY INCUBATING
181
COMPANIES
IN PORTFOLIO
85%
COMPANIES
ACTIVE
>2,500
JOBS CREATED
26. CO-WORKING
3rd Space
Bio Tech & Beyond
Collective 1939
CyberHive
DeskHub
DowntownWorks
Outsite.co
Real Office Centers (ROC)
The VineSD
WeWork
In addition to the university programs
27. GETTING INVOLVED IN SAN DIEGO STARTUPS
Stage 3: FUNDRAISING
Pre-seed
$100-250k
SAFE or Convertible Note
Discount off of future round with
maximum value, usually $1-2 million
Minimum investment usually $25k
Use of funds:
Build proof of concept
Demonstrate market interest
Sweat / self / friends & family /
wealthy individuals in your network
(but be wise!—you/they will probably
lose their money!)
Seed round
$500k-2mil
May still be a note or could be equity
Usually value of $4-8million
Minimum of $25k, but could take syndicates of
smaller investors as well
Use of funds:
Fill core team
MVP
First clients / pilots / case studies
Individual angels, angel groups, prizes
Usually local investors
Series A
$2.5-$100mil
Equity
Price highly variable and depends on company
progress, industry and potential
Use of funds:
Scale business to attack market
Build out team to sell & support customers
Professionalize product to meet client
expectations
Angel funds & VCs
Often involves non-local (Bay Area) investors
28. LOCAL FUNDING RESOURCES
Based on list at: www.sdvg.org/resources/#vcfunds
SEED San Diego
Correlation Ventures
Analytics Ventures
Alexandria Ventures
Avalon
CWC HealthTech
Ventures
Domain Associates
Finistere Ventures
JMI Equity
Jackson Square
Ventures
CWC HealthTech Ventures
Domain Associates
Finistere Ventures
JMI Equity
Jackson Square Ventures
Ventures 51
Wolfpack Ventures
Illumina
Qualcomm Ventures
ViaSat
29. TIPS FOR FUNDING YOUR STARTUP
When it comes time to go to Silicon Valley, use local resources like San Diego Venture Group & the Beachhead office
Work on the side of your current job to get your business plan and prototype done
Network and recruit co-founders to fill out the needed skills
Self-fund or use friends or family funds with caution: This is a very risky investment—it’s probably not
worth putting your home, kids education, or family relationships at risk!
Get feedback from mentors who have done it
Investors want to invest in a big idea: Paint a clear picture of what being successful will look like for
your company (both the big idea and it’s ultimate value)
Show exactly how you plan to use the money and what that will achieve
95-99% of your pitches will not result in funding (although people often won’t directly say “no”). So if
you haven’t done 100 pitches you shouldn’t be surprised you haven’t gotten to “yes” yet
Start with sweat equity
Refine your pitch
PITCH, PITCH, PITCH
30. SAN DIEGO TECH & STARTUP EXPERIENCES
Grai Andreason
EMBA ‘02
VP, Project Management,
Spinogenix, Inc.
Tracy Stevens
MBA‘98
Vice President, Product,
AppFolio
John King
MBA‘03
Founder & CEO, Hyperlight
Energy