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Brand Storytelling: 5 Essential Tips for Your Startup’s Success

Brand Storytelling: 5 Essential Tips for Your Startup’s Success

There are essential questions to attribute your startup's success. How should Founders tell their brand story? What role does product play in the brand story? What are tactical ways to drive momentum? How should Founders think about their brand message and brand promise? How did your brand story evolve in the first couple of years of building and growing your startup? Sit down with Alexandra Zatarain, Co-Founder of Eight Sleep to learn how to answer these questions.
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How Seed Funding Has Exploded In The Past 10 Years

How Seed Funding Has Exploded In The Past 10 Years

Editor’s note: This is the first in a multipart series looking at seed funding trends. Seed-stage funding to startups has exploded in the past decade and become an asset class of its own. If that wasn’t obvious already, consider that in just the past few months, three of Silicon Valley’s largest and best-known venture firms—Andreessen Horowitz, Greylock and Khosla Ventures—all announced large new dedicated seed funds.

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To visualize this dramatic change in the venture ecosystem and understand how much seed investment grew in the past 10 years, we decided to look at the number of U.S. startups that were funded over various five-year time frames and at different stages. Crunchbase data underscores an impressive rise in funding to the smallest startups: Fewer than 3,200 companies received seed funding in the period between 2006 and 2010. A decade later, that had ballooned to more than 23,000 startups.

A Brief History of Seed Funding
One of the biggest catalysts for new startup creation was the launch of Amazon Web Services and cloud computing in the early 2000s—new technologies that drastically reduced the cost and complexity of starting a new tech company. That, in turn, transformed seed funding into its own institutional asset class in the period between 2006 and 2010. Still, startups that raised Series A funding continued to outpace startups raising seed until around 2009—when seed funding took the lead and began to explode, Crunchbase data shows. Seed funding surged again in the period between 2011 and 2015, with 5x the number of companies funded at seed compared to the prior five years. By contrast, Series A-funded companies grew at a much slower pace, showing 42 percent growth. By the 2016-2020 timeframe, there were 23,000 seed-funded companies in the U.S.—up another 30 percent compared to the prior five years. That put seed growth in line with the growth in Series A, where funded startups numbered over 6,800 during that five-year period—up 31 percent over the same period. Rise of the VC Seed Investor In the mid-2000s, venture firms accustomed to investing $3 million to $5 million at Series A and $8 million to $12 million at Series B weren’t all that interested in joining what looked like institutional angel rounds. The Crunchbase numbers bear this out. From 2006 to 2010, multistage venture firms had seed investments in the single digits in total over five years. But these VCs didn’t cede the seed stage for long. From 2011 to 2015, a number of leading multistage venture firms started to grow their seed practices, the most active of which were Andreessen Horowitz, New Enterprise Associates and Greylock. As companies raised multiple seed fundings as well as larger seed rounds in the $1 million to $3 million range, larger venture firms seeking to be the first institutional investors became more invested at seed.

The Firms Investing in Seed Now
The most active multistage venture firms in seed investing more recently are Greycroft, Founders Fund and Khosla Ventures. Khosla has raised multiple seed funds over time and was a seed investor in Instacart, DoorDash, QuantumScape and GitLab. Just this week, the firm announced the close of a new $400 million seed fund. That follows a $400 million seed fund the firm raised in 2014 and a $300 million seed fund in 2010. Greylock, meanwhile, last month announced what the firm says is the largest pool of venture capital dedicated to seed investing: A new $500 million fund. One of the reasons many venture firms are stockpiling funds to invest into seed startups is that getting in at the earliest stages with a young startup lets those investors have a say in crucial decisions early on. “The ‘decision tree’ of a company has the most range at the beginning, and we want to be there as a partner to founders from the foundation,” Greylock, which has made seed investments in Wag, Instabase and Snorkel AI, said in its fund announcement. Andreessen Horowitz announced a $400 million seed fund in August. The firm has made seed investments in Robinhood, Stripe and Lime over the years. “While having a seed fund is not a shift in strategy—seed has long been a core focus—it underscores our commitment to seed investing as a first class motion for the firm,” Andreessen Horowitz said at the time.

Size of Seed Grows
We also looked at the median and average deal sizes for seed rounds for these 14 multistage funds over the decade, and found the median seed deal has grown from $1.5 million to $4 million, and the average from $1.7 million to $4.6 million. While the size of the typical round has ballooned, there’s still a great deal of variance, however. In 2020, seed fundings from these investors ranged from $700,000 to $22 million. The seed rounds of recent years are sizing up to look more like Series A fundings. “The imbalance between supply and demand has pushed round sizes and valuations to a point where investors are no longer rewarded for the risk they take, and seed rounds are now done at Series A prices and sizes from three years ago,” Jeff Clavier of Uncork Capital told me via email. “The problem,” he added, “is that everyone is pricing deals as if they are a 10s of billions of dollars exit opportunity. The vast majority aren’t.”

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Startups

Founder Sarah Agboola Shares Her Struggle to Succeed in LA’s Cannabis Industry

Sarah Agboola is the founder of Golden Bliss Brands in Los Angeles, specializing in the manufacturing of cannabis-infused product lines. Her business focuses on edibles and pain relief creams for the discerning cannabis connoisseur. She has sacrificed money, health, and family to build a dream in a thriving industry that still makes it difficult for Black women like her to succeed. This is her story.

I remember 2017 like it was yesterday. How could I forget the sheer excitement of finally being able to position myself to work and make an impact in the legal cannabis industry? Name a cannabis seminar or conference, and you would likely find me there front and center, soaking up the info, building my network, establishing my brand.

Having the opportunity to own and operate a manufacturing and distribution company in the legal market was a dream come true. Surely this would be my escape from the hustle and bustle of Corporate America, my opportunity to create something of my own that would build generational wealth while serving the community. Having a license meant that I could employ others and work to remove the stigma from cannabis. I could right the wrongs from the War on Drugs that targeted communities of people who look like me.

My dream was to make and sell a brand of premium quality infused cannabis products that would line the shelves of dispensaries and eventually reach the masses. I sought to own and operate my company in the City of Los Angeles.

I did everything right, or at least I thought I did. I spent most of 2017 registering my business, hiring an attorney to have consistent legal representation, creating my pitch, and outlining financial projections. There was no way I was going to fail.

Unfortunately many of my hopes were dashed during the licensing process. I saw the ugly side: overly complicated application forms, unbelievable hoop-jumping, backroom deals, predatory partnerships. Nothing that could have prepared me for the moving timelines and constant disappointments.

The first sign of real trouble came when my California application submission was delayed for nearly eight months. Sure, I was a little upset, but I was certain that the time and money I had invested would end up working to my benefit. I used the extra time to pitch potential investors, update my business plan, and share my vision.

Then more challenges came in 2018. It felt like an Olympic obstacle course. On top of the delayed process, the constant stress led to health issues. By December of that year, I had exhausted more than $150,000 from my savings and my family members. I was crashing on my aunt’s couch and suffered a heart attack.

Finally, on December 28, 2018, there was a light at the end of the tunnel. The city awarded me a temporary license.

This was it — I had finally made it past the hard part. At least, that’s what I kept telling myself. It seemed like finding additional investors would be a breeze now. I could not have been more wrong. My niche in the market was clean green-certified cannabis. The good stuff. However, due to the higher price point and target consumer, investors were reluctant. I saw the potential to create a brand of multiple infused products for the mass market. Investors saw it differently.

Despite my corporate background, proven financial integrity, and a business plan with solid projected financials, it didn’t seem like enough. Potential investors constantly told me that I needed to give up 50% or more of equity, that I should relinquish all control and just leave the decision-making power up to them. Essentially, they only wanted to work with me if they could completely take over my license.

I wish I could say that most of the hurdles came from my White counterparts. Unfortunately many were set by my own community.

Ever-changing local cannabis regulations and delayed timelines prompted groups to start forming that could offer support, advocacy, and real-time information. White men and women formed their own groups. Groups of Black business people offered to help me, but I could see that the deals they presented would be predatory, leaving me powerless. I was left with the impression that no one would be fighting for me or lending real support to Black women in the industry, much less an Afro-Latina like myself.

I wanted investors who believed in my vision and capabilities. I spoke with a wide range of potential investors, from retired athletes to doctors, and but they only wanted to invest in businesses owned by my White counterparts or Black men. Some of these companies — almost all run by White men — were burning through cash, buying unnecessary luxuries and new homes. And these were the smart ones who investors trusted?

Thankfully, with the help of those closest to me, I secured a deposit for a third different building. Yes, you read that right. My two previous properties did not meet the state standard to pass inspection so I had to move locations.

I finally had the money, made the move, and was preparing for inspection when the Department of Cannabis Regulations (DCR) for the City of Los Angeles notified me that they wouldn’t be inspecting companies with building changes until further notice. Another blow. Here I was, three buildings in, living off what was left of my savings, and counting pennies while paying rent at a building that wasn’t scheduled for inspection anytime soon.

A new year brought additional changes to local licensing and Covid-19. In the midst of it all, I was desperately trying to maintain my health and good standing to attract investors. But I’m not Superwoman. I struggled to pay the rent on an empty building that I had to keep in order to maintain my license. So I began seeking alternatives yet again.

I met with several groups and encountered the same song and dance: they didn’t have money to buy in on the license, they wanted to do illegal cultivation to pay rent on the building, they want to help but didn’t have the money, or they brought an “I’m better than you” attitude. Or, worse, they were condescending and had nothing to offer. It felt like an enormous slap in the face from my own community.

Despite securing a city license, a pending state license, having building, insurance and cameras, I still lack investors, joint ventures, and partnerships. Now I’m learning that most investors want to see an already built-out facility and three to six months of working capital. The stakes keep getting higher and I’m running out of funds.

Most women in the local cannabis industry are still seeking funding as tight DCR deadlines approach that could knock us out of business forever. There have been constant changes on short notice, no social equity, no assistance, and difficulty moving buildings. We still lack funding and power. We are constantly aiming at moving goalposts. Yet we must meet the deadlines.

My story hasn’t ended, though. I am determined to keep going. I know it is not too late to keep my brand alive.

If you’d like to support to Golden Bliss Brands, contact Sarah directly at info@goldenblissbrands.com.

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Startups

First Founders Emerge from Plug In South LA’s Accelerator Program Ready to Disrupt

VCs systematically overlooked African-American and Latinx founders when Plug In South LA started six years ago. In response, we launched a unique intensive accelerator program last fall that supports promising entrepreneurs from underserved communities with guidance from successful mentors and advisors.

A diverse group of five bright founders recently emerged from our six-month Plug In South LA Accelerator Program. This first cohort forged new connections and gained smart strategies to scale up their businesses. They’re primed to disrupt categories such as e-commerce, wellness, and digital media. But they still need support to get there.

Rewriting the Rules of Startup Success

The 2019–2020 Accelerator Program grew out of our successful Lunch & Learn series. We carefully selected five founders who had already launched and were in the process of raising funds.

Last fall we welcomed the Accelerator Program’s first cohort: Hyve founder Jibril Jackson, Esqapes Immersive Relaxation founder Micah Jackson, Spooler, Inc. founder Benjamen Janey, Gro Lens founder Ron Johnson, and Me Tyme Network founder Remy Meraz.

Numerous experts participated in highly curated mentoring sessions that shaped the five founders’ progress. These mentors and advisors represent the best of LA’s tech ecosystem. They included OPV partner Austin Clements, Disney SVP Sonya Joo, Silicon Valley Bank director DeMarcus Williams, Joymode co-founder and CEO Joe Fernandez, DNABlock CEO Anthony Kelani, HopSkipDrive VP of strategic development Qiana Patterson, WhatThe FAQ founder Reagan Sirengo, and Wolverine Angels founder and managing director Shane Kelly.

Verizon, the Nike Foundation, and Silicon Valley Bank served as program partners.

Pioneering Founders Rise to the Challenge

Customized sessions designed to help the founders grow their businesses met them where they were in their development. During the program, all five founders made enormous strides despite the Covid-19 crisis and economic downturn.

Jibril Jackson secured seed funding and plans to launch his Hyve platform this fall. Micah Jackson, whose Esqapes Immersive Relaxation pairs carefully crafted virtual environments with soothing massage, signed his first paid members and a license deal in Washington State.

Benjamen Janey saw a 129% increase in online conversions for his tech-driven socially conscious apparel company Spooler due to marketing, UX updates, and sales initiatives geared toward artists that lead to new funding opportunities. Ron Johnson closed a seed round, hired a customer success manager, and increased his software-as-a-service company’s customer base.

Remy Meraz raised capital and rethought user experience for her behavioral health platform Me Tyme Network. She established a partner to build UX and front-end development, and launched a pilot for 100,000 users.

“I truly feel that the Plug In South LA team is 100% vested in our success beyond the program,” she said.

Boosting Tech Innovation in South LA

Although these founders made remarkable progress, the odds are still stacked against them. Less than 2% of the venture funding available makes it to Black and Latinx founders, according to research cited by Crunchbase.

The wealth gap also means that founders of color rarely have an opportunity to devote all of their time to scaling up. Jibril, Micah, Ben, Ron, and Remy demonstrated expertise in their respective areas of business. They are coming out of the Accelerator Program with new focus, but many of the persistent hurdles to accessing capital remain.

We can do something. For the next three months, Plug In South LA is challenging venture capitalists and corporate executives in our community to help these fantastic entrepreneurs focus on disrupting their categories.

Here’s how to participate:

  • Check out the founder’s platform and technology.
  • Review the founder’s pitch deck and provide feedback.
  • Introduce the founder to a potential customer.
  • Connect the founder with an angel investor.
  • Put the founder in touch with an entrepreneur who raised Series A funding.
  • Speak with the founder about a specific challenge or opportunity.

Our 90-day Challenge begins now. Let’s shine a light on innovation in South LA and give these business leaders the boost that they deserve.

To join us, please get in touch: info@pluginsouthla.com.

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Startups

Plug In South’s LA Response to the Death of George Floyd

Dear Plug In South LA Community,

After everything that happened in the first half of 2020, we first and foremost hope that you are safe and healthy. Plug In South LA began as a proactive effort to support a Brown and Black founders pipeline into the tech ecosystem, and help develop similar ecosystems in overlooked and underserved communities, accelerating the next generation of talent.

Recent events are warning signs that we take seriously. We are horrified by the murder of George Floyd last weekend, Breonna Taylor’s death in March, and the killing of Ahmaud Arbery in February. We are disgusted by the lack of national leadership to bring our country together to move forward. We are shocked by the injustices we are witnessing.

We can no longer sit back and watch the poor and disenfranchised suffer from a double standard in the judicial system. Yesterday Plug In South LA observed Blackout Tuesday. That meant we were not posting to social media or engaging in business as usual. Beyond Tuesday, we will be questioning how engaged we are in platforms that don’t serve us well.

We continue to look for innovative ways to help the South Los Angeles community — and communities like ours — get through these difficult times. We support the organizations that are strategically focused on facilitating peaceful protests. We can work with our elected officials to reform our legal system. Let’s put pressure on CEOs, news organization executives, district attorneys, and community leaders to unite around implementing policies and laws that prevent senseless deaths from ever happening again.

If you’re able to peacefully protest and use your voice, please do. We can support the people on the front lines of change. Organizations you can support and ways to get involved are listed below. Collectively, we can move mountains.

We hear you. We see you. We love you. We stand with you.

—Team Plug In South LA

Stand Up and Support Your Community

PAY BAIL AND BOND FOR ARRESTED ACTIVISTS:

REGISTER BLACK VOTERS AND FIGHT VOTER SUPPRESSION:

DEVELOP DATA-DRIVEN POLICY SOLUTIONS TO POLICE BRUTALITY:

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Plug In South LA Accelerator – Kick Off Meeting

Plug-In Lunch and Learns are designed to help cultivate the next generation of founders and entrepreneurs in Los Angeles. Our meetings and workshops take place in South LA and around Los Angeles at leading VC firms, corporations, entertainment, and digital media studios . If you’d like to be a featured presenter at one our programs, please get in touch by providing the information below. We’ll review and get in touch if we think we can help.

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Startups

Meet 4thMVMT’s Karim Webb at Urban Tech Connect

Karim Webb is CEO of 4thMVMT, a Los Angeles based firm that seeks, vets, trains, finances and partners with individuals from “underserved communities” to own and operate competitive retail businesses. 
The primary goal of 4thMVMT is to cultivate human potential through empowering people, providing new solutions, and fostering well-being while building community, improving outcomes, and engaging culture in an authentic and impactful way.

Webb’s entrepreneurial experience and history of engagement within “at-risk youth” in Los Angeles has lead him to his true life purpose, philanthropic work promoting leadership development and entry-level employment as a gateway to a fulfilled life. 
Karim believes opportunity and progress do not just happen but that working toward creating even the smallest ripple is capable of causing a wave of positive results. And under his leadership, Webb’s Team Members have learned to activate possibility in their lives by exercising their muscle of excellence.

Webb is also Co-Owner and Operations Partner of PCF Restaurant Management, a multi-unit franchisee of Buffalo Wild Wings. Beyond Buffalo Wild Wings and 4thMVMT, Karim is an advisor to the Multicultural Foodservice & Hospitality Alliance (MFHA) and holds a number of Board positions including the California Community Foundation, the Brotherhood Crusade, Everytable, and the Living Through Giving Foundation: Hashtag Lunchbag.

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Meet AI LA Community’s Todd Terrazas at Urban Tech Connect

Todd Terrazas is a social entrepreneur, collaboration catalyst, and the President of the AI LA Community. Prior to creating AI LA, Todd founded Brainitch — a social enterprise developing an emergency response system for music festivals and large gatherings. The company evolved into custom development for clients where he pioneered the use of chat bots for musicians and live events, and created a consumer research chat bot named H.A.N.S. Todd exited his company to pursue a more meaningful endeavor: the AI LA Community.

AI LA was founded because of a combination of frustration and inspiration. There aren’t enough intellectual conversations focusing on how technologies such as artificial intelligence (AI) will impact our lives, society, and industries. More so, this caliber of conversation is usually accessible to only the elite and not the general public. After a series of successful events, Todd realized he was good at and greatly enjoyed bringing people together to discuss technology and philosophy under one roof. Today, the AI LA Community is a California non-profit pursuing 501(c)(3) status with a mission to build a more informed and collaborative world in which humans use AI harmoniously and transparently in everyday life. Todd is a graduate of the University of Southern California’s School of Cinematic Arts, where he focused on entertainment business and short-form storytelling.

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Meet J.P. Morgan’s Nate Moyer at Urban Tech Connect

Nate Moyer is a finance professional at J.P. Morgan with over 12 years of experience in the financial services industry. In his current role, Nate focuses on high-growth, high-potential business in the technology and consumer sectors and brings the depth and breadth of products and services that J.P. Morgan offers. Throughout his career, he has advised businesses at all stages of business lifecycle from mature Fortune 500 companies to innovative start-ups.

Previous to his role at J.P. Morgan, Nate worked at Bank of America as a client manager for public and private companies in Los Angeles. Before that, he was an Investment Banking Senior Associate at Wells Fargo Securities, and a Director at FTI Consulting, a public, global financial consulting firm.

Nate received his B.S. in Accounting at Arizona State University where he graduated with honors within the Barret Honors Program and an M.B.A from UCLA Anderson School of Management.

Nate lives in Santa Monica with his wife Erica. He is an outdoor enthusiast and spends most of his time outside of client meetings playing squash, skiing, hiking and enjoying Santa Monica beaches with his wife. Nate volunteers his time for the Santa Barbara School of Squash, a sports and education non-profit serving youth in need.

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Meet Alexandra Freyer at Urban Tech Connect

Alexandra Freyer is a senior associate in SVB’s Santa Monica office, where she works on the Early Stage Practice team to provide the personalized service that positions LA-area technology and innovation entrepreneurs to meet and exceed their goals.

Alex’s knack for business development and passion for adventure make her a perfect fit for SVB. As a Tanzanian safari consultant in 2010, she increased her employer’s revenue by $1.2 million within her first 10 months on the job. She also developed the Boston office of LivingSocial Adventures from its inception. From there, she took on a position as an account executive for the New York–based Clinton Global Initiative, where she brokered worldwide partnerships for socially responsible initiatives and secured millions of dollars in memberships and sales to Fortune 100 corporations, celebrities, social impact companies and NGOs.

Alex also worked as manager of executive operations for online advertising technology company true[X] Media, where she participated in the rebranding and restructuring that preceded its successful $200 million acquisition by 21st Century Fox in 2014. The innovation-driven startup mentality at true[X] served as the ideal training grounds for the SVB Santa Monica office, which she joined in 2016.

Alex earned her bachelor’s degree in government with a minor in theater and dance from Colby College in Waterville, Maine. Through its semester abroad program, she studied world politics at the University of Cape Town and volunteered at a refugee center in South Africa. Shortly after graduating in 2009, she completed the rigorous certification process at the India-based Himalaya Yoga Valley Centre. She has taught private and group classes in Newport Beach since 2014.

When she’s not working in the fast-paced world of tech startups or leading students into the reflective universe of yoga, you’ll likely find her pedaling a bike, playing a piano or dancing.