Q&A: Minnie Ingersoll, of TenOneTen, a VC firm in LA, Gives Her Thoughts on the VC Outlook for 2020 in SoCal
This Q&A is with Minnie Ingersoll, an investor and host of the LA Venture podcast (which can be found on the Podcasts page of OC Startups Now).
She’s a partner at TenOneTen in LA. This VC firm invests in early-stage companies (pre-seed, seed and seed-plus). She enjoys working with tech founders who are passionate about what they’re building.
Prior to TenOneTen, she founded and served as COO at Shift, an online marketplace, which disrupted the $1.2 trillion car industry by providing “a better experience for buying and selling used cars.” She grew that company to a $100M-plus business and a recent Series D.
She started her career as an early product manager at Google.
She recently moved back to her hometown of Pasadena and is bullish about the LA startup scene. Here are her predictions for the VC outlook for SoCal for 2020.
OCSN: What are your thoughts about the current VC marketplace in LA and the greater SoCal region?
Ingersoll: I think these things have momentum and it requires a few things to all be in place to get the flywheel going. I think a lot of those components are in place in SoCal. Ten years ago, when we were thinking of moving to LA, far fewer of those components were in place.
Some of those components include having the capital here, having technical talent here and keeping it here, and having an angel ecosystem of people, who not only have the means to be angels, but who think of tech, and know how to be startup tech investors to get the whole venture ecosystem going.
To be a good angel investor it’s helpful if you understand tech–what makes a good term sheet, a good team, what traction to expect and that sort of thing. If you haven’t been exposed to early stage tech, you might choose to put your money in an asset class you understand better (eg: real estate).
And then there’s the angel pixie dust on top of it that is the culture. You can feel the excitement, the diversity, the positivity and the feeling that things are growing and the flywheel is going. People feel that, and that excitement feeds upon itself, and so it becomes a more exciting place for people to move their families back here.
The closest analogy may be a startup. Cities, like startups, build cultures early and build momentum. When a friend asks what startup to join, I say join one with amazing positive momentum. I believe that the rising tide lifts all boats and LA has that positive momentum.
And for women in particular, the LA chapter of AllRaise just launched. Also there’s a variety of co-working spaces that are targeting women, including the Wing in West Hollywood, the Riveter in Marina del Rey and the Jane Club, in Hancock Park, which also offers onsite childcare. They’re also doing events and building community.
OCSN: How can one be a good angel investor?
Ingersoll: Go to workshops! But, fundamentally for my career, it’s seeing more deals. The more I see, it’s less about being educated (and more about experience and expertise). If I see 100 different deals, it’s easier for me to rate them, than if I’ve only seen 10.
One of the things I do, I’ll sit on some syndicates from AngelList and the like, including Stanford Angels & Entrepreneurs; New Stack Ventures; and Xoogler, a group of Google alumni and current Googlers who help each other advance in the startup ecosystem. (The Xoogler community consists of startup founders, early team members, angel investors, VCs and mentors.)
I also sit on Jason’s Syndicate. This syndicate is hosted by Jason Calacanis (He’s an entrepreneur, angel investor and author, and also has his own podcast. His syndicate has 3000-plus accredited investors.) This way, you can write a $2K or $5k check, as opposed to a check for $20K.
OCSN: What do you expect the investment market to look like in 2020?
Ingersoll: An interplay between SoCal and NorCal. Traditionally, 85% of the investment in SoCal tech startups has come from outside of SoCal. I think that’s going to change, not quickly, but the absolute dollar amount, as well as relative dollar amount, will change.
Especially in earlier stages, where there’s a lot of advantage to having investors located nearby geographically, that will be changing, because we’re seeing lots of early-stage funds in SoCal.
San Francisco is getting harder to build a startup in, and LA is getting easier to build a startup in. The crazy competition for talent is not as extreme here in SoCal.
I heard Google has interviewed every engineer on the (San Francisco) Peninsula. LA is a trillion dollar economy and LA county has 10 million people. Not as dense as competing with Google/FB/Airbnb for engineers.
In SF, the tenure of a startup employee is about 1.7 years at larger tech companies. That war for talent is very real. And yet, LA graduates more engineers than any other city in the country. That talent felt like it needed to move to NorCal. That’s no longer the case.
OCSN: What startup sectors are gaining traction and losing traction?
Ingersoll: In the big picture sense, in LA it used to be you would start your company here if you were doing something in the realms of media (content) or e-sports or interactive entertainment. A lot of really successful D2C brands have been built in LA. What you will continue to see is more tech companies also being started here. That’s not brand new.
But SaaS, B2B, etc – the breadth of startups is growing. And SoCal will mimic the rest of the world.
Computer vision is extremely hot right now because there’s so much we can do with video and algorithms, so we’re going to see all sorts of different apps. Computer vision is an interdisciplinary scientific field that deals with how computers can gain high-level understanding from digital images or videos. From the perspective of engineering, it seeks to automate tasks that the human visual system can do.
As tech advances, SoCal will be well-positioned to take advantage of that.
OCSN: How can more VC funds get started?
Ingersoll: People start by pooling their resources into a fund 0 or fund 1 – they’re essentially a glorified angel group. If they chose to, they can then parlay that into outside LP’s. But a lot of LP’s look at, “Do you have a track record?”
I do see early-stage funds continuing. But there’s only still a reasonably small number of funds. I’m trying to interview everyone with funds for my podcasts.
There’s a lot of funds that were smaller and playing in the pre-seed/pre-product/pre-revenue stage, which are now raising larger funds and moving downstream and investing in companies that are post-product and post -revenue. That leaves room for smaller funds to move in, because there will be a greater lifecycle span of this ecosystem.
OCSN: Do you anticipate that corporate VC funds will be on the rise this year?
Ingersoll: Yes, I think those are popping up everywhere, i.e. Touchdown Ventures in LA, which exclusively funds corporate ventures, i.e. Comcast Ventures, with HQ in SF, and offices in New York and Pennsylvania.
I recently interviewed two people on my podcast, Meredith Finn (Dec. 3 2019 podcast), VP of March Capital Partners, a VC firm in LA, and previous VP of Salesforce, and Dinesh Moorjani, managing director of Comcast Ventures in SF.
Here’s what they told me:
◦ Salesforce is investing off balance sheets
◦ Comcast has more of an off-fund structure. It has a certain amount per fund and more for follow-ons.
It’s important to know the different flavors of a corporate venture arm. Some are very strategic. Salesforce invests in companies that are associated with it. Comcast invests in order to get a financial return. The recipients don’t need to necessarily touch Comcast.
OCSN: Anything else you’d like to add?
Ingersoll: I’m very optimistic. I’d like to see stats on people who are moving to SoCal – it certainly feels like another big wave of people are relocating, and that funds that are SF-based are now spending a lot more time in SoCal or sending someone to SoCal.
There’s also a huge growth of scout programs. VC scouts are individuals who use money that’s fully or partially fronted by another VC fund to make investments in early-stage companies, with hopes of giving the sponsoring fund an advantage in leading a larger round for the startup later on.
First Round Capital has a few scouts in LA. One is Todd Jackson. For Craft Ventures, Michael Tam is a scout based in LA, whom Ingersoll just interviewed on her podcast on Monday. Michael Stoppelman, an angel investor, is a scout for Index Capital/Ventures.