It’s smart to start a startup in… Los Angeles (Part 1)

March 22, 2010

When I first began to research OpenView, I was surprised to learn that one of this Boston Venture Capital fund’s portfolio companies (Central Desktop) was located in the greater Los Angeles area. It was my understanding that most startups made their homes in Silicon Valley, so other the fact that LA is 70 degrees and sunny year round, what is its allure? (I may have just answered my own question…)

I came across an article on Fast Company’s site which is actually called, Why You Should Start a Company in… Los Angeles. According to the author, Laura Rich, LA has actually become home to many of the most successful online companies to date, including CitySearch, Overture, eHarmony, LowerMyBills, and MySpace.

So what makes LA a great place to start a company, or to grow an expansion stage company?

1. It’s the second largest designated market area (DMA) in the country, so there is a large pool of candidates from which to draw talent. True, many people in the LA area have careers that are geared towards the arts, but in such a huge DMA, you should be able to find a wide array of candidates (LA is the home of USC, UCLA, and Cal Tech, after all), and a large market to sell your products and services into.

2. LA is only a one hour plane flight from Silicon Valley, which not only allows for easy access for companies looking for venture funding, but also can make it easier to draw some of Silicon Valley’s talent down to SoCal.

3. According to Laura Rich, the startup culture in LA is geared towards, “Show me how you’re going to commercialize this technology, I want to understand how it makes money. As a result, [LA has] bred a culture of companies who have been quite innovative on making money.”

Please check back with Happy Hiring later today for Part 2 of this post.

VP, Human Capital

<strong>Diana Martz</strong> is Vice President, Human Capital at<a href="http://www.ta.com/">TA Associates</a>. She was previously the Director of Talent at OpenView.