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The Big Picture San Diego Blog


San Diego Venture Group

February 9, 2017

If you build it, they will come…”  This mantra was true of the Field of Dreams, and now of San Diego’s burgeoning tech ecosystem.

Together with 35 of San Diego's best and biggest tech companies, Innovate78 representatives joined the San Diego Venture Group's Tacos + Tech in Silicon Valley last week. The event – appropriately held at the Computer History Museum – played host to more than 700 curious Bay Area engineers and programmers, and served to showcase the high-tech jobs and opportunities available across San Diego.

With a special focus on attracting Bay Area engineers, North County companies like ViaSat, Thermo Fisher Scientific and Verve, as well as other San Diego companies like Illumina, Dexcom, ResMed, Qualcomm, Human Longevity, Cubic, Hired and LoanHero set up shop at the job fair-like event. Company recruiters spoke to San Diego as the alternative to Northern California’s congested traffic, high cost of living, hyper-competitive workforce culture and other issues plaguing the region.

As a proud sponsor, the EDC-led economic development initiative Innovate78 represented North County at a booth, with leaders from the five cities along the 78 Corridor – Carlsbad, Escondido, Oceanside, San Marcos and Vista – at the helm. Conversations with attendees ranged from North County housing costs to the growing tech sector, to the many breweries that make up the ‘Hops Highway’ – one of the primary booths highlighting the region's lifestyle.

While many attendees admitted connection to San Diego through family, school or dream vacations, it seemed as though the region’s tech ecosystem – which employs nearly 69,000 people – has flown under the radar. Tacos + Tech provided a platform for some of San Diego County’s top employers and innovators to attract Bay Area talent through simply sharing San Diego's reality: a broad diversity of career opportunity mixed with a top-tier quality of life (and, of course, tacos and beer). For decades, San Diego has built this ecosystem, and now…the talent will most certainly come.

Tacos + Tech comes on the heels of SDVG's Beachhead launch, a coworking space for San Diego entrepreneurs working out of Silicon Valley. 

November 11, 2013

Illustration of GroundMetrics oil producing technology

 

GroundMetrics CEO George Eiskamp recently demonstrated a talent important to any entrepreneur building a company – extemporaneous speaking. Asked to give a quick update on his company at the closing lunch of the World’s Best Technology conference (WBT), Eiskamp whisked the audience through his firm’s financing wins and in the process showed that it takes a proverbial village to get a company up and running.

Founded in 2010, GroundMetrics is developing a new class of sensor system for advanced ground-based electromagnetic survey and monitoring services for resource exploration, production and environmental integrity.

Eiskamp’s early funding set records with San Diego’s Tech Coast Angels. His first round of financing in 2012 was the largest investment ever raised from a single chapter ($1.2 million). A Small Business Innovation Research grant (SBIR) from the U.S. Department of Energy soon followed and in October of 2012 GroundMetrics was selected to present at WBT.

Eiskamp’s story was welcome news for the WBT class of 2013. Since participating in the program last year, where the company won a Gold award as one of the most promising technologies showcased at the event, GroundMetrics took second place in the San Diego Venture Group’s PitchFest, closed a second round of financing – again led by San Diego Tech Coast Angels – and secured an additional SBIR grant from the Department of Energy as well as a $1.8M grant not earmarked for small companies.  The company also added the world’s 6th largest and 20th largest oil companies to its customer base in addition to repeat business from the world’s largest oil company.

San Diego Regional EDC’s Matt Sanford (who met Eiskamp at WBT 2012) introduced him to Tom Van Betten and Kaley Severn at Cassidy Turley San Diego, who helped him locate office space in Kearny Mesa and referred him to James Morrell at Veteran Solutions to renovate the space. In a follow up email, Eiskamp was very positive about his experience. “I’d highly recommend them to other early stage companies, which are the real economic drivers in any community and especially tech clusters like San Diego.”

GroundMetrics is currently in due diligence for a Series B round of funding with two organizations he met via WBT in 2012. It was a meeting with one of those groups at the site of WBT 2013 that led to the last minute request for what turned out to be an inspiring story for companies currently in the hunt for funding.


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July 15, 2013

 

Gwynne Shotwell just might work for the coolest company on the planet - or as she puts it "In 10 years or so, it might be the coolest company on another planet." Shotwell is talking about SpaceX, the company where she serves as president and COO. Even the most sophisticated in the audience at San Diego Venture Group’s July 12 Venture Summit gasped at the video of SpaceX rockets being tested that blast off and then return to the launch pad. “Grasshopper” is a 10-story Vertical Takeoff Vertical Landing (VTVL) vehicle that SpaceX designed to enable a rocket to return to earth. The ultimate destination? Mars – which Shotwell described as a “fixer-upper planet.” Her humorous and very informative talk left everyone thinking about the power of dreaming big.

Dave Titus, San Diego Venture Group’s president gave a “Venture Status Update” that included both good news and sobering news. Venture fundraising has dropped over the last five years even though the number of firms has stayed about the same. Active funds are down 20 percent in the last five years and the first half of 2013 looks to be following this trend. The industry is consolidating – the top 20 firms raise 55 percent of all the dollars with an average fund size of $400 million. The remaining firms have an average fund size of $41 million.

One surprising statistic shows that since 2008, venture investing has surpassed venture raised, resulting in deficit spending. Titus cited some reasons that could account for the discrepancy – imprecise data, investment coming from non-traditional funds (family offices, foreign investors, hedge funds) and the rise of corporate venture capital. Corporate venture has increased 50 percent in the last three years but seems to be leveling off. On the local front, Qualcomm Ventures is the second largest technology corporate venture fund in the world, exceeded only by Intel.

According to Titus, financings will be harder – he told the entrepreneurs in the audience to plan for that reality and practice, practice, practice your pitch! As for the good news: exits are up with 21 venture-backed IPOs in the second quarter of 2013 and 11 biotech IPOs.

Citing sectors like enterprise software and hardware, Titus told the 600-plus attendees “Hard things are popular again and San Diego is good at hard things.”

 

 


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July 2, 2013

San Diego Venture Group Cool CompaniesIn 2012, the San Diego region raked in upwards of $1.1 billion in venture funding, beating Texas, Colorado, the DC Metroplex and other locales. At the San Diego Venture Group’s Annual Venture Summit on July 12, participants will be able to interact with more than 120 VCs and 30 “cool” companies.

The Venture Summit is one of the most popular events produced by SDVG and connects numerous top entrepreneurs from the region with many investors from Southern California, the Bay Area and other areas to showcase how the innovation climate thrives in San Diego. The Summit will feature a keynote by Gwynne Shotwell, president and COO of SpaceX, as well as other San Diego innovators including Chris Anderson (3D Robotics), Dr. James Mault (Qualcomm Life) and Larry Stambaugh (San Diego Zoo Bioinspiration Centre.)

For the second year in a row, the Venture Summit will include 30 San Diego “Cool Companies.” From social media to software and algae biofuels, companies making this year’s roster include Roambi, Sapphire Energy, and Embarke. They are indicative of the dynamic industries that fuel San Diego’s innovation economy.

Venture Summit is not the only venture-related activity that’s happening in San Diego on July 12. On that day, companies from around the globe will hand in WBT logotheir submissions to present at WBT Innovation Marketplace. Now in its 11th year, WBT Innovation Marketplace brings together the largest collection of vetted and mentored companies and technologies emanating from top universities, labs, research institutions, and the private sector. More than 10 years of research shows that one in three WBT presenters goes on to license, secure venture funding, or sell their IP outright. Last year, the show moved from Arlington, Texas to San Diego, so it could benefit from the region’s world-class talent pool and strong venture capital community.

Companies are invited to apply to present at the Oct. 22 showcase.

With all of the venture activity going on throughout the region, it’s no wonder San Diego has been identified as a high-tech challenger to Silicon Valley.


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February 21, 2013

San Diego Venture Group gathered a diverse panel of San Diego-based venture capitalists recently to talk about their focus, how they spend their time, and what they recognize as red flags for prospective investments.

Jason Brown of Thomas McNerney & Partners made the first meeting/first date comparison with the comment that the venture investor/company relationship is like a marriage of sorts, except that you don’t want it to last … Compatibility is important when you’re going to spend so much time together. Brown concentrates on life sciences investing which carries huge risks and costs. “Getting to ‘yes’ is difficult. The elements of risk have to be achievable,” Brown said, “We have to look at clinical risk, scientific risk, regulatory risk, commercial and competitive risk.” Later, when a question came up about healthcare reform, he added reimbursement risk to the list. Despite these daunting odds, Brown said he spends as much as 50 percent of his time looking at new investments.

Steve Hamerslag of TVC Capital invests in software and software services. TVC Capital looks for investments where there is already $2 - $10 million in revenues and the company has reached a point where it is time to professionalize the organization. Hamerslag said TVC invests anywhere from $4 - $10 million in each company and expects to take an active mentoring role. Red flags for Steve? Issues with bad management or trust and inconsistent answers to questions about the business. He spends about 20 – 25 percent of his time looking at new deals and said that a recommendation from a trusted source really helps a company get his attention.

Afif Khoury of Scatter Ventures invests in many different areas. A quick look at the firm’s portfolio shows everything from farming to pharma. He spends about 20 percent of his time looking at new investments and will probably make two new investments in the next 12 months. Red flags for Afif? Too rosy an outlook and overselling. When asked what was most important – team, idea or opportunity, he answered that all are important. While he made it clear that Scatter invests in people, they’re looking for markets as well as management.

David Wise of Qualcomm Labs invests both internally (Qualcomm Life, Qualcomm’s wireless health subsidiary, originated in Qualcomm Labs) and externally with a focus on platforms that will drive new business for Qualcomm technologies. Wise spoke about their venture with EvoNexus, an incubator program within CommNexus where Qualcomm Labs @ EvoNexus has funded three companies. Wise says creating companies outside the walls of Qualcomm gives small start-ups more freedom while still having access to Qualcomm’s business and technology resources. Wise estimates he spends 30 – 40 percent of his time looking at new investments.

San Diego Venture Group and San Diego Regional EDC share office space. It’s great to have someone as knowledgeable as Dave Titus, SDVG’s President, within easy reach. Access to capital is a key requirement to maintaining and growing an innovation economy. Dave’s insight and connections within the industry help us work more effectively with entrepreneurs.