
Why Los Angeles Should Have a Startup Fund - marcinj
http://thestartupcafe.com/startup-lottery/
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slapshot
Letting politicians decide which startups get funded and which don't seems
like an inevitable way to let politics get in the way of merit:

\- Politically-connected startups get funded first

\- Political goals other than merit (diversity, "social justice," etc) are
used as criteria

\- Arbitrary political limitations get placed on the company ("you can't do
business with anyone who [performs abortion | does business in Libya |
employes illegal immigrants | uses e-Verify...]")

\- Startups are steered toward political ends rather than growth ("while
you're here, why don't you make a version of your app that teaches kids about
[why immigration is good | why immigration is bad | why CO2 is evil | why CO2
is necessary to plant life]")

\- etc.

Beyond even that, it's a really tough gig to identify succesful startups from
bad startups. Venture funds do it full time and are right only 1-in-5 times.
Imagine your favorite city bureaocrat (who gets paid a city bureaucrat wage)
trying to figure out if Spotify will be succesful or not. The best VC teams
are not suddently going to work for the city government.

In short, you get what you deserve when you put politicians in charge of
doling out money, especially in a context that has so much discretion.

~~~
gersh
They could do a matching fund, or provide tax incentives.

~~~
jonallanharper
Or, they could do something towards _actually_ solving the state budget
problems and just fire themselves.

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staunch
Government-run funds are doomed to be crap. I'd much rather have it go towards
entrepreneurial education or something. Teach more young people about the idea
of starting their own company. They'll do the rest.

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Eyalush
There is a way to get money from the government funds now for your startup.
One of the companies I work with went after grants (and were awarded them) to
help develop our technology.

You have to attempt to solve a problem that those offering grants care about,
but I think this is an often overlooked opportunity for startups.

I won't be holding my breathe for a fund here in LA.

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rwhitman
LA has tons of tax breaks for new and small businesses. As a new business or
one making less than $100k you pay no city taxes at all.

I have actually been quite surprised by how accommodating such a large city
was in facilitating tax breaks towards starting my business there. The city
clerks actually called me up and helped me file for deductions after I had
completely missed deadlines.

Anyhow the problem with LA as a startup culture has a lot to do with the
proximity of Hollywood. People dream big, and have a tendency to ignore the
more pragmatic aspects of building a business over the long term. Businesses
in LA tend to go big and flame out very quickly. It doesn't help that its
relatively common for LA startups to be funded by dumb money from someone who
made their bucks as a big dreamer. LA is unique because of its lack of
tempered pragmatism, but unfortunately and ironically I feel like for a
startup culture, thats its undoing...

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sparkygoblue
As someone who lives in LA and is currently bootstrapping a startup, I would
love to see more $$ poured in to the LA startup scene.

It seems like LA has largely been ignored by VC and angel investors.

~~~
slapshot
LA is no Silicon Valley, but there is more money floating around SoCal than
you think.

I assume you've checked in with the Tech Coast Angels
(<http://www.techcoastangels.com/>) and some of Frank Peters' contacts?

There's also an event next week for LA startups:
[http://community.intellicontact.com/p/fundingpost/newsletter...](http://community.intellicontact.com/p/fundingpost/newsletters/chicagoventureevent/posts/meet-
angels-vcs-in-los-angeles-silicon-valley-in-june2)

~~~
tajddin
Do you have any experience attending the event that's being held next week?
What's the turnout like?

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jonallanharper
Another terrible idea from a state bankrupt from terrible ideas.

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suking
California can barely keep itself running - the odds of this great idea
happening are 0 unfortunately.

