Top LA investors talk about investment strategies

Bill Woodward, Dana Settle, Erik Rannala, Eric Manlunas and Paige Craig at Splash LA 2014

We were super excited and honored to have Bill Woodward, a leading LA entrepreneur having co-founded Macromedia, which was sold to Adobe Systems in 2005 for $3.4 billion, moderate our panel of early-stage investors. Woodward himself is an investor, having founded Anthem Venture Partners.  On the panel at Vator Splash LA 2014 were Erik Rannala, Founder of Mucker Capital; Eric Manlunas, Founding Partner at Wavemaker Partners; Dana Settle from Greycroft; and Paige Craig, a prolific angel investor who just raised his first fund: Arena Ventures.

Again, we're sorry for the delay in getting these videos published. But the content is still rich and awesome.

Here's some highlights [slightly edited]

- On what's hot in Southern California? 

Craig said he likes markets disrupting labor. Examples of companies include Lyft, Uber, Washio. Old school industries, like agriculture and even towing, that are not yet automated. Rannala echoed similar themes. He liks offline industries moving online. He likes marketplace businesses, partly because he and his partner both worked at eBay. Manlunas also likes industries whose businesses are getting automated and he like virtual reality.

- What they look for in entrepreneurs

Rannala said he looks for "domain" expertise, but that could also mean just expertise in running a business. He gave the example of Aaron Levie, Founder and CEO of Box, who had started multiple companies since high school. So having an idea, creating a product, and getting customers and learning how to run a company are good skillsets to have. He also likes entrepreneurs who are committed, though realistically this quality isn't always easy to spot. Craig said he asks himself whether he'd work with the entrepreneur or start a company with the entrepreneur. He also prefers to see what they've done versus what they say. Manlunas says he likes to see personal motivation and commitment, backing someone who'd run through a brick wall.

- Metrics companies have when raising a Series A or B

All agreed that in the early stages and pre-seed, it's hard to get metrics because they don't really exist. But in seed to after, good entrepreneurs should be resourceful with data to have the ability to validate their opportunity. All said they're looking for signals about product-market fit and the rate at which they're aquiring customers. Settle (who happened to walk in a little late) talked about how different businesses require different metrics. She mainly focused on startups trying to raise a Series B. For SaaS companies, she would be looking for accelerating growth. For e-commerce companies, they would need to be much further along and she doesn't like to see any money being spent on customer acquisition just yet. "The reality is if you have a great product and great offering, we think it’s a negative sign to spend money on customer acquisition," she said. 

Splash LA 2015 is around the corner. We already have a great lineup. Check it out here. Register early for Super Early Bird tickets. And if you want to apply to present in the startup competition, apply here.