Eytan Elbaz: On the Art of Building Businesses

Good morning Los Angeles!

If you want to be featured or know folks who want to be featured, feel free to contact me on LinkedIn. This week, we talked to entrepreneur Eytan Elbaz, serial entrepreneur who has spent his career building companies in the ads, media, content, and web3 worlds.

🏃♀️ Quick hits

The Founder: Eytan Elbazis a serial entrepreneur, with a big start in his company being acquired by Google, and translating that success and the learnings into multiple startups with cofounders he loves.

The Company: AfterParty, currently in stealth on a new project, previously working on creator opportunities in the web3 space.

Tip: Reach out to Eytan if you’re a founder working on a technical project that needs mentorship and maybe even angel investment.

Eytan and his flock of companies

Eytan Elbaz has been starting and building tech companies for over 20 years. He co-founded Applied Semantics in 1998, which became AdSense, Google’s killer app for Search monetization. After selling Applied Semantics to Google in 2003, Elbaz went on to co-found mobile gaming company Scopely in 2011 and influencer marketing platform Social Native in 2015.

With a calm and considered demeanor, Eytan reflected with us on his entrepreneurial journey, the lessons he’s learned, and how he views the future.

Building Teams and Culture

After his success with Applied Semantics, Elbaz realized the critical importance of finding the right co-founder. "I think in general, if there were an Eytan Elbaz model for co-founding a company, which I think really changed after Google… it is is picking the right founder. And so I was more concerned with picking the right founder than I was with what the business would be. And so I think getting to know [Scopely co-founder and co-CEO] Walter in 2010 and the caliber of the kind of person he is, I just knew I wanted to be in business with him."

Essentially, building a great team, for Eytan, comes before coming up with ideas and execution. As Eytan elaborates: “At Scopely, we certainly tried a handful of things. We probably tried four or five businesses before we got to games.” After they got to games, however, they took off. They built chart-topping mobile games like Monopoly GO and Walking Dead: Road to Survival, which eventually led to the company’s $4.9B acquisition by Saudi Arabia’s Savvy Games Group earlier this summer.

Key to Elbaz's success has been constantly iterating products based on customer feedback. "Constant iteration, constant pulling data back from customers and trying to figure out what is working and heading in that direction or seeing that just nothing is working and you really need to just dramatically change that product or put it down," he explained.

Applied Semantics is a good example of this. After two years of initial attempts to find customers for the company failed. But the team knew it was a good idea, so they retooled it and eventually relaunched successfully. But how did Eytan know whether to keep going?

Maintaining Startup Intensity

Elbaz stressed the importance of maintaining an intense commitment and optimism as a founder. "You need the intensity. You need to be unwavering in your commitment not to lose. So maybe being hard on yourself. So I would just say accept your journey. Like do what you're doing, work hard, and accept that this is the journey," he said.

He added that at any given time, "at least one of the co-founders has to be really optimistic...Somebody has to still believe because the problem with a startup is so many times we're filled with just like...There's so many hard walls wherever we're trying to get through."

Opportunities and Entrepreneurs

When asked what he's excited about today, Elbaz pointed to huge opportunities in agriculture and housing. "I think there's so much to do in agriculture. I think there's so much to do in housing. There's just so many ideas out there, I think, and I'd love to connect with awesome, hardworking, gritty entrepreneurs who are working on these hard problems and seeing if I can help them in my little way."

Eytan is excited to be mentoring other potential entrepreneurs and even angel investing, so reach out if you are looking for help building your next company!

"I think I can be really valuable to entrepreneurs who are starting their journey. And be a sounding board, help them iterate on product, try to open up my Rolodex where available and in many cases even be a kind of startup therapist. I'm finding it's rewarding for me to just see it come together."

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Jun 06 2024

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

• ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
• Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
• Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
• Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
• AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
• Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
• 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
• LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. -
• Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

• M13 co-led a $6.5M Seed Round for Code, a micropayments startup building upon the kin (KIN) cryptocurrency. - learn more
• Wonder Ventures has garnered $102 million in fresh capital commitments. -

Actively Raising

• ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
• CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
• Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
• Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. -
• StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Jun 06 2024

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🚀 SpaceX gears up for another stellar year, active raises, and more

Jun 06 2024

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

• Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
• SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
• SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
• Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
• Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

• SpaceX has already deployed direct-to-smartphone satellites in its first launch of 2024.
• Bill Gerstenmaier, SpaceX's vice president of build and flight reliability, announced that they are looking to increase flight rate to 144 flights during 2024.
• SpaceX will launch 5 astronaut missions in 2024 if everything goes to plan.
• Starlink will continue to build out the company’s satellite-internet megaconstellation in 2024 as they have permission to deploy double the current number of satellites in orbit.
• SpaceX is working to get other Starship vehicles ready, in keeping with the company's development philosophy, which prioritizes frequent test flights and rapid iteration.
• SpaceX is facing a complaint issued by a regional office of the National Labor Relations Board, for illegally firing employees in 2022 for circulating a letter critical of the company’s founder and chief executive, Elon Musk.

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

• CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
• McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

• ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
• CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
• Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
• Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. -
• StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

• LA Coffee Club x Popl - "Networking Gone Wild" Mansion Party & Panel - Join 310 Coffee Club for a panel discussion and networking in Beverly Hills. The panel will be discussing "Networking Tactics to 2x your Potential" with founders & CEOs including Jason Alvarez-Cohen of Popl, Nathan Green of Kin, Rory Garton-Smith of Checkmate, Christina Galbato of Create Her Empire, and Casey Adams ofListener.com!

Wednesday, January 10th

• Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
• Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading

• Tune in to TenOneTen Partner Minnie Ingersoll’s conversation with Josh Porter, co-founder of FirstLook Partners. Josh explains why he thinks smaller funds make the best investment opportunities. He has seen hundreds of decks and digs in on how to evaluate funds and his unique approach to co-investments. - listen here
• Fisker will add dealerships to EV sales model. -
• 4 Predictions for AI in 2024. -

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.