By Mike Freeman
Read the Article on the Union Tribune
Can Southern California emerge as a technology hub on par with Silicon Valley over the next few years?
A new non-profit group led by former state Insurance Commissioner Steve Poizner, a serial tech entrepreneur, aims to make the southern part of the state a viable alternative for start-ups to the increasingly congested north.
The Alliance for Southern California Innovation, which Poizner formed with local universities, research institutions and tech company heavyweights, faces an uphill battle to reach its goal of making the region a second Silicon Valley by 2025.
The biggest hurdle is venture capital. Silicon Valley is jammed with homegrown venture funds that lure entrepreneurs. Southern California has relatively few. Consequently, Silicon Valley start-ups typically corral six times the amount of the venture money as Southern California young companies.
But Poizner, who came to Southern California after two of his start-ups were acquired by Qualcomm, thinks the region has a lot to offer tech entrepreneurs.
“There is an amazing collection of world renowned research institutes and universities,” he said. “That is where a lot of intellectual property gets created for start-ups. Combine that with available office space, great weather and a large number of engineers that graduate from Southern California universities and you have all the ingredients for a world class tech hub.”
Poizner has lured several big-name tech veterans to advise the Alliance, including Alphabet Executive Chairman Eric Schmidt. Qualcomm Founder Irwin Jacobs is on the Alliance’s board of directors.
The Alliance also entered into an agreement with Section 32, a $150 million San Diego-based venture fund led by Bill Maris, founder and former CEO of Google Ventures. The Alliance will provide referrals to the fund.
“Innovation isn’t confined to any one part of our state, and Southern California is ripe with top-tier investment opportunities in various sectors,” said Maris.
Orange County, for example, is known for its medical device technology. San Diego is strong in life sciences, genomics and wireless technology. Los Angeles is a hub for media and entertainment start-ups.
Deals made by Section 32 could help convince other leading venture capital firms to open offices in Southern California.
“You are seeing venture funds have dual offices now,” said Rory Moore, head of the EvoNexus start-up incubator in San Diego. “It used to be we have one office and you have to come to us. I think there is enough deal flow for a big fund to say, ‘We are going to stick an office in Southern California.’”
EvoNexus has signed a collaboration agreement with the Alliance, which also plans to work with other start-up incubators in the region.
Seven Southern California universities and research institutions, including UC San Diego and the Sanford Consortium for Regenerative Medicine, have joined the Alliance’s board of directors.
“To catch up to Silicon Valley is enormously challenging, but if successful it would have a trillion dollar impact,” said Poizner. “It can be done because Silicon Valley is full and Southern California has almost all of the pieces in place.”