Why Los Angeles Should Have a Startup Fund

- 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.

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.

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...

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