LA-based company calls for more local investment for start-ups in LA/SD corridor

July 31, 2008 – Pasadena, Calif. - Momentum Venture Management (www.mvmpartners.com), a Los Angeles company that helps entrepreneurs transform their technologies into viable, well-funded businesses, today called the lack of local funding for Southern California companies an obstacle to innovation in the region and a lost opportunity for local investors. Momentum - which has invested in a dozen startup ventures in Southern California in the last several years - specializes in helping early-stage companies overcome the "funding gap" by bringing experienced interim management skills, critical bridge capital, and a large network of relevant resources to achieve business traction and secure the next stage of investment.

Matt Ridenour, Managing Director of Momentum Venture Management, says, “We definitely have the talent and innovation here, and there are excellent opportunities for Southern California investors to support entrepreneurs in our own backyard. However, a clear gap exists when it comes to local support of early stage technology companies.” He points out that less than a third of the $1.2 billion invested in SoCal in the first quarter of 2008 came from local funds, and that less than 14 percent of the money invested in seed and early-stage SoCal-based companies came from VC firms based in Southern California.

"When you break it down, almost 10 percent of the VC-funded startups in the United States are based here, but we only have three percent of the venture capital. The gap is made worse by the fact that Southern California VCs tend to be later stage investors," Ridenour notes. "By any measure, Southern California is a center of innovation. We have some of the country's top universities spending more than $4 billion a year on research and development, and there are more patents issued annually in Southern California than in almost any other region of this size. The angel network groups have done a good job stepping in at the earliest stages of investment, but there are very few groups there to back them up with that first institutional round of funding”.