In 2011, tech lawyer Scott Alderton recognized a surge of accelerators and incubators emerging in Los Angeles to support early-stage startups.
As a co-founder of the tech-focused law firm Stubbs, Alderton & Markiles, he witnessed first-hand how various sectors, from environmental initiatives to healthcare, launched programs to foster innovation.
Alderton and his firm pioneered the Preccelerator Program, aimed specifically at early-stage startup founders.
Based in Woodland Hills and operating out of an office in Santa Monica, the program leveraged legal expertise to guide founders through complex legal documents, term sheets, and licensing agreements.
Over the years, the Preccelerator Program aided more than 50 local startups, helping them secure over $62 million in follow-on funding.
The program aimed to integrate themselves into a growing Silicon Beach ecosystem, strengthening ties with accelerators and supporting burgeoning entrepreneurs.
However, in late June of this year, the firm officially closed the Preccelerator Program, reflecting a larger trend across the region where one out of four Los Angeles-based accelerator programs established since 2010 have shuttered, according to PitchBook data.
Accelerators and incubators, originally designed to provide support structures for startup founders, appear to be in an identity crisis amidst the growing preference for remote work.
Economic viability played a major role in the decision to close the Preccelerator Program.
Alderton explained, ‘Accelerators don’t have physical space because entrepreneurs don’t really want to be in a physical space, they want to work remotely.’
There are undeniable benefits to sustaining localized tech sectors, particularly their ability to spur economic growth.
In Glendale, for example, tech is viewed as a high-growth industry capable of injecting money back into the local economy through space rental, job creation, and spending at local businesses.
David Crawley Delgado, the tech-focused senior economic development coordinator for Glendale, emphasized the city’s commitment to nurturing its tech sector by launching initiatives like a $1 million grant awarded to FoundersBoost and SmartGateVC.
This funding aims to stimulate early-stage startup development through various support programs.
FoundersBoost, which began its journey in cities like Los Angeles and Detroit in 2017, has crafted a SoCal B2B Accelerator in Glendale with past success in identifying suitable startups from local networks.
Brandon Gerson, one of the directors of the SoCal B2B Glendale program, noted that the geographical constraints of their program underscore the importance of local presence for scaling companies.
Stubbs Alderton & Markiles received a high volume of applications for its program—more than 350 per cohort—yet many were from outside California.
Alderton highlighted that local engagement was a crucial element of their approach and success.
The trend continues, as evidenced by Techstars’ announcement regarding its Los Angeles accelerator cohort for fall 2024, which indicated that a substantial portion of participants were located outside the immediate area.
Caldwell expressed concerns about the evolving landscape of local startup ecosystems, especially as the pandemic has shifted traditional support systems.
In light of these changes, he questioned the implications of funding structures that are not entirely local and whether they effectively contribute to the ecosystems that support emerging companies.
Caldwell, also a software engineer and leader of various tech startups, co-launched FoundersBoost with a vision of ensuring that early-stage companies received mentorship tailored to their needs.
The organization’s focus revolves around testing efficient support models to ensure that founders can access the resources they need, from expert guidance to essential networking.
In stark contrast, Stubbs Alderton & Markiles decided to pivot its strategies and announced a farewell event for its program graduates in June.
At the gathering, the firm showcased a visual portfolio of startups that had moved from concept to company through their support, proudly spotlighting the logos of each business that passed through the program.
Despite the program’s closure, Alderton affirmed their commitment to the startup ecosystem, stating, ‘We are just moving it over from a physical incubator to doing it through the law firm and the law firm infrastructure.’
The changing dynamics of startup accelerators reflect a broader shift, raising questions about the future of local tech ecosystems and the role of remote, global networks in fueling innovation.
image source from：labusinessjournal
