The 27 start-ups have raised more than $100 million combined, with 90% of them now generating revenue, he said. He estimated that 10% or fewer are profitable, noting "that's normal for venture-funded tech companies" as they focus on adding staff and growing their user bases instead of optimizing short-term profits.
To launch an accelerator, program founders often invest their own capital and also raise money from venture capital firms and angel investors. StartEngine raised $15 million before accepting its first class and Amplify raised $4.75 million. Science, which calls itself a tech studio because it doesn't run a structured class program, announced $10 million in funding.
Each L.A. accelerator has its own specialty and approach. MuckerLab has become known for its deep Silicon Valley ties, while Amplify, which has strong entertainment industry relationships, is seeing success with more mature start-ups. StartEngine has arguably the most ambitious vision, aiming to pump out 500 L.A. start-ups in five years.
"I always tell entrepreneurs what you want to do is meet with the people running it and make sure there's a personality fit and you believe in their vision and what they can bring to the table," Science co-founder Peter Pham said.
Surf Air — a private all-you-can-fly membership airline geared toward people who travel frequently to Silicon Valley — this year was invited to join Santa Monica-based MuckerLab. Chief Executive Wade Eyerly, 32, said the program was like starting a company with training wheels and also likened the experience to "business school on speed."
"It was the best 6% I could have spent," Eyerly said of the stake in the company he gave up to be part of the accelerator. "Every major firm in L.A., they all will take our call. For other start-ups that don't have that access, getting into the door and getting past the gatekeeper is one of the greater challenges. Those doors flew open for us."