How These 4 Startups Raised Millions in San Diego

How These 4 Startups Raised Millions in San Diego
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By Beck Bamberger

Raising VC money is hard. The rejection rate is about 90-95 percent, give or take your network. That’s considering if you are in Silicon Valley, which still reigns as the top market globally -- claiming more than a quarter of all venture funding. Still, plenty of San Diego-based companies garnered millions of funding dollars this year despite San Diego’s 3.3 percent portion of global funding (which does rank sixth globally) and lack of long standing VC funds like Sequoia, NEA and DFJ.

How’d they do it? I asked. I’m a San Diego native, in the tech scene as the founder of a tech-focused public relations firm, and I'm usually cursing myself when I forget a winter coat for my trips in August to San Francisco. I often rebut founders who claim that fundraising is too tough in this town, that they can’t get “big” firms behind them without a zip code on their contact page starting with 94, or that money here is “just for biotech.” This article is part proof, part parable that VC funding can and is being done for non-biotech companies right here in America's Finest City.

“The first checks were from us”: HomeBay, founded in 2014, is the Turbo Tax of the CPA industry, but for residential real estate. The company is on a mission to eliminate the traditional full-service brokerages who take up to 6 percent commissions for selling homes. The founding team (along with family and friends and investors from co-founder Ryan Owen’s previous company) funded the initial $2 million to launch the platform for a California deployment. An additional $3 million was raised from Foundation Capital Serra Ventures, Sierra Angels, EV15 of Hong Kong and a host of individual investors. "The confidence of our previous investors to invest with us again combined with our insiders writing checks paved the way for a successful capital raise," said Ryan Owen, Co-Founder of HomeBay. Since launch, the company has sold more than 500 homes which has saved home sellers more than $7 million.

Owen’s comments aren’t atypical. One of our AI clients in San Francisco raised their $9 million Series A in a similar fashion, tapping former investors the founder knew for years and gave a great return for his first acquired company.

“You can’t ‘kinda’ raise money”: SkySafe keeps skies safe by detecting and stopping unauthorized drones from entering sensitive air spaces such as prisons, airports, and military bases. MIT classmates Grant Jordan, Scott Torborg, and Michael Spindel and Paul Wicks, whom Jordan met at UCSD, launched SkySafe in 2015. This July, the company announced an A round of $11.5 million, led by Andreessen Horowitz, the crème de la crème VC fund based in Silicon Valley. “Trust me, we didn’t ‘phone it in,'” laughed Jordan. “We were dead serious about raising, and I made it my full time job for several months. It IS all consuming. We (the founders) had to find the exact right investor who would deeply understand our space. While we did the raise, we kept the team focused on executing the current contracts so it didn’t become a distraction for the employees.” Skysafe recently closed a $1.5 million Department of Defense contract through DIUx, the Defense Innovation Unit Experimental and will provide counter-drone tech to the Navy Seals.

One friend of mine, also in San Diego, has raised $20 million privately over the last year (which isn’t public information just yet). As the founder, she committed herself for six months to the raise, letting her global team of 40 deploy the trials, operations and contracts with major firms.

“We raised it chunk by chunk”: How do most people find doctors? More than 70 percent start online to find health care providers, claims Doctible. The problem is, most health care providers don’t do a great job of marketing themselves online, nor do they know how to convert and retain patients. Doctible was founded in 2014 and closed $2.2 million funding round this June from lead investor ClearVision Equity Partners. “The key in raising capital was doing it in chunks and not a mega-round,” said Ajit Viswanathan, CEO and co-founder of Doctible. “Once we had a working concept and showed promise, many local angel investors participated in our first seed round led by Bootstrap Incubation,” Viswananthan added. Eric Gomez, one San Diego angel investor made several introductions locally, and Tech Coast Angels cut the first check of $100,000. Doctible has raised $4.2m to date and now counts customers in more than 48 states.

Another San Diego-based company (which my PR firm represents) did a similar "drip campaign" of fundraising, eventually securing more than $7 million from angels, strategic corporate partners and a few traditional VC funds.

“We went for niche-focused angels”: iAssay is betting big on blood. Usually, blood has to be driven to labs for diagnosis which takes time and money, but iAssay’s Point of Care (POC) solution provides a patient test panel in minutes, rather than hours or days, right next to the patient and is Cloud-connected. Lonnie Adelman founded the company in 2013 and worked on MVP, team building and validation testing for three years, completing its largest investment transaction to date this year. “We didn’t even consider fundraising then,” Adelman claims. “We needed to complete the basics, including our MVP, and once we had that, I knew we wouldn’t be a VC deal. This would be an angel deal for angels with deep life science and medical device backgrounds.” One of iAssay’s major investors is Dr. Deen Wong, a medical doctor and pathologist who constantly witnesses the problem iAssay is solving, says Adelman. “I had a very pointed list of people to call for money, but they were the right people,” Adelman adds. “Specialization with investors is just as important as your company’s specialization.” iAssay now has a pilot program with National University and UCLA under way.

A number of VCs and angels I've spoken to even shun entire industries such as biotech and crypto. One angel told me, "If the product needs FDA approval, I don't touch it. I have zero experience in taking drugs or medical devices to market, so I stick to my consumer verticals."

San Diego-based companies have raked in the funds this year with strategies of full time commitment, niche focus, founders’ cash first and blanketing the local startup scene. In short, it’s being done. Anderson concluded, “I think there are just a lot of crybabies in town who think it can’t be done.” Happy raising.


Beck Bamberger founded BAM Communications in 2007 and has since founded three other businesses, Bite San Diego, Nosh Las Vegas and Pangea Pal.

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