Opportunities for Entrepreneurs in 2023 and Beyond


5 Strategies We Use to Identify Great Startups

Yesterday, while sitting on stage at TiEcon Southwest, I was asked to answer the most difficult question facing all early-stage venture capital investors: “What information do you use to identify great startups?”  This is such a difficult question to answer because there is so little information available to forecast the potential for future success.  At Sunstone Management, we believe in creating partnerships to identify, engage, and support the growth of early-stage Founders.  Here are five strategies that we use to identify great startups:

  1. University Incubator Programs: universities have a proven track record for attracting both talent and venture capital investment from around the world. As discussed in a previous blogs universities are both centers of research and development as well as talent production.  This is why Sunstone Management invests heavily in university incubators and competitive pitch competitions like the Stella Zhang New Venture Competition at UCISunstone CSU Startup Launch CompetitionSunstone Innovation Challenge at CSULB, and Born in California to help us identify, support, and cultivate future investment opportunities.
  1. Accelerator Programs: after graduation, early-stage entrepreneurs need a place to develop their ideas, identify customers, and begin generating revenue. Another great partner that we use to identify talented early-stage entrepreneurs is the network of accelerators and startup development organizations (SDOs) that both recruit and support early-stage technology startups.  Accelerators such as New York City-based Lair East Labs have developed deep knowledge and expertise for identifying talented early-stage entrepreneurs who demonstrate growth potential once supported by subject matter experts, mentors, and coaches.  Sunstone Management not only provides financial support to these accelerator programs but often invests directly into the startups themselves, benefitting everyone involved.
  1. Local Governments: often, local governments are overlooked by private equity and venture capital investors, but city economic development departments are another great partner for identifying, attracting, and financially supporting the growth of early-stage entrepreneurs. After all, cities are constantly seeking way to attract and grow new business which create job opportunities and sales tax revenues to support city services.

As discussed in an earlier blog, each sector of the economy shares similar interests (such as business attraction and job growth), but each sector—public, private, education—has a different set of resources to offer early-stage entrepreneurs.  Our unique partnership with the City of Long Beach, which resulted in the creation of a new non-profit organization called the Long Beach Accelerator, has introduced Sunstone to dozens of successful startups we never would have met (that are now in our investment portfolio)!

  1. Non-Profit Investor Networks: after leaving their university or accelerator programs, early-stage entrepreneurs need access to subject matter experts to help them raise the capital they will need to hire employees, generate customers, and scale their products or services. These experts can help make industry connections, help secure contracts, and even serve as Board Members for early-stage startups to help them grow.  A critical partner for Sunstone Management are the membership-based networks such as TiE SoCal , who bring together experienced entrepreneurs and investors for special events, educational programs, and co-investment in early-stage entrepreneurs.
  1. Community Building: ultimately, building strong communities of Founders, Funders, and Friends, is at the heart of our strategy for identifying and supporting great early-stage entrepreneurs. This is why we are committing $1M over the next 5 years to early-stage entrepreneurship through the Sunstone Community Fund to help strengthen each of the key ecosystem partners described above.

Through innovative public-private-education partnerships between the city government, local university, and private venture capital investors, Sunstone Management continues to find and support fantastic early-stage entrepreneurs for our investors.  Through these partnerships, we also believe that our portfolio companies will have an even stronger chance of moving-on to later stages of investment.

More About Sunstone Management

Sunstone Management is an early-stage venture capital investment firm located in Southern California dedicated to building great companies through creative public-private partnerships.  If you believe in a similar investment philosophy, we encourage you to join the Sunstone Community today.  We are always seeking great Founders, Funders, and Friends to advance our vision for the economy and the world around us.  You can visit our website at sunstoneinvestment.com for more information or follow us on social media for upcoming events and announcements at LinkedIn, Twitter and Facebook.

News and Press Release

Startup Resources

We are passionate about supporting tech entrepreneurs like you by presenting an array of resources. Each resource is capable of assisting with the various stages of you venture, please review and explore the relevant programs that best suits your situation.

Sunstone Community Fund

The Sunstone Community Fund is committed to catalyzing partnerships that create economic opportunities for startup founders and communities throughout the United States. That’s just one of the reasons why we choose to give back to the community.