Irwin and Joann Jacobs. Conrad Prebys. Denny Sanford. Darlene Shiley.
These are just a handful of San Diego’s storied philanthropists whose namesakes can be found on parks, theaters and university campuses. Inspired by the region’s history of philanthropists who shaped San Diego, there’s a new local nonprofit trying to create a sustained legacy by investing $400,000 in four startups.
The TL Foundation is a nonprofit organization that is investing in San Diego’s startups as a way to raise money for future projects that support jobs and business growth in the region.
The ambitious effort is being led by CEO Mike Krenn, who is also the head of the region’s leading voice for the startup community, Connect San Diego.
Krenn – who is working alongside a board of nine local business leaders – said they wanted to start something that sustained a lasting impact beyond a simple donation.
The foundation’s name pays homage to another famous San Diego philanthropist, Kate Sessions, who has been credited with planting hundreds of trees in Balboa Park. She has been called the “Mother of Balboa Park” and simply the “Tree Lady,” which Krenn said inspired the name of the nonprofit (TL for short).
In the short term, the goal is to invest in startups that will grow the foundation’s coffers.
“But as the fund grows and you get (startup) exits, and it continues to grow, the idea is that the stewards of this fund … could peel off money and throw it to initiatives that don’t traditionally get philanthropic support,” such as STEM projects and helping small businesses in underrepresented areas, said Krenn. “All the things that sort of fly under the radar of traditional economic development.”
How does it work?
The TL Foundation was jump started by donations from San Diego philanthropists Buzz Woolley and Malin Burnham, totaling $2 million. That money is then being invested into local startups.
The catch is – no one is getting rich off of those startup investments. Unlike a traditional venture capital fund where investors and managers get a percentage back from a startup’s success – all of the returns will go toward future TL Foundation investments, Krenn said.
That investment is a tax-deductible donation from the philanthropist. Ultimately, the foundation is using startup investments as a jumping off point to raise money for future programs for local businesses and economic development.
“I mean, there’s not many opportunities for a philanthropist where you can give one dollar and it can turn into 10,” Krenn said of the intention for investments to multiply.
It’s a unique model he hasn’t seen anywhere else before. The idea is that as San Diego’s venture capital scene continues to grow exponentially – startups raised $4.1 billion last year – so should the TL fund, Krenn explained.
“We’re trying to make San Diego better, not just bigger,” he said. “But there’s also gaps that need to be filled.”
For example, Krenn said there’s a lot of high paying jobs concentrated in Sorrento Valley. However, not many of those jobs exist in East County or South Bay, so he wonders if the TL fund can do something to change that.
Another one of his hopes is that the local startups they invest in will do well and the founders will eventually want to give back to this foundation.
The fund’s first investments
Last week, the foundation announced its first round of investments into four San Diego startups, who received $100,000 each.
Krenn said it was important they chose startups that have a strong potential for a return on investment and they reflect the region’s innovation ecosystem. These startups include biotech, clean tech and software companies: Condor Software, Looq, Papillon Therapeutics and Resolute Science.
One of these companies, Looq, has developed cameras and an artificial intelligence software that creates three-dimensional models of a landscape. Their software is used by utility companies and engineering firms to predict when certain infrastructure, such as powerlines, could fail. Instead of deploying large crews to survey a site, the technology is aimed at improving efficiency.
Dominique Meyer was a student at UCSD when his co-founder Shreyas Niradi, developed the idea for the business. Today, the company has grown to 30 employees and raised $3.75 million since it started in 2021.
This new infusion of funding from the TL Foundation will help Looq build its team out and launch their product into global markets.
“It’s such a great way of giving back to the local community that is very heavily focused on entrepreneurship,” Meyer said of the TL Fund. “The first few years of a startup are some of the hardest because you gotta build a trust, build a vision when you have very little. But without that initial injection of capital, it’s very hard to get things off the ground.”
Meyer said he is excited by this new venture investment and how he hopes it will pay back and accelerate many startups in the coming years.
Looq.AI and the other three other startups the TL Foundation invested in will present their pitches next week at Petco Park. It is part of the third annual Innovation Day event hosted by Connect, which brings 100’s of startup founders, investors and San Diegans together for a celebration of the region’s innovation ecosystem.