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Most Successful Startups

The Business Journal’s list of Fastest Growing Private Companies represents a bumper crop of entrepreneurial successes. The list starts with Caulipower, an Encino health food manufacturer which has grown 18,020 percent since 2016. It ends with Bernards, a San Fernando construction firm that has grown a respectable 10 percent in the same period. The variety of companies on the list – from nutritional supplements to software to car dealers – demonstrates the strong home market the Valley region provides for startup companies. “There’s a growing ecosystem in the San Fernando Valley for people who want to be entrepreneurs,” Joanne Scillitoe, professor of entrepreneurship at California State University – Northridge, told the Business Journal. “But location is a challenge. … Investors tend to focus on Silicon Valley, Silicon Alley, Silicon Beach, etc.” A 2017 report from the nonprofit Ewing Marion Kauffman Foundation looked at the very “ecosystems” for developing companies referenced by Scillitoe. According to the report, a system to create successful companies involves three parts: entrepreneurial development, venture development and economic development. Entrepreneur development focuses on individuals or small teams; incubators and accelerators are the institutional manifestation. Venture development focuses on the selection and funding of candidate companies, featuring players such as angel investors, venture capital firms and public co-investment funds. Economic development tries to take established companies and expand their number of jobs, often through municipal agencies. On the entrepreneur development front, Scillitoe has worked with ToolBoxLA, an accelerator in Chatsworth, and Make In LA, an accelerator focused on hardware development, also in Chatsworth. She said these organizations provide legitimacy for startups, because acceptance for affiliation with an accelerator proves someone believes in the company. However, to successfully grow a company often requires industry-specific resources, such as distribution networks, mentors and a labor pool. As a result, “having accelerators that are broad can be a challenge,” she observed. Instead, she cited the Walt Disney Co.’s accelerator in Burbank, which concentrates exclusively on the convergence of media and technology. “We just don’t need more accelerators, but ones with a specific focus,” Scillitoe said. Looking to the future, Scillitoe said 25 to 30 percent raise their hand when asked if they would like to start a company. But she believes the next trend will be social-conscious companies. “There is a whole generation of young people who care about making a difference without profit; they just want to make life better,” she explained. “That’s the big opportunity we are going to see.” To qualify for the Fastest Growing Companies list, a business must have a minimum of $5 million in sales last year and have been in business for at least three years. Rankings were based on percentage revenue growth from 2016 through 2018. On the following pages, the Business Journal staff profiles the top four companies on the list and shorter write-ups for No. 5 to No. 10. Also, at a reception for the 50 companies on Oct. 29, the Business Journal recognized No.19 Scorpion as the Star Performer. The Valencia company has appeared on the list for four straight years with 246 percent revenue growth during that time.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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