Plug and Play San Diego Seeks New Ways to Get Startups into Program
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entrepreneurs into the Plug and Play program in Silicon Valley. Roudi says the Plug and Play San Diego could serve as “a great partner” for entrepreneurial programs at UC San Diego, San Diego State University, and the University of San Diego, as well as the myriad local startup groups that include EvoNexus, Connect, Tech Coast Angels, the San Diego Entrepreneur Center, Startup Circle, and Founders Institute.
“Our program is very complementary to what goes on at EvoNexus and other co-working venues or accelerators in San Diego,” Roudi says. As a bridge for local startups to Silicon Valley, he says Plug and Play provides “an avenue for them to get the connections they need to the companies, partners, and resources that are abundant in the valley.”
After operating virtually for the past two years, Roudi says Plug and Play would establish a facility of its own in San Diego, most likely in the downtown area.
More details are forthcoming, but creating a commercial space for tech startups makes sense, and Roudi has extensive experience in real estate matters. As the chairman and CEO of Interwest Corp., a La Jolla investment firm he founded in 2003, Roudi says he has led more than $1.5 billion worth of real estate deals.
Startups that are selected to particpate in the Plug and Play accelerator program in Silicon Valley give up a 5 percent ownership when they enroll. Plug and Play also provides a $25,000 convertible note to each startup, which converts to an additional ownership stake when the company raises capital in its next institutional investment round. Roudi said the size of this additional stake depends on the company’s valuation, which is typically between $2 million and $3 million.
The financial terms have prompted at least one San Diego startup to back out after it was selected for the Plug and Play accelerator. But Roudi argues that their goals are the same. “We want to accelerate your value,” he said. “We want to crate synergies and components that can expand your valuation.”
Roudi also has some experience as an entrepreneur. After graduating from Berkeley with a master’s degree in engineering (and an undergraduate engineering degree from Purdue), he founded a building maintenance company in 1985 called Coverall North America. From an initial investment of $8,000, he built Coverall into a global business with 68 offices around the world, 25,000 corporate customers, and $250 million in annual revenue. He moved the headquarters to San Diego after falling in love with coastal La Jolla.
Roudi sold Coverall in 1998 and started making investments in technology companies with some friends in the tech business—initially through Aspen Venture Capital and later through a low-profile firm in La Jolla called Catalyst Ventures. It wasn’t all good news, though. As he puts it, “We rode the Internet boom and the bust.”
In the process, however, Roudi says he found a passion for working with tech companies and startups in general, which eventually led to his leadership of Plug and Play San Diego.