The nicknames, neighborhoods, and jargon that come up constantly once you're building here, from what “The Gundo” means to what actually happens when your SAFE converts.
The neighborhoods and nicknames you'll hear on repeat once you're actually in the scene.
El Segundo's nickname, and if you're building anything with hardware in LA, you'll hear it constantly. It used to be cheap warehouse space next to LAX, then SpaceX moved in, and a wave of ex-SpaceX engineers started spinning out their own companies a few blocks away. Low rent, huge floor plates for building physical stuff, and a talent pool that never had to leave the neighborhood.
SpaceX is the anchor, but the real story is everything that grew up around it: a whole cluster of aerospace and defense startups that picked the South Bay over the westside's more consumer-software scene.
LA's westside tech corridor: Santa Monica, Venice, Playa Vista, a bit of Marina del Rey. It became a real startup hub once entertainment and tech started blending together in the 2010s: beach lifestyle, ad agencies and studios down the street, and enough VC money finally showing up to make it stick. Google taking over Howard Hughes' old aircraft hangar in Playa Vista is the moment people usually point to.
Where The Gundo is hardware and defense, Silicon Beach is consumer apps, media tech, e-commerce, and adtech, the stuff you'd expect to find near Venice.
San Diego's answer to Silicon Beach: its biotech cluster, centered on the Torrey Pines mesa right next to UC San Diego, the Salk Institute, and Scripps Research. Decades of academic labs spinning out into real companies, plus lab space that's cheaper than the Bay Area, built one of the biggest biotech scenes in the country outside Boston and Northern California.
If you're building biotech anywhere in Southern California, San Diego is usually where the specialized investors and lab-trained talent already are.
The stretch of LA's South Bay, El Segundo, Hawthorne, Torrance, Redondo Beach, that's been building airplanes since World War II. Douglas Aircraft, Northrop, and Hughes Aircraft all had major plants here, and that history isn't just trivia. It's a big reason SpaceX picked Hawthorne, and why the newer wave of space and defense startups didn't have to start from scratch.
A lot of the engineers leading today's startups came up through the old aerospace primes first. The corridor connects the two eras more directly than people realize.
Downtown LA's smaller, quieter startup cluster: less about consumer brands, more fintech, media, and B2B software. It's grown alongside downtown's broader comeback over the last 15 years or so.
Founders here usually want LA's talent without paying westside rent or competing with ad agencies for office space.
Orange County's startup scene, centered in Irvine and fed by UC Irvine's research pipeline. It skews enterprise software, biotech, and medical devices: less flashy than LA's consumer startups, more capital-efficient office park.
OC doesn't get the press LA or San Diego does, mostly because B2B companies don't make for great headlines the way a DTC brand or a rocket company does.
The words that come up specifically because of what SoCal builds: space, defense, and hardware.
Shorthand for the modern, venture-backed space industry, SpaceX, Rocket Lab, Relativity, Vast, building rockets and satellites as actual businesses instead of relying purely on government contracts. It's the opposite of "Old Space," the legacy primes like Boeing, Lockheed, and Northrop that grew up almost entirely off government money.
Southern California, especially the South Bay, is basically ground zero for New Space in the US. SpaceX's gravity pulls almost everything else along with it.
Tech built to work for both commercial customers and the military, the framing a lot of SoCal defense startups lean on now that Silicon Valley VCs are finally willing to fund defense again. Calling yourself "dual-use" widens who can buy your product and makes investors who used to avoid pure defense plays more comfortable writing the check.
This framing basically grew up around The Gundo. Most of the highest-profile companies using it are headquartered there or nearby.
Startups building actual physical things: rockets, robots, batteries, chips, factories, instead of pure software. It takes more money, more time, and more specialized engineers than a typical app, but SoCal's aerospace roots and manufacturing base make it a natural home for this kind of company.
This is probably the biggest way SoCal's startup scene differs from Silicon Valley's software-first history.
Every term that shows up the second money enters the conversation.
The very first money a startup raises, usually before there's real revenue, or even a finished product. It's meant to buy enough time to build an MVP and hire a few people so you can go raise a real seed round. Checks are small, and usually come from angels, friends and family, or funds that specialize in writing the first check.
The first serious round of venture funding, raised once you've got something to point to: early users, some traction, an early product. Seed money funds the work of finding product-market fit, with the goal of raising a Series A once you can actually prove the thing works.
The rounds that follow seed, each bigger than the last and tied to a different milestone. Series A usually funds scaling a product that's already working; Series B funds pushing into new markets; Series C and beyond fund the push toward profitability or an exit. Every round comes with a new valuation, new investors leading it, and usually a new board seat.
A financing document Y Combinator invented in 2013 that lets a startup take money now and give equity later. It converts into shares once you raise a priced round, without anyone having to agree on a valuation up front. It's faster and cheaper than a full equity round, which is why it's basically the default for pre-seed and seed money now.
The SAFE's older sibling: same basic idea, raise now, convert to equity later, but structured as debt instead. It accrues interest, has a maturity date, and gets paid back if the company never raises again. Some investors still prefer it because it comes with debt-like protections a SAFE doesn't have.
The document that lays out the proposed terms of a deal, valuation, how much you're raising, investor rights, board seats, before the lawyers turn it into real legal paperwork. It's not technically binding, but signing one is both sides saying "we're serious about doing this."
The record of who owns what percentage of your company: founders, employees with equity, every investor from every round. It sounds boring until it's messy, at which point it can genuinely tank a fundraise or an acquisition. Keep it clean from day one.
What happens to your ownership percentage every time the company issues new shares, whether that's a new funding round or a new employee's equity grant. You're always trading dilution for something, capital or talent, which is exactly why round size and valuation are worth fighting for.
A clause in almost every VC round saying investors get paid back before common shareholders, including founders, if the company gets sold or shut down. Usually it's just their money back, sometimes with a multiple on top, before anyone else sees a dollar. This matters most in a modest exit, where there might not be enough left over for everyone to get their full share.
An investor's right to put more money into your next round so their ownership percentage doesn't shrink. It's usually negotiated into early checks, and it's a pretty common source of tension: investors want to protect their stake, founders want flexibility on who's in the next round.
A bridge round is smaller, faster money raised between two real priced rounds, usually just to buy time until you hit a milestone worth raising a bigger round for. A down round is a priced round at a lower valuation than your last one, which dilutes everyone more and can trigger protections for earlier investors. Both show up more often when fundraising markets get tight.
An independent appraisal of what your common stock is actually worth, required by the IRS, that sets the price employees pay to exercise their stock options. You need a fresh one after every priced round, and periodically otherwise. Skip it, and employees can end up with a surprise tax bill.
A federal tax rule, Section 1202, if you want to sound smart about it, that lets founders and early investors in eligible C-corps skip capital gains tax on some or all of their shares when they sell, as long as they've held the stock at least five years and the company qualifies. It's one of the biggest, most overlooked breaks in startup tax planning. Worth understanding before you incorporate, not after you exit.
The stuff that matters after the fundraise: product, growth, and how equity actually works.
The smallest version of your product that actually tests whether anyone wants it, on purpose, missing everything that isn't essential. The point isn't to ship something impressive, it's to answer the real question fast, without burning months and cash you don't have yet.
The moment your product actually satisfies real demand. You'll know it by organic growth, people sticking around, and customers who'd genuinely be upset if you disappeared, more than any single number. Almost nothing else matters until you find it. Fundraising, hiring, scaling, none of it works without this first.
How much time you have left before the money runs out: cash on hand divided by monthly burn. It's the number that decides how much time you actually have to hit your next milestone before you're forced to raise again, or worse.
How much cash you're spending each month beyond what's coming in. Track both gross burn (total spend) and net burn (spend minus revenue). Net burn is the one that actually tells you how long you've got.
Annual and Monthly Recurring Revenue, the standard way to measure the predictable, subscription part of your revenue. Investors care about these numbers a lot more than one-time sales, because recurring revenue is a much better predictor of what next year actually looks like.
Total, Serviceable, and Serviceable Obtainable Market, a way of sizing your opportunity from "everyone who could theoretically buy this" down to "what we can actually realistically capture." Investors ask for this breakdown to sanity-check whether your ambition matches a market big enough to justify a venture-scale bet.
Vesting is the schedule you earn your equity on, usually four years. The cliff is the minimum time, typically one year, before any of it vests at all, so the company isn't stuck giving real equity to someone who leaves after two months.
The chunk of equity a company sets aside specifically for employees, current and future. Investors usually make you carve this out, or grow it, right before a priced round closes, and it dilutes existing shareholders, usually the founders, not the new investors.
Bootstrapped means growing off your own revenue, savings, or debt: slower, but you keep full ownership and control. Venture-backed means trading equity for outside capital to grow faster, usually chasing an outcome big enough to justify the risk investors took. Same goal, very different incentives along the way.
An accelerator, think Y Combinator or Techstars, is a fixed-length cohort program that gives you a bit of funding, mentorship, and a demo day, for equity, usually over about three months. An incubator is looser and longer, sometimes with no funding or equity attached, meant for ideas that aren't ready to raise real money yet.
Y Combinator tags every cohort with a season and year, W26 for Winter 2026, S26 for Summer 2026, and founders use it constantly as shorthand for when they went through the program. It also doubles as a rough age check: investors and founders both use batch codes to gauge how established a company is.