sfvbj.com SAN FERNANDO VALLEY BUSINESS JOURNAL LOS ANGELES • GLENDALE • SANTA CLARITA • BURBANK • CONEJO VALLEY • SIMI VALLEY • SAN FERNANDO • CALABASAS • AGOURA HILLS • ANTELOPE VALLEY

Volume 22, Number 1 THE COMMUNITY OF BUSINESSTM January 9 - 22, 2017 • $4.00 Inside StoneFire Sale Could Stoke Growth Warehouses Rise RESTAURANTS: Investor to finance expansion by co-founder’s sons. On Mining Site CONSTRUCTION: By HELEN FLOERSH Staff Reporter Land scarcity prompts project on gravel pit. StoneFire Grill, the homegrown restaurant that started in Valencia almost 17 years ago, now em- By CAROL LAWRENCE Staff Reporter ploys more than 1,000 workers at eight locations – and with a recent majority investment by New York Developers don’t usually buy sites with unsta- private equity firm Goode Partners LLC, it’s poised ble ground, but after hunting for a large swath Bottle caps keep for further expansion. of industrial land in the San Fernando Valley, track of marijuana Mary Harrigan and her sister Maureen Xebec settled on a plot in Sun Valley. consumption. launched the eatery as a family business – Mary’s Two years and $58 million since its purchase PAGE 3 sons Kyle and Justin Lopez worked the cash register of a former gravel mine, the Seal Beach company in the beginning. Now the family can leave the mon- is laying down steel rebar and concrete as a foun- ey worries to their new partners. dation for a 255,500-square-foot warehouse – the “We’re excited because Goode Partners brings the first phase of the Sun Valley Business Center. News & opportunity for growth in a way that we don’t have to Despite the risks, the site fits Xebec’s strategy PHOTO BY DAVID SPRAGUE of providing space to e-commerce companies Analysisy Please see RESTAURANTS page 33 Family: Mary Harrigan with son Justin Lopez. that demand warehouses in the middle of large urban markets.

Please see CONSTRUCTION page 6 Cloudy Future For Qualstar? TECHNOLOGY: Company adapts He’s about to freeze all of as data storage market evolves. Paramount’s films. By MARK R. MADLER PAGE 5 Staff Reporter Three years after taking control of tech manu- facturer Qualstar Corp., Chief Executive Steven The Lists Bronson has not completely turned the company around but believes it’s headed in the right direc- Property tion – despite new competition for its customers management from the cloud. firms and The Simi Valley producer of data tape storage franchisers. and power supply products has money in the bank, PAGE 11 Please see TECHNOLOGY page 31 Time Crunch: Ultratooth inventor MAIL TO: Dr. Sargon Lazarof in Simi Valley. SPECIAL REPORT FINANCIAL SERVICES SMILE IN A FLASH Dentist’s quest to commercialize quick implants HI EY E OU L AIN ONR CROW BL By STEPHANIE HENKEL Staff Reporter royalty or busy executives who don’t want to vis- B it a dentist multiple times or suffer cut and swol- MONEY BROKERS: With an ace deal-maker here does a Crown Prince of Saudi len gums for months, it’s an attractive option. in the White House, investment bankers are Arabia go for dental work? Lazarof started designing the prototype Ultra- looking forward to a prosperous year. Also, this W To Dr. Sargon Lazarof at the tooth in 1989 and completed his first implant in a Special Report tells how two Valley companies Sargon Dental & Implant Institute in Encino. human the following year. However, 26 years later are dividing up the market for financial “close Lazarof is the inventor of Ultratooth, an FDA-ap- – after countless studies, patent challenges and a management” software. proved dental implant procedure that can be com- lawsuit against USC that escalated to the state’s BEGINNING ON PAGE 16 pleted in one hour and provides a new tooth with highest court – Lazarof and his business partner full functionality immediately after the surgery. Rami Rostami are about to roll out their market- Ultratooth has a lower price than tradition- ing plan for Ultratooth, a product they say is going al dental implants, but it’s main benefit is the convenience of quick turnaround. For celebrities, Please see HEALTH CARE page 32 PHOTO BY THOMAS WASPER What it takes to get ahead. sfvbj.com/subscribe

18 SAN FERNANDO VALLEY BUSINESS JOURNAL JANUARY 9, 2017 FINANCIAL SERVICES

SPECIAL REPORT Whitmire. “They were like, ‘Why would you ever leave the Westside? You’re not going to be able to hire anyone.’” However, Whitmire estimates that he saves about $30,000 a month on rent when compared to Silicon Beach leasing prices; he puts the money toward growth. He said the strategy is working as the company just experienced its most successful quarter ever. During the three months ended Sept. 30, Flo- Qast increased revenue by more than 300 percent year-over-year, added close to 40 new customers and grew its workforce by nearly 90 percent. “I think maybe we (accounting compa- nies) are a little more prudent about our bud- gets based on our backgrounds,” Whitmire added. “I certainly know that’s why we’re here (in the San Fernando Valley).”

Direct competition Now that BlackLine is public, Whitmire said the company is going global and pur- suing bigger clients, but he also has seen it dipping down in the mid-market, which is FloQast’s target market sweet spot. He said his company’s software is designed for businesses with about 30 to 40 accountants and believes FloQast may soon start meeting Blackline in more head-to-head competition for the same customers. In the last year, FloQast’s client list has grown and added big-name organizations such as Los Angeles Lakers, Golden State War- riors, Zillow Group Inc. of Seattle and Ven- ice-based Dollar Shave Club Inc. But with growth, the company needs to expand its staff to meet demand, and it is drawing personnel from the Valley employment pool. FloQast currently has approximately 30 employees and plans on doubling that number by the second quarter. With the 101 tech corridor blossoming along the stretch of freeway that connects the Conejo and San Fernando val- leys, talent is no longer hard to come by. “Hiring is so much easier here,” Whitmire said. “You get to pitch that the employees Closer: Michael Whitmire, won’t have to drive to the Westside anymore chief executive of FloQast, and get two hours of their day back.” in Sherman Oaks office. BlackLine’s Spanicciati also cited local recruitment potential as a draw to move to Woodland Hills as the company’s goal was BlackLine for comment, but the company to hire 50 new employees within the first declined as it has recently entered into a quiet year of the relocation. Now BlackLine has period before its next earnings release. over 500 employees worldwide, according to Bloomberg. OPEN MARKET Why the Valley? Outside of the Valley, other specialized The two companies in the same software close management software companies market ended up in the Valley by different include Trintech Inc. of Addison, Texas, as paths. BlackLine was founded in the Valley well as Sarbanes-Oxley compliance compa- TO CLOSE BOOKS in 2001. The software developer moved its nies Workiva Inc. of Aimes, Iowa and Sox- headquarters from Calabasas to Woodland hub Inc. in La Palma. By STEPHANIE HENKEL Staff Reporter BlackLine develops software similar to Hills in 2011, which was primarily driven by However, despite industry growth, USC FloQast with some key differences, which growing pains and business incentives offered accounting professor Daniel O’Leary said Two Valley companies are approaching a include non-compatibility with Excel, and by the city of Los Angeles at the time. there are inherent risks these companies may narrow niche of the financial software indus- serving larger-sized client companies, like From the tax incentives – which included experience down the line. try from opposite ends of the market. Coca-Cola Co. and GoDaddy.com – two of a hiring credit and a gross receipts tax exemp- Currently, a lot of these niche software On one end, there’s FloQast Inc., a Sher- its current customers. tion – the company was able to save approx- offerings can be integrated with established man Oaks startup founded in 2013 that devel- The Business Journal reached out to imately $350,000 over a three-year period, enterprise resource management, or ERP, ops accounting “close management” software, said Chief Marketing software products, such as NetSuite’s. But if which streamlines and integrates the processes Officer Mario Span- these ERPs begin getting blamed for prob- of closing out financial books and reconcil- icciati, in a 2011 lems from these specialty products that are ing accounts. Its product works in conjunc- article featured in the integrated into their own and realize they tion with spreadsheet software program Excel Business Journal. are missing a market opportunity, they may from Microsoft Corp., financial applications FloQast, on the move into FloQast and BlackLine’s territory. from NetSuite Inc. and document storage plat- other hand, started “Niches tend to disappear and find a way forms from Dropbox Inc. and Google Inc. at a Westside accel- into the main software,” O’Leary said. “At “When we started integrating with a lot erator and moved to some point, I would expect companies to have of different systems, that’s when the product the Valley in light of close software embedded into their software.” made sense,” said Michael Whitmire, chief rising rents in Silicon He said companies could go about this executive of FloQast. “Many businesses will Beach. in two ways: by creating their own specialty be built in the (accounting software) space; “I got a lot of offerings or acquiring a successful company I truly think this is the future of accounting.” grief from our inves- already solidified in the space, similar to the On the largest end of the market is Black- tors for moving the acquisition of NetSuite by Redwood City- Line Inc., which also produces cloud-based company here,” said based Oracle Corp. close management software. The Woodland Nevertheless, FloQast isn’t looking toward Hills company went public in October, and Dashboard: the buyout route. It hopes to go public like its by market close on the first day of trading, FloQast software West Valley counterpart BlackLine. the stock gained 39 percent to $23.70 from helps accountants “That’s the goal,” Whitmire said. “We an issue price of $17, valuing the company close and reconcile plan on doing another round of funding and above $1.1 billion. financial records. going bigger from there.”