7 ms·
SV is the dominant market for funding. NYC is credible but still not ideal (and some of the best NYC firms do a lot of investments outside NYC). It's a power
by rdl 11y ago
SV is the dominant market for funding. NYC is credible but still not ideal (and some of the best NYC firms do a lot of investments outside NYC). It's a power law distribution...SFBA, then NYC and London a lot lower down, then a long way down with a few places (LA, Seattle, Israel, Beijing/Shanghai for Chinese companies, etc.) punctuating the cliff. And indeed, the terms I've seen from non-SFBA investors are invariably far shittier than anything from SF...valuations are sometimes comparable, but lots of stupid hair on non-SFBA deals, and the bad non-SFBA investors are way way worse than the bad-SFBA investors.
VC terms have gotten less bad over the past 15y, at least among the best firms.
- _sentient 11y agoNot sure that's entirely accurate: http://www.citylab.com/tech/2016/01/the-rise-of-global-startup-cities/426780/ http://www.citylab.com/tech/2016/01/the-rise-of-global-start... While SF and SJ lead the pack, it's far from a power law distribution. To be fair, much of the venture deals in Boston / San Diego are life sciences / biotech, and that does you relatively little good if you're a software startup. Totally agree about terms though. Non valley investors tend to target much lower valuations and stipulate weird conditions. This is partly a function of outsized outcomes being fairly rare in tier 2 and tier 3 markets though, so it's not exactly irrational for investors to assume a lower EV for a startup and price it accordingly. What you really lose is this honest-keeping function that you get when there's sufficient competition for deals. Fear of being excluded or seen as "unfriendly" to founders tends to keep potential bad actors in line, which reduces some of the deal hair and benefits the overall ecosystem.