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Why do you need access to so much money that you can't get it in Pittsburgh or remotely? Seems like an insanely cheap place to bootstrap. Get to break even far

Why do you need access to so much money that you can't get it in Pittsburgh or remotely? Seems like an insanely cheap place to bootstrap. Get to break even far faster, etc... If you're living in Manhattan now, you could reduce costs by over 75% by moving back and put it into the next venture instead. Plus, the kids get the dog and a yard.

pesenti 10y ago
I bootstrapped my startup so I indeed never needed outside money (well rather never really tried given that we started during the 2000-2002 nuclear winter). But if I had to do it again, especially in the current VC environment, I would raise money. It can be slow and tedious to bootstrap (took us 12 years to grow to 125 people and exit) and a lot of good startups in Pittsburgh seem eternally stuck in the seed stage.
- prgmatic 10y ago
  Even if you do need to raise money, why is it a necessity to run your company out of the same city that your investors are in? I've never had to personally raise money for a startup, but I see a lot of the face-to-face meetings starting off as warm email/phone intros. Even if you have to constantly travel to NY/CA/* to meet prospective investors isn't it still a better value to run a business somewhere with a low cost of living?
  - pesenti 10y ago
    You don't. But investors tend to invest a big chunk of their money locally (they don't like to travel for board meetings...)
    - tim333 10y ago
      I can see that. Imagine you're someone like Sequoia with "1,156 Investments in 664 Companies" according to crunchbase. It would do your head in flying all over the country to see them all. Maybe the answer is to come to where the money is for raising and then set an office back home.
  - x0x0 10y ago
    Part of what an investor provides is a network. That network tends to be where the investor is.
  - BinaryIdiot 10y ago
    > Even if you do need to raise money, why is it a necessity to run your company out of the same city that your investors are in? It's almost never necessary but try telling an investor that. The amount of investors that said no to the start-up I'm currently working at, simply because it was on the East coast (that was literally the only reason given), was simply astonishing. In a world where you can be anywhere in essentially, physically, in less than a day (typically hours domestically) or instantly digitally technology investors would stick their noses up due to physical location. I love SF but it just didn't make sense at the time and it's still insanely expensive there!
    - VLM 10y ago
      > "digitally technology investors would stick their noses up due to physical location." Either they're correct, although there seems to be no logical reason why or any sane rationalization for it, or they're leaving great piles of money on the table for more open minded investors to snatch up, or they're not really in it for the money (retirement hobby, its for social signalling, etc).
eloisant 10y ago
The problem is you'll be putting out a 5 persons team, hope you don't get a Silicon Valley competitor who hires a 50 persons teams and spends ad money with their VC funding.
- MicroBerto 10y ago
  I guess I forgot that not everyone is doing something because they're passionate about it and are willing to stick it out in the long haul (supposedly that is "tedious" nowadays). They're in it for the fame or "billionaire status" or whatever high hopes they wish to achieve. But here's what's hilariously ironic for OP: After achieving that mystical billionaire status, what would he likely end up doing? Serious chance he buys a plot of land outside of Pittsburgh with a dog and yard for his kids and now grandkids. All things he can already afford to do right now!! Call me old fashioned, but I just don't get the point of that exercise.

pesenti 10y ago

I bootstrapped my startup so I indeed never needed outside money (well rather never really tried given that we started during the 2000-2002 nuclear winter). But if I had to do it again, especially in the current VC environment, I would raise money. It can be slow and tedious to bootstrap (took us 12 years to grow to 125 people and exit) and a lot of good startups in Pittsburgh seem eternally stuck in the seed stage.

prgmatic 10y ago
Even if you do need to raise money, why is it a necessity to run your company out of the same city that your investors are in? I've never had to personally raise money for a startup, but I see a lot of the face-to-face meetings starting off as warm email/phone intros. Even if you have to constantly travel to NY/CA/* to meet prospective investors isn't it still a better value to run a business somewhere with a low cost of living?
- pesenti 10y ago
  You don't. But investors tend to invest a big chunk of their money locally (they don't like to travel for board meetings...)
  - tim333 10y ago
    I can see that. Imagine you're someone like Sequoia with "1,156 Investments in 664 Companies" according to crunchbase. It would do your head in flying all over the country to see them all. Maybe the answer is to come to where the money is for raising and then set an office back home.
- x0x0 10y ago
  Part of what an investor provides is a network. That network tends to be where the investor is.
- BinaryIdiot 10y ago
  > Even if you do need to raise money, why is it a necessity to run your company out of the same city that your investors are in? It's almost never necessary but try telling an investor that. The amount of investors that said no to the start-up I'm currently working at, simply because it was on the East coast (that was literally the only reason given), was simply astonishing. In a world where you can be anywhere in essentially, physically, in less than a day (typically hours domestically) or instantly digitally technology investors would stick their noses up due to physical location. I love SF but it just didn't make sense at the time and it's still insanely expensive there!
  - VLM 10y ago
    > "digitally technology investors would stick their noses up due to physical location." Either they're correct, although there seems to be no logical reason why or any sane rationalization for it, or they're leaving great piles of money on the table for more open minded investors to snatch up, or they're not really in it for the money (retirement hobby, its for social signalling, etc).

eloisant 10y ago

The problem is you'll be putting out a 5 persons team, hope you don't get a Silicon Valley competitor who hires a 50 persons teams and spends ad money with their VC funding.

MicroBerto 10y ago
I guess I forgot that not everyone is doing something because they're passionate about it and are willing to stick it out in the long haul (supposedly that is "tedious" nowadays). They're in it for the fame or "billionaire status" or whatever high hopes they wish to achieve. But here's what's hilariously ironic for OP: After achieving that mystical billionaire status, what would he likely end up doing? Serious chance he buys a plot of land outside of Pittsburgh with a dog and yard for his kids and now grandkids. All things he can already afford to do right now!! Call me old fashioned, but I just don't get the point of that exercise.