4 ms·

Hard to see them catching up since we don't see a trend over time. Very curious about why people believe the cost differential between SF and, for instance, Au

Hard to see them catching up since we don't see a trend over time. Very curious about why people believe the cost differential between SF and, for instance, Austin, hasn't driven more business to Austin to reach equilibrium, and why SF continues to be so dominant compared to the others.

findjashua 10y ago
Startups go where the money is. For Austin to attract startups, I think it needs to provide access to VCs at par with sfba.
- projectramo 10y ago
  Shouldn't the VCs move there because the startups are cheaper because everything costs less and your $ go farther?
  - findjashua 10y ago
    I'm not sure if expenditures related to location make a significant part of a startup's valuation
    - projectramo 10y ago
      That's true. I didn't mean it in that direct sense. I just thought if a VC invested the same amount of money in 10 startups in Austin, they would last longer, develop more product, explore more and therefore be, on average, more successful.
rdl 10y ago
The single biggest problem with Austin is the VC situation. AV became a "growth" fund, and nothing has really replaced it. When Seattle has a better VC community than your city does, it is a problem. Without VC, Austin remains a great place for the engineering offices of tech companies from elsewhere, but until there are more angels and VCs in Austin, probably not the best place to start a company.
- projectramo 10y ago
  You're saying they need truly early stage investors. I wonder if the SF investors are willing to be more risky because $100k feels like so much less money. In Austin, that used to be an apartment in the burbs.
  - rdl 10y ago
    Yeah, I think seed (and "pre-seed", sigh, that is now a thing too) and Series A are the most geographically specific. IPOs happen anywhere (or rather, happen nowhere). B through Pre-IPO happen basically anywhere for the strongest companies, but for a marginal company and earlier, there might be some geographic focus. OTOH, VX flies SFO-AUS nonstop.

findjashua 10y ago

Startups go where the money is. For Austin to attract startups, I think it needs to provide access to VCs at par with sfba.

projectramo 10y ago
Shouldn't the VCs move there because the startups are cheaper because everything costs less and your $ go farther?
- findjashua 10y ago
  I'm not sure if expenditures related to location make a significant part of a startup's valuation
  - projectramo 10y ago
    That's true. I didn't mean it in that direct sense. I just thought if a VC invested the same amount of money in 10 startups in Austin, they would last longer, develop more product, explore more and therefore be, on average, more successful.

rdl 10y ago

The single biggest problem with Austin is the VC situation. AV became a "growth" fund, and nothing has really replaced it. When Seattle has a better VC community than your city does, it is a problem. Without VC, Austin remains a great place for the engineering offices of tech companies from elsewhere, but until there are more angels and VCs in Austin, probably not the best place to start a company.

projectramo 10y ago
You're saying they need truly early stage investors. I wonder if the SF investors are willing to be more risky because $100k feels like so much less money. In Austin, that used to be an apartment in the burbs.
- rdl 10y ago
  Yeah, I think seed (and "pre-seed", sigh, that is now a thing too) and Series A are the most geographically specific. IPOs happen anywhere (or rather, happen nowhere). B through Pre-IPO happen basically anywhere for the strongest companies, but for a marginal company and earlier, there might be some geographic focus. OTOH, VX flies SFO-AUS nonstop.