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At the end of the day, it's about access to capital. My wild hypothesis is if some angel investor said, "I'm going to invest 10 billion dollars in funding star
by dalfonso 9y ago
At the end of the day, it's about access to capital. My wild hypothesis is if some angel investor said, "I'm going to invest 10 billion dollars in funding startups but you have to relocate to Colorado/midwest/anywhere for the first 5 years", then in the next 5 years that city will definitely "have a prosperous startup industry". Yes, you can be successful bootstrapping but it seems so much easier once you have funds to use for hiring/marketing/scaling/etc. (Note: I've never raised any amount of capital before.) In addition the "we've raised money" badge also signals legitimacy to potential employees, customers, partners.
- bluGill 9y agoIn any good sized city there are venture capitalists and angles willing to fund SOMETHING. A number of them do not care where you are physically located (unless physical location is important) and will fund you wherever you are. There is a lot more money in the valley for some reason, but there is still plenty in any great large city if you have a great idea. It is the okay ideas that they cannot fund in other places (note some seemingly bad ideas take off you will see more of that in the valley if this is worth it or not is an open question)
- kevinr 9y agoFriendly amendment: it's about access to capital relative to local costs. Arguably OP's point is that he had access to enough capital relative to his local costs in Colorado to afford to bootstrap, whereas he'd have needed VC to hit the same ratio in the Valley. Turned out well for him, and has worked for others like him. "I'm going to invest 10 billion in startups but you have to relocate" is basically what Tony Hsieh did in Las Vegas, and it... based on how rocky that got, I think it's about more than just access to capital.