9 ms·

Hard not to LOL at SF and Silicon Valley being treated as separate markets for funding. For extremely local services, sure (like dry cleaning or a coffeeshop),

by rdl 9y ago

Hard not to LOL at SF and Silicon Valley being treated as separate markets for funding. For extremely local services, sure (like dry cleaning or a coffeeshop), they're different markets. Maybe even for a daily-commute job (although that's debatable). For fund raising, I don't think there's anyone unwilling to Uber/drive/BART/caltrain an extra 20 miles for $1mm to $1b in funding. You meet investors monthly at most, and more likely quarterly or annually.

JumpCrisscross 9y ago
They work like separate markets. I'm in the Bay Area (from New York) with 5 to 6x the frequency with which I'm in San Francisco. I believe this boundary also applies to fund flows--Pitchbook had a study (having trouble finding it right now) tracking correlations between California VC firm HQs and companies invested within the HQ zip code or a tangential zip code. San Francisco seems to have found its niche with B2C while the South Bay focussed on heavier stuff, e.g. satellites, ML, et cetera. Highly-correlated markets, but similarly distinct as New York and Long Island.
- rdl 9y ago
  I'm just going based on seed/demo days and a smaller number of A/B rounds I've observed -- location of the investor leads between SF/SV never came up, and meetings with SV investors in SF, SF investors in SV both happened quite frequently. That's a subset (YC and other companies I know), and probably weighted on number-of-investments vs. total fund flows. This is for first/second meetings; perhaps they're more likely to actually close if local, but given that most financings happen in a small number of meetings now, that also seems unlikely. (Seed = 2-5; A = something like 5-10 total?) Maybe outside of demo days ("organic" vc or whatever you'd call it), it becomes a factor due to people walking into offices or other lead generation efforts. It's also hard to believe that late stage financings (which are larger but less frequent) care at all about location, given that so many of them are from outside the geography entirely, including international. If you have stats from something more quantified that would be interesting.
  - deleted 9y ago
    [deleted]
- otterley 9y ago
  There are plenty of B2B companies to be found in San Francisco: Salesforce (whose new HQ will be the tallest building in the city), Zendesk, Twilio, CloudFlare, Fastly, Segment, ...
- deleted 9y ago
  [deleted]
austenallred 9y ago
And Oakland is nonexistent entirely!
- santaclaus 9y ago
  I have friends who have lived in a San Francisco (and Berkeley!) for years who are too sketched out to visit Oakland, weirdly.
  - JumpCrisscross 9y ago
    Same thing happens in New York with the Bronx and New Jersey. I think there's a psychological stopping power to water that makes Palo Alto and San Francisco seem closer than Oakland (or the Upper West Side feel closer to Flatiron than New Jersey).
    - scythe 9y ago
      Bridge traffic + BART congestion means that it's easier for me as a resident of San Francisco to visit Palo Alto than Oakland. Maybe not how it should be, but certainly how it is; with a new Bay crossing slated for 2040 at the earliest it'll be like that for a while.
      - russell_h 9y ago
        At what time of day? Currently Google maps shows a 20 minute drive from SOMA to downtown Oakland vs 40 minutes to PA. If you're trying to use public transit obviously the difference will be even greater.
        scythe 9y ago
        Commute time, because that's what (work!) we're discussing. I don't know what BART train you guys ride, but my coworkers in the East Bay would often try to leave the office before 4:30 or after 6, or ride the train the wrong way for a few stops, because the tunnel is so crowded at rush hour. The bridge is awful for commutes, of course. And some people apparently think "second Bay crossing" refers exclusively to a road, which is not what I meant
anigbrowl 9y ago
Culturally and politically they're completely different. Don't be fooled by the short geographic distance, that's like saying Canada must be just like the USA because they're right next to each other and English is the primary language in both countries.
- rdl 9y ago
  While the companies in SF and SV might be distinct, investors (or founders) are willing to conduct 20mi arbitrage for funding. SV investors (including YC) opened some offices up in SF, but well before that they were driving up and having meetings in other offices.
  - deleted 9y ago
    [deleted]
- justonepost 9y ago
  Actually, at the US/CAD borders culture and politics is generally pretty much the same.
  - rdl 9y ago
    Culture, yes, but there are legal differences which limit cross-border investment flows more than cross-border cultural or more-transactional-commerce flows.
  - robotresearcher 9y ago
    Sure. The Prime Minister and the President are almost indistinguishable right now.
    - uiri 9y ago
      At the federal level, Canada generally flip flops between Tories and Liberals every so often and the US generally flip flops between Republicans and Democrats every so often. After 8 years of Obama, the US was due for a flip. After 10 years of Harper, Canada was due for a flip. Not to mention that most of Canada's population - Greater Vancouver and the Windsor-Quèbec corridor - border the most left leaning regions of the US excluding California; the Pacific Northwest and the Northeastern US respectively. Alberta politics are roughly similar to those of Montana or the Dakotas.
nullnilvoid 9y ago
Are these numbers about the source (where VCs are located) of capital or destination (where the funding goes)? Many SF startups get funding from Menlo Park but they are still used in SF. Is this counted as SF or Silicon Valley funding?
fanzhang 9y ago
Agreed. Especially when you consider the article considers the following areas as a unit: "New York Metro Area" "LA/Orange County" and of course the whole of "New England" -- yup an area that takes almost 10 hours to drive tip to tip: https://goo.gl/abZHs7 https://goo.gl/abZHs7 It's clearly an intellectually dishonest maneuver to split SF from Silicon Valley. Done probably just so they can generate the headline "San Francisco's VC boom is over".

by rdl 9y ago

JumpCrisscross 9y ago

They work like separate markets. I'm in the Bay Area (from New York) with 5 to 6x the frequency with which I'm in San Francisco. I believe this boundary also applies to fund flows--Pitchbook had a study (having trouble finding it right now) tracking correlations between California VC firm HQs and companies invested within the HQ zip code or a tangential zip code. San Francisco seems to have found its niche with B2C while the South Bay focussed on heavier stuff, e.g. satellites, ML, et cetera. Highly-correlated markets, but similarly distinct as New York and Long Island.

rdl 9y ago
I'm just going based on seed/demo days and a smaller number of A/B rounds I've observed -- location of the investor leads between SF/SV never came up, and meetings with SV investors in SF, SF investors in SV both happened quite frequently. That's a subset (YC and other companies I know), and probably weighted on number-of-investments vs. total fund flows. This is for first/second meetings; perhaps they're more likely to actually close if local, but given that most financings happen in a small number of meetings now, that also seems unlikely. (Seed = 2-5; A = something like 5-10 total?) Maybe outside of demo days ("organic" vc or whatever you'd call it), it becomes a factor due to people walking into offices or other lead generation efforts. It's also hard to believe that late stage financings (which are larger but less frequent) care at all about location, given that so many of them are from outside the geography entirely, including international. If you have stats from something more quantified that would be interesting.
- deleted 9y ago
  [deleted]
otterley 9y ago
There are plenty of B2B companies to be found in San Francisco: Salesforce (whose new HQ will be the tallest building in the city), Zendesk, Twilio, CloudFlare, Fastly, Segment, ...
deleted 9y ago
[deleted]

austenallred 9y ago

And Oakland is nonexistent entirely!

santaclaus 9y ago
I have friends who have lived in a San Francisco (and Berkeley!) for years who are too sketched out to visit Oakland, weirdly.
- JumpCrisscross 9y ago
  Same thing happens in New York with the Bronx and New Jersey. I think there's a psychological stopping power to water that makes Palo Alto and San Francisco seem closer than Oakland (or the Upper West Side feel closer to Flatiron than New Jersey).
  - scythe 9y ago
    Bridge traffic + BART congestion means that it's easier for me as a resident of San Francisco to visit Palo Alto than Oakland. Maybe not how it should be, but certainly how it is; with a new Bay crossing slated for 2040 at the earliest it'll be like that for a while.
    - russell_h 9y ago
      At what time of day? Currently Google maps shows a 20 minute drive from SOMA to downtown Oakland vs 40 minutes to PA. If you're trying to use public transit obviously the difference will be even greater.
      - scythe 9y ago
        Commute time, because that's what (work!) we're discussing. I don't know what BART train you guys ride, but my coworkers in the East Bay would often try to leave the office before 4:30 or after 6, or ride the train the wrong way for a few stops, because the tunnel is so crowded at rush hour. The bridge is awful for commutes, of course. And some people apparently think "second Bay crossing" refers exclusively to a road, which is not what I meant

anigbrowl 9y ago

Culturally and politically they're completely different. Don't be fooled by the short geographic distance, that's like saying Canada must be just like the USA because they're right next to each other and English is the primary language in both countries.

rdl 9y ago
While the companies in SF and SV might be distinct, investors (or founders) are willing to conduct 20mi arbitrage for funding. SV investors (including YC) opened some offices up in SF, but well before that they were driving up and having meetings in other offices.
- deleted 9y ago
  [deleted]
justonepost 9y ago
Actually, at the US/CAD borders culture and politics is generally pretty much the same.
- rdl 9y ago
  Culture, yes, but there are legal differences which limit cross-border investment flows more than cross-border cultural or more-transactional-commerce flows.
- robotresearcher 9y ago
  Sure. The Prime Minister and the President are almost indistinguishable right now.
  - uiri 9y ago
    At the federal level, Canada generally flip flops between Tories and Liberals every so often and the US generally flip flops between Republicans and Democrats every so often. After 8 years of Obama, the US was due for a flip. After 10 years of Harper, Canada was due for a flip. Not to mention that most of Canada's population - Greater Vancouver and the Windsor-Quèbec corridor - border the most left leaning regions of the US excluding California; the Pacific Northwest and the Northeastern US respectively. Alberta politics are roughly similar to those of Montana or the Dakotas.

nullnilvoid 9y ago

Are these numbers about the source (where VCs are located) of capital or destination (where the funding goes)? Many SF startups get funding from Menlo Park but they are still used in SF. Is this counted as SF or Silicon Valley funding?

fanzhang 9y ago

Agreed. Especially when you consider the article considers the following areas as a unit: "New York Metro Area" "LA/Orange County" and of course the whole of "New England" -- yup an area that takes almost 10 hours to drive tip to tip: https://goo.gl/abZHs7 https://goo.gl/abZHs7 It's clearly an intellectually dishonest maneuver to split SF from Silicon Valley. Done probably just so they can generate the headline "San Francisco's VC boom is over".