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My question from this was, if you shouldn't be in Silicon Valley or NYC and choose a different city, how does that affect your ability to raise money? And what

by athst 16y ago

My question from this was, if you shouldn't be in Silicon Valley or NYC and choose a different city, how does that affect your ability to raise money? And what does it cost to give up some of the community/cross-pollination effect that goes on in those major areas?

qthrul 16y ago
To fully address that question you'd probably want to review the meta coverage of the topic. I'm not offering a comprehensive listing but these are two links you might consider: http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.fastcompany.com/1699323/why-you-should-start-a-company-in-raleigh-durham http://www.fastcompany.com/1699323/why-you-should-start-a-co... The key take away (for me) isn't that one city can make or break a company but there are certain considerations to make. Caveat A: if your company success is predicated on being inside of a known echo chamber or circulatory system of talent -- by all means consider SF/NY/etc... Caveat B: if you need to be aligned a specific niche that has no ties to an "NFL city" -- get away as fast as you can to where that niche can best be served with the basics quality of life that will draw the talent and team you desire. SAS software is the largest privately held software company on the planet. Yet... they started not in SF/NY... but... North Carolina? rip needle across the record http://sas.com http://sas.com RightNow is a public software company that was not started in SF/NY... but... Montana? rip needle across the record http://rightnow.com http://rightnow.com There are more. Seriously. Think about it and do the searches. Download Crunchbase and plot it... http://trends.techcrunch.com/ http://trends.techcrunch.com/ Don't take my text for it... Just pick up your head and look around to see a world that doesn't -exclusively- fit in zip codes starting with 941xxx and 112xxx.
jasonmcalacanis 16y ago
1. It is much easier to raise money in the Valley than any where else--certainly. However, based on what I've seen from Open Angel Forum, you can raise money in Seattle, Boston, Los Angeles and Boulder almost as easily, and at a similar (maybe -10-25%) valuation. 2. Los Angeles, Seattle, Austin and Boston specifically have a lot of angels and not a lot of great companies in my experience. 3. You will give up some cross-pollination, yes. However, you will experience less turnover and competition for talent. The best thing an up and coming startup could do in my mind right now is move to Seattle, DC or Boston.... there are so many amazing developers there who want to work at a kick-ass startup. If Twitter moved their HQ to Seattle right now they would get a flood of folks from Amazon, Microsoft, etc. to join them.
- athst 16y ago
  Thanks. DC is an interesting one, you don't hear it mentioned very often.
- neworbit 16y ago
  I don't see those valuations nor investor traction in Seattle, Boston, or LA. Not sure I ever have for Seattle and LA. Part of the reason there is that they aren't in the Valley echo chamber. Farther you get from home, the less press you get, therefore the fewer people thinking "what a great company".
  - jasonmcalacanis 16y ago
    at the Boston, Seattle and Los Angeles Open Angel Forums we have seen companies that are slightly less (10-35%) further along than the Valley and New York City, but that have valuations that are much less (50%). Folks in those cities are raising $250-500k at $1.5-2m valuations, where in NYC and the Bay Area/Valley we see $4-6M valuations. You are correct that those companies get less press.... however, they just have to be creative and successful and they will get it (RedFin and Groupon and Gowalla come to mind).
    - neworbit 16y ago
      So... if valuation is a big driver/deterrent of angel deals, why don't you spend the majority of your time chasing deals in those cities or other similar areas with entrepreneur/tech talent but less angel competition? Maybe you are - it doesn't come across that way.

by athst 16y ago

qthrul 16y ago

To fully address that question you'd probably want to review the meta coverage of the topic. I'm not offering a comprehensive listing but these are two links you might consider: http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.fastcompany.com/1699323/why-you-should-start-a-company-in-raleigh-durham http://www.fastcompany.com/1699323/why-you-should-start-a-co... The key take away (for me) isn't that one city can make or break a company but there are certain considerations to make. Caveat A: if your company success is predicated on being inside of a known echo chamber or circulatory system of talent -- by all means consider SF/NY/etc... Caveat B: if you need to be aligned a specific niche that has no ties to an "NFL city" -- get away as fast as you can to where that niche can best be served with the basics quality of life that will draw the talent and team you desire. SAS software is the largest privately held software company on the planet. Yet... they started not in SF/NY... but... North Carolina? rip needle across the record http://sas.com http://sas.com RightNow is a public software company that was not started in SF/NY... but... Montana? rip needle across the record http://rightnow.com http://rightnow.com There are more. Seriously. Think about it and do the searches. Download Crunchbase and plot it... http://trends.techcrunch.com/ http://trends.techcrunch.com/ Don't take my text for it... Just pick up your head and look around to see a world that doesn't -exclusively- fit in zip codes starting with 941xxx and 112xxx.

jasonmcalacanis 16y ago

1. It is much easier to raise money in the Valley than any where else--certainly. However, based on what I've seen from Open Angel Forum, you can raise money in Seattle, Boston, Los Angeles and Boulder almost as easily, and at a similar (maybe -10-25%) valuation. 2. Los Angeles, Seattle, Austin and Boston specifically have a lot of angels and not a lot of great companies in my experience. 3. You will give up some cross-pollination, yes. However, you will experience less turnover and competition for talent. The best thing an up and coming startup could do in my mind right now is move to Seattle, DC or Boston.... there are so many amazing developers there who want to work at a kick-ass startup. If Twitter moved their HQ to Seattle right now they would get a flood of folks from Amazon, Microsoft, etc. to join them.

athst 16y ago
Thanks. DC is an interesting one, you don't hear it mentioned very often.
neworbit 16y ago
I don't see those valuations nor investor traction in Seattle, Boston, or LA. Not sure I ever have for Seattle and LA. Part of the reason there is that they aren't in the Valley echo chamber. Farther you get from home, the less press you get, therefore the fewer people thinking "what a great company".
- jasonmcalacanis 16y ago
  at the Boston, Seattle and Los Angeles Open Angel Forums we have seen companies that are slightly less (10-35%) further along than the Valley and New York City, but that have valuations that are much less (50%). Folks in those cities are raising $250-500k at $1.5-2m valuations, where in NYC and the Bay Area/Valley we see $4-6M valuations. You are correct that those companies get less press.... however, they just have to be creative and successful and they will get it (RedFin and Groupon and Gowalla come to mind).
  - neworbit 16y ago
    So... if valuation is a big driver/deterrent of angel deals, why don't you spend the majority of your time chasing deals in those cities or other similar areas with entrepreneur/tech talent but less angel competition? Maybe you are - it doesn't come across that way.