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The primary bottleneck among most top-tier VCs is partner time and travelling is a huge time-sink. Hence why most VCs tend to focus over a relatively small area
by ig1 12y ago
The primary bottleneck among most top-tier VCs is partner time and travelling is a huge time-sink. Hence why most VCs tend to focus over a relatively small areas.
If a VC is looking at investing in a startup in a location where they have no activity then they're going to have to do trips out just for that specific startup (for due diligence, board meetings, etc.) and they're also going to have a harder time providing value-add (lack of local contacts, etc.)
Hence for a startup outside of a cluster to be worthwhile it has to be significantly better than the local dealflow and the deal has to be of a significant size. So such deals are always likely to be a rarity.
(Having a founder who's already built and sold a billion dollar company also helps immensely; if you're in that small category of people you can probably raise money regardless of where you're based)
- LogicX 12y agoI look forward to either disproving this, or being defeated by it. My stance is that great connectivity and communication (think google hangout) combined with cheap flights between Myrtle Beach and Boston can make it happen. Investors may be enticed by additional reasons to head to Myrtle Beach: golf, vacation, warmth.
- jianshen 12y agoStrangely enough, the kind of immersive experience technology that Magic Leap is developing might just help with that problem.
- ig1 12y agoI think you're focusing on the wrong things. VCs (largely) want solid personal relationships with their companies and that's something that's not happening over skype/hangout anytime soon. A few thousand dollars on flights also isn't a big deal when you're investing millions; time is much more important than money. Your best bet would probably be to: (1) Get solid local VCs who other (non-local) VCs are happy to co-invest with. (2) Build thematic clusters, because a partner at a VC who's interested in multiple companies in an area is much more likely to fly out then for an individual company.