This week’s Ask A VC centers on an issue, many out of the Valley founders have experienced when pitching VCs in the San Francisco Bay Area. Are you a founder who has considered moving your startup to the Silicon Valley area in hope that you will receive funding? Or are you content to grow and scale your startup where you are? Read Sian’s response and sound off in the comments below.
Dear Ask A VC, I have been pitching my company a bit to VCs outside my city and recently had an investor tell me that he would not invest in my startup unless my team moved to Silicon Valley. I haven’t considered moving to California but is this something that startups should consider?
Boy, do I have an opinion on this one. I have lived in the Bay Area for some time, now. I recall back in the NewMe days when there were just a few people of color at meetups in the city. That has changed significantly in the past few years. In that time, the Bay Area has become one of the most expensive places to live in the US. There is, however, a general feeling that Silicon Valley is the epicenter of the entrepreneurial ecosystem. Sure, many of the well-known venture capitalists and startups have had their start in the Bay. But with the recent cost of living skyrocketing, the Bay does not make sense for everyone. Other cities have created their very own thriving startup ecosystems, complete with a robust investing and VC ecosystem.
Any VC that tells you that you should move to the Bay before they cut a check isn’t the right VC for you. In fact, many SV VC’s are telling their founders just the opposite.
Just recently, the spotlight has been shone on other tech ecosystems outside of SV. Denver, Atlanta, Los Angeles, Nashville, Miami, and Seattle all have thriving tech ecosystems. When I get this question from founders (and it comes up more often than you would think), I always recommend that they stay and build where they are. Create your own ecosystem there using the unique attributes of your city/state/town. We need that diversity outside of Silicon Valley.
Other cities have created their very own thriving startup ecosystems, complete with a robust investing and VC ecosystem.
If you do decide to move to SV, consider all of the associated costs. Housing and talent will cost you more and ancillary expenses could also pile up. Sure there are many positives about the Bay Area so do your research before relocating and try to find a situation that works for you. If your runway is limited, consider how moving will affect that. More importantly, align yourself with a VC who wants to invest in your company for the right reasons.
Do you have any questions you’d like to ask Sian? Drop us a line at this email: firstname.lastname@example.org. We’ll publish the most pertinent questions with Sian’s savvy response.
Sian Morson is an investor, startup advisor and entrepreneur. Follow Sian on Twitter @sianmorson