Do I have to be physically present in SF to attract investors?
I have been reading articles by Paul Graham on start ups and am currently in the process of deciding where to incorporate. What baffles me is that most tech startups move to SF early on when the founders still have no real money for the move, is it advisable to be in the SF area? I live by LA and southern California is definitely filled with many creative people and competition can be fierce as well. But as one who is trying to gain funding, is it advisable to actually be up north to be noticed?
4 Answers
Most investors want to be physically near where you are.
That doesn't mean SF unless you want SF investors.
Sometimes people get funded remotely but it's the exception.
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Thats an interesting answer. I never thought about it that way. So i guess the question is, where are most investors located? – Vnchopra 14 years ago
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You don't need "most" investors, you just need one or two. So the better question is: Where do you have a better network to find those investors? Just moving to the valley doesn't make anything happen. – Jason 14 years ago
Are you open to the idea of moving to SF if you get investment from there? If yes, check out http://venturehacks.com/articles/angellist
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Thanks for the article that was really helpful! – Vnchopra 14 years ago
Things to note about the SF Bay Area culture:
- If you think competition is fierce in LA, it is doubly so out here - while there are more investors, there are A LOT MORE ventures looking to be funded
- In general, people move to the SF Bay Area because of the perceived increase in opportunities - not just for funding, but also networking and industry exposure in general. The culture is a lot more conducive to open exchange of ideas, and being able to find out early if your idea has wings
Having said that, Jason's follow-up comment is entirely correct. Just moving here isn't a guarantee - you'll still have to do the leg work (maybe much more leg work!)
Arguably, any location with a historic culture of innovation (SF, Boston, Austin for example) will be a great incubating place for your venture, but these are not the only places (Boulder, Provo and the Research Triangle come to mind).
One thing would be for you to do some research about what kind of industry/customers you are trying to reach - if it turns out LA is a good market, you are bound to find an investor who's "been there, done that" and willing to listen to your pitch.
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I agree its probably very competitive there. – Vnchopra 14 years ago
I noticed a suggestion to use AngelList if you planned to move to SF. First of all AngelList has investors from all over the world so most likely also in your neck of the woods. That said please take a quick look at another thread involving AngelList as it outlines some of the big concerns using it.
