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Steve Case On How To Get Funded Outside Tech Corridors (hpe.com)
Long-time reader Esther Schindler writes:
Innovation occurs outside the Bay Area, New York, Boston, and Austin. So why is it so hard for a startup to get attention and acquire venture capital? Steve Case and Kara Swisher discussed this never-ending-topic recently, such as the fact 78% of U.S. venture capital last year went to just three states: California, New York, and Massachusetts. Case sees a "third wave" of venture capital funding and through his VC firm is investing in startups based outside major tech centers.
But, points out Stealthmode's Francine Hardaway, if you're in Boise or Baltimore you don't have to wait for Case to come to town. She shares advice about what's worked in other startup communities, focusing on the #YesPhx efforts.
Conventional wisdom says you should be in a major tech center to get funding, but the article offers an encouraging counterargument. "Never rely on conventional wisdom if you're an innovator. Money follows real innovation."
But, points out Stealthmode's Francine Hardaway, if you're in Boise or Baltimore you don't have to wait for Case to come to town. She shares advice about what's worked in other startup communities, focusing on the #YesPhx efforts.
Conventional wisdom says you should be in a major tech center to get funding, but the article offers an encouraging counterargument. "Never rely on conventional wisdom if you're an innovator. Money follows real innovation."
Money follows Theranos and Juicero.
The tricky thing is that you need people with knowledge to do the R&D. If you are a startup based on academic research and located in a university area, then that is very easy. to do. The other obstacles are then affordable housing/rentals, short commutes, good schools for families as well as healthy meals for staff.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
Steve Case is high.
The article starts out claiming AOL was there at the start of the Internet, and helped pave the way -- but really, "MeTooLand" (AOL) only connected itself to the Internet through a number of large VAX machines, in a last ditch attempt at to maintain relevance, in the face of educated kids asking their parents why they are paying so much money to AOL for what amounts to Internet access. AOL was the sugary cereal "adjacent to this complete breakfast".
He states that "innovation can happen anywhere" (it can) and that "we should be funding outside traditional central areas" (debatable).
And then his three examples are Sweetgreen, Framebridge, and OrderUp, which are all within one hour driving distance of each other in the DC/Baltimore metroplex.
In other words: he's funding outside of "traditional central areas" by declaring a new central area, and then claiming it's not central.
My interpretation of this, and the specific mention of these there portfolio companies for Revolution Growth, where Steve Case works, is that the VC is starting to see that a VC needs multiple VC's when it invests in a risk company, in order to spread the risk, and that no one is coming to their party.