Building a Tech Firm outside the US

Mark Suster wrote an interesting article recently about building tech. companies outside Silicon Valley. One of the themes that came out of this is that the risk appetite of the capital is different outside Silicon Valley than in it – ie. more focussed on established business plans/ monetisation etc. Clearly this applies to an even greater degree in Europe but it is interesting that a noted shortfall of European venture money is not solely a European issue. However the other point of his which I thought leads me down an interesting path is the regional breakdown of invested capital. If you exclude Silicon Valley & LA there are surprisingly few regions that represent more than 5% of the invested VC in the US. One of our core competencies is in helping companies expand into the US, initially as a sales operation but if the business progresses it may be appropriate to relocate HQ to focus on what we view as the best market for selling tech. into, raising capital and exiting. This, however, is best done when assisted with some locally based capital investment which comes with experience of backing big exits. While it has always been logical that East Coast relocation is the most practical – this certainly focuses the mind on where to move to if you want to maximise your chances of attracting the type of capital you’d want which is an essential bridge that you need to cross on the way to success.

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