Top 3 Reasons you Should move to California to Raise Venture Capital
Ten years ago if you were a startup company with high expectations you had to be in California. Today with online startup communities like Vator.tv, which boasts over 50,000 members in their online community, you might think there is no reason to be located out in Silicon Valley. In most cases you might actually be right, but there is still one undeniable fact about California. Over 50% of United States venture capital investments are made in California. So here are the top 3 reasons you should move to California if you are looking to raise venture capital.
Follow the Money - Duh... it does not take a Google engineer to understand that if you want to raise venture capital you should go to the venture capitalists. The fact of the matter is that despite California’s terrible State budget issues and host of other problems, California VCs invested over $3 billion in emerging companies in the second quarter of 2010 alone.
Collaborative Opportunities - Although you might be able to network with other entrepreneurs in online communities like Vator there is still value in face to face business. If you are physically located near other synergistic startups you may have the opportunity to do business with other VC funded companies. If you start to work with Twitter, the VC funded technology company, you will certainly catch the attention of other VCs when you make note of the collaboration.
Build Referral Network - It is well known in the capital raising industry that the best way to meet a VC is through a referral. I hate to break it to you, but your CPA or attorney in Alabama probably does not know many venture capitalists, but a good CPA or attorney in San Francisco probably plays golf with a host of VCs every weekend.
So before you pack up your things and move out to CA make sure that you know which venture capital firms are a good fit for your company. Check out this simple but valuable resource which details a number of VC firms, the industries they like to invest in and the typical dollar amount of an investment.
Read more from our "Lessons and advice" series
The secret to capitalizing on the $3 trillion healthcare marketRead more...
Michael Milnes of Rochester, MN: Ph.D. in Physical TherapyRead more...