31 May Silicon Valley, NYC, Boston or Fund Bust
Synchronicity seems to happen in 3s. You hear something once, then you hear it again. When you hear it a third time, you may want to listen up. Maybe the world is trying to tell you something. Three times in the past 2 weeks either a person or a short video stated bluntly that you might as well hang it up as an internet start-up if you are not in Silicon Valley, NYC or near Boston. That sounds kind of ominous if you are not in those three cities. What are we to do? Are the other 95% of Americans in a technology business, trying to make an Internet start-up a reality, supposed to just stop right now.
The answer is no. This “you have to be in these three cities” is not a prognosticator of success, but rather the possibility of receiving venture capital for an Internet start-up. And venture capital is the fuel that makes big or decent size Internet software ventures run. But from listening to videos of successful start-ups out of the San Francisco area, it would seem that it goes way beyond just venture cap. It is finding the management, getting the right employees, having the right legal work done. And it seems this is just the way it is. I think if you are wanting to be a start-up and you are in Kansas, South Florida, New Mexico, or Maine, it just means you have to focus back on either boot-strapping, self-funding, using Angels, or try the long shot of getting backed from another interested firm, like Google Ventures.
In South Florida recently, we’ve heard that Cross-Bow Ventures is no longer in business in Palm Beach County and that there really is not a lot of VC dollars to go around in the south east at this point in time. This means that trying to raise certain amounts of capital will be nearly impossible unless some new funds start to take up the slack. It could, however, point to a major problem in South Florida trying to raise capital.