but on balance, Bay Area investors just moved faster. When we got our first term sheet, and I got back in touch to gauge interest in joining the round from other tier-1 VCs and angels we had been speaking with, I would have a meeting set up in 2 or 3 days from Bay Area folks. Seattle—the fact that we received a term sheet got little notice in the Seattle community. Meetings were still taking 2, 3 and sometimes even 4 weeks to get together. By that time, we’d moved on and were discussing other opportunities.”
— “Logistics are difficult. Regardless of what the media makes it sound like…fundraising does not happen in a scripted way where the entrepreneur comes in and pitches, and the investor decides yes or no. Reality is that it is a fluid process. You meet one investor…if they like you, they seek social proof. So they introduce you to some of their friends. You meet with them…you meet with someone else that knows them, so they can whisper good things to the primary investor. You spend time keeping them in the loop about what’s going on…and one day something emerges. This process requires scheduling and rescheduling. You don’t want to make a flight from Seattle to San Francisco just for 1 meeting (though we did that a couple of times). You want to pack as many meetings into 1 or 2 days as possible. But each meeting is rescheduling…they may not be available that day or they have a partner meeting. Flying back and forth to handle all of that is not trivial and can add up quickly, not to mention the wasted time when 4 meetings in one day become 1 or 2. Being a 30 minute drive away gives you the flexibility to move more reasonably. You don’t have to wait to come down to the Bay Area only when you have 5 or 6 meetings scheduled together.”
— “The amount of capital running around is unparalleled and comes with a certain risk tolerance. The Bay Area had about $10 billion of invested venture capital in 2007. Seattle had approximately $1.25 billion invested last year. That’s an order-of-magnitude difference. That’s the difference in populations between New York City and San Antonio, TX. Probably because of the availability of this capital, the people you meet with are eager to find other investors to go along. At some level, investing in startups felt more like a ‘pastime’ in the Bay Area for the folks that we met, if that makes any sense.”
— “The startup ecosystem is much more vibrant. Companies in the Bay Area are getting funded more frequently. I like to talk about the ‘party experience.’ Going to a party in the Bay Area, you will literally meet founders of 10 to 20+ startup companies. That’s 10 to 20+ groups of investors or relationships. And if you make friends with some of them, they’re more than happy to introduce you to their investors as a potential lead for your own company. Startups love to support each other. A party in Seattle? If you are lucky you will meet 1 or 2 startup people. But more frequently than not, you will end up running into Microsofties or the occasional Amazonian. And for better or for worse, the conversation will revolve around ‘reorganizations’ and ‘moving between divisions inside the company.’ It’s a much different kind of serendipity that you can experience down here…and God knows, we’ll take all the serendipity that we can get.”
