Comments on: Successful Startups Put Some Distance Between Their HQ and Their VCs http://www.xconomy.com/national/2009/06/22/successful-startups-put-some-distance-between-their-hq-and-their-vcs/ Business + Technology in the Exponential Economy Sat, 11 Feb 2012 03:54:18 +0000 hourly 1 http://wordpress.org/?v=3.0.4 By: Kevin Ober http://www.xconomy.com/national/2009/06/22/successful-startups-put-some-distance-between-their-hq-and-their-vcs/comment-page-1/#comment-69470 Kevin Ober Tue, 07 Jul 2009 22:27:07 +0000 http://www.xconomy.com/?p=30582#comment-69470 Might the real answer be that investments made outside of over financed markets like the Bay Area are priced more attractively? Might the real answer be that investments made outside of over financed markets like the Bay Area are priced more attractively?

]]> By: Brent Frei http://www.xconomy.com/national/2009/06/22/successful-startups-put-some-distance-between-their-hq-and-their-vcs/comment-page-1/#comment-67499 Brent Frei Fri, 26 Jun 2009 21:41:52 +0000 http://www.xconomy.com/?p=30582#comment-67499 I believe the primary reason for the study's results are that venture firms invest outside their geographic focus area only for the very best opportunities. The special attractions that drew them to those investments are the foundational components of the company that make them the winners down the road (great team, great idea, cash flow positive today,...). As evidence, look at Seattle's Madrona Ventures reaching to New York City for a stake in Animoto. Great company with sound fundamentals including positive cash flow. Less risk + higher likely reward = reach beyond our geographical boundaries. There may be some truth in the drag caused by "monitoring costs" but mostly because Venture firms' value add to their investments follow the same Pareto curve as everything else. Only 20% of them are great at what they do, the other 80% will produce varied value with their interactions. I believe the primary reason for the study’s results are that venture firms invest outside their geographic focus area only for the very best opportunities. The special attractions that drew them to those investments are the foundational components of the company that make them the winners down the road (great team, great idea, cash flow positive today,…).

As evidence, look at Seattle’s Madrona Ventures reaching to New York City for a stake in Animoto. Great company with sound fundamentals including positive cash flow. Less risk + higher likely reward = reach beyond our geographical boundaries.

There may be some truth in the drag caused by “monitoring costs” but mostly because Venture firms’ value add to their investments follow the same Pareto curve as everything else. Only 20% of them are great at what they do, the other 80% will produce varied value with their interactions.

]]> By: Konamoxt, Inc. » Is “Out of Sight, Out of Mind” a Good Strategy for VC Backed Companies? » Sweat365 » Fitness Community http://www.xconomy.com/national/2009/06/22/successful-startups-put-some-distance-between-their-hq-and-their-vcs/comment-page-1/#comment-67470 Konamoxt, Inc. » Is “Out of Sight, Out of Mind” a Good Strategy for VC Backed Companies? » Sweat365 » Fitness Community Fri, 26 Jun 2009 17:24:42 +0000 http://www.xconomy.com/?p=30582#comment-67470 [...] from their VCs are more likely to be successdful than companies that are closer to their investors. Xconomy and PEHub both ran articles about the study and reach similar interesting conclusions about why [...] [...] from their VCs are more likely to be successdful than companies that are closer to their investors. Xconomy and PEHub both ran articles about the study and reach similar interesting conclusions about why [...]

]]> By: After this goldrush in a society with no real innovations and booming productivity for innovators « Fredzimny’s CCCCC Blog http://www.xconomy.com/national/2009/06/22/successful-startups-put-some-distance-between-their-hq-and-their-vcs/comment-page-1/#comment-67274 After this goldrush in a society with no real innovations and booming productivity for innovators « Fredzimny’s CCCCC Blog Wed, 24 Jun 2009 14:43:43 +0000 http://www.xconomy.com/?p=30582#comment-67274 [...] Successful Startups Put Some Distance Between Their HQ and Their VCs (xconomy.com) [...] [...] Successful Startups Put Some Distance Between Their HQ and Their VCs (xconomy.com) [...]

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