A startup not in the valley isn't going to work, right?
Yep this is a rant and an attempt to think through some things.
Today for the second time we got told in a pitch meeting that building a company in Vancouver (Canada!) means you're going to get a lower valuation. And that if we were doing the company down in San Francisco we'd be worth more and have a better chance of success.
So we ask what makes it so good? We get a number of things but generally they amount to these:
- More capital
- You will have more senior talent to bring in. The best in the world.
- You will have access to senior advisors guiding you all the way, great mentorship.
- Accessing key partners will be simple, you simply drive over and see them.
Come on, seriously.
More capital #
I kind of get this one but I'm still going to argue it's BS.
Yeah sure you can get more money, it'll mean you have a larger runway or can increase your burn. I'd argue that a Canadian company could get the same runway.
- There are less benefits to pay out for employees, health plan, etc, etc
- Amazing tax initiatives provided by the government for innovation, you heard of SR&ED?
- More bang for your buck, we have great talent around that don't demand massive salaries to sway them from other companies.
- Having less money around means we have to triple think our budget, there is no safety net to go knock on the investors doors again, we have fear on every $ spent because we have less.
Boris Wertz (a very active investor) said in response to an entrepreneur asking "where is Vancouver going to get more money from?", which was "Just get on building the business, get traction & product market fit, the money will come" (Sorry Boris if it's not word for word exact). But the point was essentially build the business get the paying clients, just put your heads down and get on, the money will come.
Senior Talent #
Um I wonder how I'm going to attract these best developers from all of the other startups and companies like the Google, Apple & Facebook? Nuff said.
Vancouver has some great business minds, engineers, designers, creatives, etc. Why do you facebook is opening up a office here?
We have two major universities in Vancouver pumping out graduates every year. Our first hire came from one, coming from London, UK where I've had the pleasure working with some great people, he is just as good if not better.
I'm going to bet on building the right team here in Vancouver, Canada. Not in the bay area, sorry.
Senior Mentors #
Do we need to be living in the Bay Area to get time from mentors and advisors? Do we need to be living to have conversations with individuals that are in the bay area? Nope I don't think so.
Sorry but right now we are having conversations with people around the globe that will contribute in the right way to our business. If they are the right people and understand our business goals then they will want to jump on board.
We are already engaging with mentors from the bay area, but also Toronto, London and even Berlin.
Partners and early clients #
I don't believe that having a partner physically closer makes it easier to sell to them. It will be just the same as anywhere else. We'll have the same problems, how do we get an intro, is it warm, cold, is it the right individual.
Once a connection is made with one of those partners will they want to work with you more because you are in the Bay Area? I'm thinking yeah maybe but at the end of the day won't they just care about what you're building.
If the business is the right fit then they will want to make it work.
Sure I might be wrong with all of this, but I'm not packing my bags anytime soon.
Have thoughts on what I've shared? Please tweet me @kalv publicly or privately, would love to chat.