I think this Marc Andreessen quote says it all about the importance of a startup’s location regarding fundraising:
So, yeah, location is really important, especially if you are early stage. Investors want to be close to their investments when a company is just starting out.
But, the later the stage of the investment, the more mature the company (and its management are), and the hotter the company is, the more possible it is to raise money even if you are outside the 20 minute radius of a Mercedes SLR McLaren.
Sometimes, you just don't have a choice because there are no local investors willing to invest in your company. We faced this dilemma when we were raising our Series B funding.
There were only a couple investors left in the Silicon Valley that would even look at a semiconductor investment. So, we got on our horse and found money well outside the Silicon Valley.
There was money in Florida. There was money in Boston. There was money in Philadelphia. And there was money in Austin.
But, all things being equal, I would have preferred there was money in the Silicon Valley well within the 20 minute range of a Mercedes SLR McLaren.
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