Fundraising

Living outside tech corridors - pro or con?

Chicke Fitzgerald

May 10th, 2016

I live in Tampa, Florida, which quite frankly is one of the best kept secrets in the nation.  But it is not exactly the hotbed of tech investment activity.  I am not currently actively raising capital as I am close to breakeven and want to build out our revenues a bit first, but I want to keep my options open.    I do not want to have to relocate as we love Florida.  

Do you see this as a barrier to success for a tech company?
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Chris Kitze CEO at Safe Cash Payment Technologies, Inc.

May 10th, 2016

It depends on how you define success.  If you want to get tier 1 venture backing and eventually IPO your company, you'll have to move.  If you want to have a very successful and profitable business that you continue to own and control, you should stay put.  You've got a support system where you are.  As long as your business is sustainable and won't get run over by the big boys with big pocketbooks, you can do just fine.  Good luck, there are a lot of very good people in Tampa!

Richard Harris Top 25 Inside Sales Leader, Public Speaker, 40 Most Inspiring Leader, Sales Trainer, Start-Up Advisor, SalesHacker

May 10th, 2016

Hi Chicke,

If you can build it where you are then do it. I've worked with other startups in STL, Detroit, ATL, SF, and Portland. Yes there is something to be said for being in the "hot area" but honestly if you can build the org, find the talent, and grow your business from FL then do it. 

Should the time for VC funding become required, most VC's will invest in a company that has a strong product/market fit, business plan, and revenue stream (which it sounds like you do)

Sometimes its better to be a big fish in a small pond than a minnow in the ocean. 

Should the need for moving become a real necessity, you will be able to figure it out at that time.

Good luck!

Robert Stoeber Co-founder at Workglue

May 16th, 2016

One thing founders don't hear much about are the disadvantages of nurturing a startup in one of the tech hubs like the Bay Area. The most obvious problem is that the expenses for everything are really high. The founder's personal living expenses, rent, salaries, professional fees and everything else require far more money before even finishing a pitch deck.

The second problem, specific to software startups, is that every great developer (coders, designers, UI/UX people, etc) and most barely-adequate developers are already working for high salaries and can't afford to work for your underfunded startup. Every Bay Area startup is competing with the big, established players for talent. And those prospective employees can't take a risk on a startup because they also need to cover the same sky-high living expenses.

Third, the Bay Area investors are overwhelmed with potential deals. The competition to get an appointment is fierce so unless you already know someone, and have your MVP complete, and have traction, you probably won't make an impression. There are simply too many ideas chasing money in a very concentrated area so most entrepreneurs don't stand a chance.

My own experience is based on several software-type startups. After 10 years in the Salt Lake City market we moved to the Bay Area for 5 years. My partners and I are now launching our newest business in Chandler Arizona. The resources we need are readily available in Chandler and the same amount of investment money will stretch a great deal further.

Every business is unique, and our need for programmers is very different from a company that needs manufacturing facilities. But most entrepreneurs that need 6 or 7-digit initial funding rounds have a lot of flexibility in where to locate their business. I would advise ranking lifestyle and people/staffing above that techie-sounding address. Don't forget that this new startup is going to consume your life for a while, so you want to be in an environment you genuinely enjoy.

Steve Weiss Co-Founder and Advisor at LaunchCommand

May 10th, 2016

Several Florida based start-ups were VC funded and have been quite successful (primarily medical s/w products). It's not as easy as being located in a tech. area due to travel requirements by both company management as well as the investing Members of the Board.

Michael Gitter President of DoYouRemember.com

May 11th, 2016

I moved to Miami from NY when the city was trying to become a tech center. They gave me a lot of incentives, and since there were many other cities with a hotbed of tech activity, and I love Miami, it made sense. But nobody takes Miami seriously as a tech hub and I've had to re-focus my attention back to NY. I agree with Chris above. If you want to be in tech, and raise money, MOVE OUT OF TAMPA. Period.

Chicke Fitzgerald

May 11th, 2016

Thanks Rob.  I believe that there is tech talent here, just not a hotbed of investment (yet).  It is such an investment of time to hangout at all the accelerator get togethers.  I am not great at mingling and small talk so while I've gone to Million Cups and presented our product/opportunity, I avoid most of those get togethers and am mining my own network.

Rob Mitchell Senior Java Software Engineer at Direct Commerce

May 11th, 2016

While it would be easier to fish where the fish are to build your team, the chemistry is much more important and just as hard to create and build. Take care of your partners and employees and they'll create great products for you regardless of geography. My current employer is in San Francisco while I'm here in the Boston area. Its been working out great. You can make it happen. 

Joanan Hernandez CEO & Founder at Mollejuo

May 11th, 2016

Hello,

One of the hottest tech startup today is Magic Leap. They've raised 1.42$ B in three rounds, and they still don't have a product yet! At least not commercially available. Magic Leap is located in ... Dania Beach, FL.

So, Magic Leap proves that as long as you have an interesting product, it doesn't matter where you are. Of course there are nuances, like the founder of the company had a previous successful exit, or so I read. Still!

Cheers!

Trisha JD Business and Health Care Practice Legal Services, Start-ups, Transitions, Purchases and Sales

May 13th, 2016

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A. Andrew Chyne

May 15th, 2016

As long you have a go-getter attitude, you don't need to be in a tech hub, like San Francisco or Boston. You just need to spend time meeting and interacting with the right people. Moving to a tech-hub is expensive and business is not guaranteed. Nampa is a right place where by you don't need to spend much money on rent and it's good to be away from such places because you can concentrate more on your business and product development. Sometimes startups that are located in tech-hubs tends to confuse with their product because they are easily distracted by other innovators or product developers.

The cons would be the time and money required to travel and meet the right people and the pros have more added value as mentioned above. 

Good Luck.