VENTURE CAPITALIST – TAMPA BAY AREA WANTS YOU
VENTURE CAPITALIST – TAMPA BAY AREA WANTS YOU
❏ Today I’m speaking on Venture Capitalist – Tampa Bay Area Wants You.
I am a coach and mentor at a Tampa, FL, High Technology Incubator, and they are interested in having such a person work with us to help our Florida startups. Want to hear more of our story? Let’s get started!
I spent over 30 years in Silicon Valley. Most of my time there was spent founding, co-founding, or in executive roles. Silicon Valley is home to many startup incubators and accelerators. Their job is to help identify the next “big thing” and the “teams” to make it happen.
In late June 2015, my wife and I decided it was time for a change. We decided to move to my birth state, Florida.
I now work at a high-tech accelerator with over a dozen startups in Tampa, FL. My startup, Idea To Growth LLC, started here in early 2017.
Growth of an Investment City or Area
Over the years, I found that only some hot ideas or teams live or want to live in Silicon Valley. Venture capitalists have also discovered this. There are great ideas and potential founders in every part of the world. Often, they want to stay where they started the company.
One of the challenges for bright and hard-working startup founders is getting help in their local communities to get their young companies off on the “right foot.” This “help” in most cities usually starts with MeetUp groups.
Later, incubators and accelerators, both non-profit and for-profit, are formed. These provide much-needed coaching. Mentors help startups get the knowledge needed to avoid making the big mistakes that can often sink young companies.
Next, a network of high-net-worth investors, often called Angel or “seed” investors, become aware of the startups and begin making small investments. These investments are usually in the range of $5000 to USD 25K. A few of these investments pay off, but the majority do not.
One solution to the low success rate of angel investors is to pool their investment dollars. They do this by forming a fund and investing in some companies together. A group of high-net-worth individuals will create a Micro VC Fund. This type of pooling of assets allows a single investor to invest in 10–30 companies over the 10-year fund life. The math says group investments are more likely to have a positive return on investment versus random single financial placements.
The Next Challenge: Easy Access to Big Money
Once a startup makes money, it usually needs a significant injection of “gas” to accelerate. This “gas” comes from millions of dollars of investment money. Once a young company gains significant traction, it must accelerate growth. If they don’t rapidly grow, they risk being “copycatted” by another company with more substantial financial resources. Avoiding being copycatted is where access to “big capital” is critical. The challenge is how to get quick and easy access to significant capital.
A recent analysis of the flow of investment dollars has shown that approximately 40% of the Venture Capital invested dollars come from Silicon Valley. New York City is the next most significant area. Boston and Los Angeles, accounting for the next 25%. It thins out quickly, with Washington, DC; San Diego, CA; Seattle, WA; Dallas-Fort, TX; Chicago, IL; Atlanta, GA; Philadelphia, PA; Austin, TX; and Denver, CO, making up the next 17%. Each city has invested between 1% and 4% of the total dollars. No other town broke 1%.
Ways to Fix the Access to Big Money
So what’s a city or region outside of these areas to do to help their local startups? Your local incubator or accelerator wants to attract local mentors with personal VC contacts in Silicon Valley. These mentors can use their Silicon Valley contacts to make warm introductions and help set up face-to-face meetings.
You can push existing VCs to establish a satellite office in your area. Getting a satellite office is impossible until your city has had “exits” with multi-hundred million plus USD valuations. It took Silicon Valley 30 years to be what it is today. Your city or region only wants to take that short time!
Using your mentors is a significant first step that every incubator and accelerator must take. Your mentors can help get you off the ground, but most are part-time volunteers. Most put in 1-4 hours a month at best. Yes, even 1-4 hours is a huge help. But if you want your region to be “big,” you must try other ideas.
I want to focus on one of these “other” ideas.
Hire Your Own Internal Silicon Valley VC
Hire an experienced Silicon Valley VC. Please bring them to your area to run your startup company investment strategy program. You can also focus on one of the cities above that invests up to 25% of the annual investments. But I want to start with the area of the country that supports 40% of those dollars—Silicon Valley.
This ex-Silicon Valley Venture Capitalist would be responsible for working with each of your local Incubator or accelerator startup teams. They would map out a strategy for the investments needed at each stage of the company’s growth. Next, they would create a list of investors and VCs likely to fund each business at each step. Then, using their experience and Rolodex, help the company’s founders set up meetings with Silicon Valley VCs.
How to Attract and Hire a Silicon Valley VC to Your Local Accelerator / Incubator?
So this is my fundamental question and why I wrote this article. I’m looking for anyone who has successfully attracted a Silicon Valley VC to join their incubator or accelerator. If you have one, you are likely one of the 17% investment dollar areas. If not, you’re likely in the 18% of areas in the article I linked to that I still need to list.
My questions are many. Did you take on the role part-time or full-time? What sort of budget did you make? Did the compensation package include anything unique? What were the key reasons the venture capitalists sought to make a move?
Please email me at [email protected] with your ideas or experiences. Also, if you are reading this on LinkedIn or Medium, feel free to post your thoughts there too. I hope what I learn from this will become a model for repeating this in locales worldwide.
I appreciate any help you can provide.
Venture Capitalist – Conclusion
I hope I have educated you on how to be a venture capitalist. The Tampa Bay Area Wants You.
If you are a retiring VC or looking to move from Silicon Valley to the sunny, warm Gulf of Mexico on the central side of Florida, contact me, and let’s talk.
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