By Kate Clark
Welcome back to the transcribed edition of the popular podcast Equity. Kate Clark had the hosting reins this week and welcomed Revolution’s Clara Sieg to the studio.
They discussed the trend of investors backing companies from “second-tier” markets like Austin, Atlanta, Denver, Philadelphia, Seattle, etc. Just how do cities become tech hubs? It’s a special kind of recipe, Sieg says. A city must have a great university, or a few, nearby to provide a constant flow of talent. They need some big corporations around for the same reason. They need a healthy community of angel investors ready and willing to get things going.
Sieg: Fundamentally in these second and third tier markets, an idea on the back of a napkin doesn’t get funded, so you really have to bootstrap to a certain degree and prove out really economics before you can unlock capital. Typically the companies that we’re investing in at the Series A, Series B level are a little bit farther along than their brethren would be in the Bay Area or New York.
Valuation expectations are just lower so you own more of a company for a smaller check-in. Inherently, if it’s an exit, that is a better outcome for you …read more
Source: Tech Crunch