Company Ventures’ Post

So great seeing the fusion of both expanding funds like Company Ventures and homegrown entities like Brickyard creating more talent + capital density in places like Tennessee. Tapping into the unique value propositions of local geographies (industry knowledge, customers, affordability, etc) to spur startup growth is such an exciting opportunity to distribute economic outcomes across the country. cc: Build In SE

A founder with a large following recently dunked on Nashville as a "third-tier" city that you can't raise VC or build a tech startup in. I think that's dead wrong. Here's why: In 2011, I moved from SF to LA to start a company and everyone thought I was insane/doomed. They said I was already giving up before I even started by leaving the Valley. But it turned out to be a huge blessing– the LA VC ecosystem was just getting off the ground with accelerators like Amplify.LA, Mucker Capital, & Science. Because the community was tight-knit, we became a "big" fish in a small pond. This was a competitive advantage for us as we scaled. I was able to get advisors like Jason Nazar, Sara Hicks, Eric Manlunas, Paul Bricault, and Evan Rifkin to join us because they were also invested in seeing LA takeoff. It's far less likely this would have happened if I was stuck in the confines of the crowded Valley. I see a similar trend happening now in emerging startup markets like Nashville that reminds me of the early days in LA. When I moved here in December 2020, the scene for tech investing was dead outside of some healthcare stuff going on. Since then, there's been a great migration due to remote work luring talented people out of the major hubs. In fact, Oracle just announced they are moving their entire HQ to Nashville. No one would have predicted that just 5 years ago. When we started our fund OpenSky Ventures, I had no plans to invest in Nashville companies...the talent just didn't exist there yet. But about a year ago, I met Matthew Peltier who had previously founded and built Community.com in LA and raised 9-figures in funding from top-tier investors. He relocated to Nashville and is now working on an incredible deep-tech AI company which we're participating in the pre-seed round for. The evolution of these cities takes time, but I continue to believe in the "democratization" of startup geographies simply due to the remote work revolution. Who's building in a "third-tier" city - what's your take on this?? PS: The pic is from the Lightning event -- shoutout to Zap ⚡️ for putting on one the best conferences the city has ever seen 🙂

There are many things to think about when building a company from scratch, location should definitely be high on that list: After all, if you're building something to last, it shouldn't just be about how easily you can raise funding, but also where your customers will be, where you can take advantage of existing infrastructure to stretch your runway and recruit talent, and where local incentives align with what you want to build at least in the short to medium term. There are not many early programs that are as attractive as 43North's, in many ways, and they shouldn't be overlooked.

Founders: Want free office space and the chance to work with a community of world-class startup peers? 👀 Applications for the Fall cohort of the Grand Central Tech Residency at Company Ventures are officially open! So, what exactly are Matthew Harrigan and his team looking for? In a recent episode of NY Seed Round, Justin Wolz asked him! Check out the snippet below for his answer. Link to the application in the comments 👇

Thrilled to see this. There is still much to change about the beloved city of San Francisco. Tech leaders fled San Francisco during the pandemic. Founders and investors who moved elsewhere are returning to a boom in artificial intelligence and an abundance of tech talent San Francisco has largely weathered the broader crunch in startup funding. Investment in Bay Area startups dropped 12% to $63.4 billion last year. By contrast, funding volumes for Austin, Texas, and Los Angeles, two smaller tech hubs, dropped 27% and 42%, respectively. In Miami, venture investment plunged 70% to just $2 billion last year.

With our founders based in Los Angeles and Nashville, OpenSky strategically leverages networks in both markets to stay ahead of the curb on current startup and venture trends. LA has long been an exciting place for innovative businesses and investors, but Nashville has recently emerged as a leading startup market where founders want to be and want to build something great. Here's what makes Nashville such a compelling new city to launch and grow a business: 1. Early-stage advantage: Nashville's VC ecosystem is following a similar trend to LA in 2011, where startups can thrive as a "big fish in a small pond." 2. Tight-knit community: Smaller startup communities like Nashville offer strong support from advisors and investors, unlike more crowded, established hubs. 3. Remote work migration: The shift towards remote work has led to a talent migration from major hubs to cities like Nashville. 4. Attracting big players: Oracle moving its HQ to Nashville highlights the city's growing appeal, validating major investments in emerging markets. 5. Untapped potential: Nashville's tech talent pool is expanding, with founders like Matthew Peltier, who previously built Community.com in LA, launching promising ventures around the city. Recognizing the potential in emerging startup geographies such as Nashville is important to gain a competitive edge as new opportunities arise. For founders and entrepreneurs, have you built a company in an emerging city like Nashville? What advantages or challenges have you encountered?

San Francisco is on the up and up... San Francisco is once again experiencing a tech revival. Entrepreneurs and investors are flocking back to the city, which is undergoing a boom in artificial intelligence. Silicon Valley leaders are getting involved in local politics, flooding city ballot measures and campaigns with tech money to make the city safer for families and businesses. Investors are also pushing startups to return to the Bay Area and bring their employees back into the office. Investment in Bay Area startups dropped 12% to $63.4 billion in 2023. By contrast, funding volumes for Austin, Texas, and Los Angeles, two smaller tech hubs, dropped 27% and 42%, respectively. In Miami, venture investment plunged 70% to $2 billion in 2023. (WSJ)

Absolutely thoughtful follow-up reporting by Tamara Chuang and the excellent The Colorado Sun, on the post-Techstars outlook here in Colorado. I was among the surprised at the sudden exit of Techstars from its hometown. But I like the question Yoav Lurie asks in the Sun story: "(There's) a huge opportunity to fill a void. But, what should we fill it with? Should the new thing look like Techstars did back in the day? Should it be many smaller things?" Boulder doesn't feel to me like the early-stage startup town that drew me and many others in 10+ years ago. I've only been on the fringes of Techstars, but this trend to me is less about the role of Techstars and more about the maturity of the Boulder region as a startup and business place, including: -More startups that reached a big scale (operating, acquired, IPO) -More big offices of major companies in the region -More tech-adjacent mega companies growing up here -All the factors Yoav mentioned, too (pandemic, cost of living, etc) So I'm in the camp that the void is being filled by lots of other things. For example I've sort of been a de facto leader of the Xoogler.co community in Colorado since 2016, supporting Christopher Fong and team's worldwide efforts. For years we had a small but mighty group of tech founders in the area with Google ties - David Norman, Nancy Trigg, Aidan Chopra, Scott Lininger, Tim Enwall, Jose Vieitez and others who have been generous with their time. Suddenly over the last year, there are dozens of former Google people either already here, or recently moved here, starting businesses of different types in the area. I'll do a better job of helping to share their stories and any others because, as always, one of the great things about being here is a supportive atmosphere, at its best.

I’ll probably get in trouble with the Atlanta investors for this, but it needs to be said: If you’re an early-stage ATL-based founder looking to raise a round, you might want to avoid Atlanta VCs. Such was the topic of this dinner that I attended, hosted by Michael Morgenstern of Brex and Avoilan Bingham of Drive Capital. The dinner reconfirmed what I already knew: I’m not the only founder who feels this way. I’ve spoken to plenty of others and have seen this firsthand—Atlanta’s early-stage VCs aren’t actually early-stage. Many of them are looking for founders with $250K ARR before they even consider investing. That’s a wild expectation for pre-seed and seed startups. On top of that, the terms offered in Atlanta often aren’t as favorable as what you’ll find in traditional startup hubs like San Francisco or New York. I’ve talked to funds in the Southeast offering $1 million for a $4 million valuation, meaning you’re giving away 25% of your company right out of the gate. Not ideal. Now, don’t get me wrong—I love ATL, and I believe in its potential. It's still the best city for underrepresented founders, thanks to supportive communities like @Goodie Nation and a thriving network of entrepreneurs. But when it comes to raising venture capital, here’s my advice: Start your fundraising efforts in other major hubs. Get a lead investor from somewhere like SF or NYC, and fill 70-80% of your round before you approach Atlanta investors. Once you have momentum, you can then approach local VCs for follow-on capital and benefit from the connections to big companies here in Atlanta, especially if you're selling B2B. Atlanta is an amazing place to build a company (and this is coming from someone who has lived and worked here for nearly four years), but when it comes to raising capital, early-stage founders may need to look elsewhere to get the best terms and avoid unrealistic expectations. Any other founders want to weigh in? What’s been your experience raising in Atlanta? #atlantatech #atlantastartups

San Francisco Is Still the Startup World’s Kingpin If there’s one city that continues to wear the startup crown with swagger, it’s San Francisco. With a staggering $430 billion in venture capital (VC) deals, the city by the bay remains the unchallenged leader in the world of tech innovation and unicorn breeding. New York might be trying to catch up with $180 billion in VC deals, but that’s like trying to play tag with a cheetah. Beijing is also in the race with $150 billion, but San Francisco? Well, they’re practically lapping the competition. Other big players like Los Angeles, Shanghai, and Boston are making their mark too, but there’s no denying that San Francisco’s gravitational pull on talent and capital is stronger than ever. The weather may be foggy, but when it comes to attracting VC, the skies are crystal clear. If you’re thinking about launching your next billion-dollar idea, San Francisco is still the place where dreams take flight—just make sure you bring your A-game and a strong Wi-Fi connection.