What if the title of this article is wrong? Isn't it possible that American investors are loose?<p>If you believe the hype, foreign investors are scared of failure, less willing to take chances, etc. Yes, investors have different risk tolerances, but most professional investors are not entirely risk averse.<p>Looking at the performance of most venture capital funds, and the venture capital "asset class" as a whole, over the past decade-plus, I think more intelligent investigation of foreign investors' preferences would reveal that there are very good reasons they aren't chomping at the bit to throw money at every tech entrepreneur in need of a few million dollars.
I partially agree with this.<p>I run a startup in Sydney and raised $1M from angels and VCs in both Australia & the US.<p>When I first presented to angels in Sydney I found them initially "tight", and they laughed at the $2M valuation I was pitching.<p>After this I pitched at 500 and at a whim doubled the amount I was raising (and our valuation).<p>The response from valley investors was that it was refreshing I was only asking for a $4M pre and I was able to secure some investment (in the context of several YC companies wanting a 10-15M valuation post YC).<p>I found that with this strike price established by the Americans, the previously "tight" Australian investors then followed suit.<p>Just my 2c.
The PWC report they mention can be found here :
<a href="http://www.startupaus.org/research---startup-economy" rel="nofollow">http://www.startupaus.org/research---startup-economy</a><p>[ PDF here : <a href="http://www.digitalpulse.pwc.com.au/wp-content/uploads/2013/04/PwC-Google-The-startup-economy-2013.pdf" rel="nofollow">http://www.digitalpulse.pwc.com.au/wp-content/uploads/2013/0...</a> ]
What gets me, in the US, is that investors only want to fund companies in red-ocean star cities where studio apartments cost more per month than the average American fucking <i>makes</i> after taxes.<p>I enjoy many things about living in New York-- you fucking hate it when you sign a rent check or change jobs; other than that, it's quite nice-- but it pisses me the fuck off to pay these ridiculous rents (and the real estate costs reflected in restaurant pricing; I wouldn't mind paying $20 for sushi if the money went to the chef and wait staff and not real-estate fuckers). The reason the city's expensive is because top-talent <i>people like me</i> come here and work their asses off, providing a healthy substrate for economic activity that generates lots of value. <i>I'm bringing the real fucking ingredient</i> (talent) and not these unproductive and fucking <i>uncultured</i> absentee landlord fucksticks (half of whom don't even live in the city, and what the fuck are we doing allowing foreign speculators, i.e. third-world despots and their henchmen, to own property here when we can't even provide for our own fucking people?) who've stolen most of my savings. Who the fucking fuck thought "Talent Pays" is a fair or good fucking system? It wasn't fucking me, I'll tell you that much.<p>The talent argument for startups only being in star cities is specious. All it would take is for a few hundred top engineers to move to any city X in unison and that would start something. Fuck, you might be able to build a kernel with 20. You could use a #4-10 tech hub (Austin, Seattle) or somewhere that's not even on the map (e.g. Iowa City).<p>Now, if you're selling to a specific clientele, living in a star city makes sense. If 80% of your clients are going to be financial firms, you want to be in New York. I get that. But there's so much that can be done from anywhere; so why is all the investor money limited to a couple of cities?<p>I am a genetic contrarian so I tend to be one of the first to see when going assumptions are wrong. I think that if you want to build a stable company, you want to be <i>outside of</i> the fuxpensive star cities right now. When the culture is one where you have to become some parasitic VP who doesn't do anything, and then "exit", just to own a house, you're not nurturing the lifelong software engineers who will <i>actually</i> be motivated to build awesome shit. Whereas outside of the star cities, your burn rate is lower, and the "job hopping" climate isn't as fluid (which is good and bad) so you can really invest in people and build for the long-term, instead of being <i>fucking toast</i> if Facebook doesn't buy you before trick-or-treat night.