Hey Valley VCs, Haven’t You Heard? Washington DC is Hawt!
February 26th, 2010 by Ernesto Gluecksmann
There you are! Where have you been?! Running late to the party aren’t you? Ok, well no sweat. Just pay attention. I know a guy. I’ll get ya in…
This “town” of two cities (Washington & Baltimore) is full of talented & bold entrepreneurs. If you are a well-funded venture capitalist from out west, I am going to give it to you straight, “East Coast style.” You would have to be a fool not to seriously consider this area for opportunities.
Let’s look at what your money has to contend with out west: you have sunshine, great surfing, snowy mountains, and lovely weather year round. You have corporate tech campuses that look more like college dormitories. Trying to score the next Twitter in the Valley sounds like combing through a picked over fruit stand just before closing time. Even if you find something “fresh,” it’s probably already been pawed at by your larger competitors.
Here on the East Coast: there’s no skiing. Our mountains are covered in ice. Don’t bother bringing your surfboards, either. Our Capitol was built on a swamp, not the beach, for good reason — the Founding Fathers knew they needed to keep the wandering mind focused on getting things done.
So just bring your laptops. We have endless cube farms just over the Potomac River and plenty of wifi around town. Because you know what we do for fun around here? We WORK. This is a town full of workaholics!
How are those West Coast portfolio burn rates doing these days, btw? Not so “hawt” huh? Tell you what, because I like you, I’ll fill you in on a little secret. Come closer…I don’t want EVERYBODY to know…
DC is full of diamonds in the rough. They’re surviving as lifestyle businesses, bootstrapped from the ground up, because the VC pool here doesn’t have a deep end. These gems are hyper-focused on delivering products & services that are in demand, making a difference, and oh my gosh, this is the best part… some of them actually have paying customers. Yes! I know! Who does that, right?
But hey, slow your roll. Don’t get too excited and start bringing all your VC friends to the party. These Washington and Baltimore entrepreneurs are pretty tough. They’ve been going at it without the Valley’s help just fine. It’s not like they need your money to fund their next office foosball competition. If you want to play, you have to offer some fair deals or they’re just going to turn you down.
So yes, Valley VCs, I’m speaking to you. When you get sick and tired of burning off your cash on the next dollar mobile app of the week, do yourselves a favor and pay a visit to your nation’s Capitol. I think you’ll be pleasantly surprised.
Tags: Angel investor, East Coast, It's Just Business, Social Networking, Startups, Twitter, Venture capital, Washington DC
February 26th, 2010 at 11:31 am
Hey, you make it sound like the Mid-Atlantic is a big strip mall. I totally disagree. The district itself may have a lot of poltico’s running around, but it is a hip young place that these days has become the envy of quite a few people from around the region and outside of the region. Take a short drive outside of the District and you have access to some amazing Beaches, Chesapeake Bay, Virginia’s Blue Ridge Mountains, and the amazing mountain and river country of Pennsylvania. Included among that are some very fine rapids and places to skii and snowboard. Our VC Community isn’t so bad off either. 2008-2010 might not have been the best years for the economy, but there were quite a few startups that got funded into the 15-30 million range. There were some not so bad exits too including Bill Me Later just outside of Baltimore. Even the little guys like TapMetrics have had some exit success.
February 26th, 2010 at 1:47 pm
Sssh! I know Bob. I’m just trying to make it sound like we’re extra hardy around here.
I totally agree with you of course. I love Washington DC. It’s arguably one of the best and most livable cities in the world. And especially right now if you’re interested in cities with growing tech sectors, this is definitely the place to be. With Baltimore being right next door, this entire region is excellent breeding grounds for technology & innovation.
In the ReadWriteWeb comments, there was one guy (SP) that I think definitely hit the nail on the head with his comment about how despite all of what we have to offer, there’s still not enough seed/early round investors here. Yes, some of the local businesses are getting serious $ investments ($5m-$20m) but there’s not enough interest in helping startups looking for anything under the $1m mark. My gut thinks that the real problem there is that the local tech sector competes with the biotechs in the area very poorly. The money sloshed around for biotechs is mind boggling larger. It simply dwarfs the money that’s available for next “web app” product here. So without early funding in this town, what you see lot of bootstrapping going on here. There are no spoiled darling tech startups here, that’s for sure.
October 3rd, 2010 at 4:53 pm
[...] Silicon Valley needs to look outside of its little world, and see that there are many other types of businesses and opportunities that are both lucrative, life changing, and fulfilling. Since when did following the herd ever become a good idea when it comes to building a business, anyway? [...]