Why Fundraising Is Different In Silicon Valley - Michael Seibel

TL;DR

Fundraising difficulty outside Silicon Valley does not mean a startup idea is bad. Investors in the Bay Area have frequently said no to later-successful companies, making them more likely to give an idea the benefit of the doubt and focus on team execution.

Key insights

• Early-stage investors in the Bay Area who have said no to future successful companies develop a mentality of “this company might be a good one” and dig deeper before deciding.
• In regions with fewer and lower-quality deals, angel investors rarely see good opportunities after rejecting one, so they are almost always right to say no, making them more dismissive.
• The ability to judge whether a team is executing well is more reliable than the ability to judge whether an idea is good.