In an effort to highlight some of the emerging tech centers across the world we've written on a number of cities for our Never Mind the Valley series. We've featured the funding and opportunities available in places like Washington DC, Bangalore and Beijing. Our intent has never been to create regional rivalries, but rather to highlight the diverse landscape of the tech world in general. That being said, few stories got as much attention as the piece on New York as passionate East Coasters rallied around their hometown. Despite what seems to be a surge of love for the Big Apple, SpeakerText CEO Matt Mireless recently pointed out the shortcomings of the New York tech scene and announced his exit to the Valley.
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Similar to Yammer CEO David Sacks' move from West Hollywood to San Francisco, Mireless is moving his company to where he believes he can find more opportunities. In an article for Business Insider, Mireless explains that while legendary VCs like Chris Dixon and Fred Wilson are in New York, they are only a fraction of the investors that companies are pitching.
He writes, "In reality, the capital markets in NYC are flooded with Wall Streeters turned venture capitalists. These are people who know how to analyze and pick in assets, not people who know how to build companies. These are people who do dumb s@#$ like ask about pricing for a premium version of a genuinely novel product (in a category with no existing market) that hasn't even launched yet...in the first meeting."
On top of the shortage of experienced tech VCs, Mireless complains that New York has a weak angel network with only a few groups to pitch. Because of this, entrepreneurs only have a few shots to get their pitch right and they've got little opportunity to drive competition when negotiating deals. Mireless believes the result is lower valuations and slower deal cycles. He also believes that because Wall Street has skewed programmer expectations in regards to salaries, it's very difficult to find talent who will take a pay cut in exchange for equity. A month ago Venture Hacks' Naval Ravikant also made the case for startups to move to the Valley. Nevertheless, Hunch cofounder Caterina Fake makes the case for New York adding that the city needs a billion dollar company exit in order to free up some talent and resources.
While we've seen our fair share of non-Valley startups succeed and grow, it's interesting to see so many tout the opportunities of the region. Having covered so many startups, we know that you can pen a deal through your global and online network. But is it possible that just as certain employees and partnerships are more appropriate for a particular stage of the product lifestyle, that certain locales are more appropriate as well? Let us know your thoughts in the comments below.
Photo Credit: Epicharmus / Michael
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