05/15/12 | Uncategorized

Startup Fundraising (West Coast vs. East Coast)

Investors in the Silicon Valley and Silicon Alley ask different questions, evaluate deals on different criteria.

By Ellie Cachette (Founder & CEO, ConsumerBell)

The interesting thing about fundraising, in general, is that it’s very complex and there are many things that can affect your chances or strategy around funding. Each ecosystem is different as to how it sees value in things so it’s important to know where the best ecosystem is – for your company as well as investors most likely to invest in your company.

For example, if you are mobile and need to build your team, try to find areas that have talented or underpoached developers. If you are social and need to be close to other agencies, then you should find where those agencies are.

Having started a company in Silicon Valley and moved it to Silicon Alley in New York, I have found the fundraising experience in each ecosystem to be entirely different.

From my experience, the criteria and questions you will get are different as each region has different value points that indicate how it can invest.

Things you will hear on the coasts:

What WEST Coast Investors Ask –

What EAST Coast Investors Ask –

  • Is the market big enough?
  • How are you going to capture the market?
  • How will you market the product?
  • How will you afford development?
  • Who is your CTO?
  • Who is your COO?
  • Who is using your mobile app?
  • Do you have an mobile app?
  • Without a technical co-founder, you are unfundable.
  • Without a MBA or someone with financial experience on your team, you are unfundable.
  • How many users do you have?
  • Do you have a prototype?
  • What is your virality strategy?
  • What is your acquisition strategy?

The West Coast tends to care more about product and ability to attain engineering talent, whereas the East Coast puts an emphasis on logistics and running operations that can scale. Both are very hard to do in general, let alone while bootstrapping.

In some respects, since each area has its own indicators and preferences, it can be helpful getting a taste of both. While you end up with a seemingly unrealistic list of things to do, you learn more about your company and begin the first steps of balancing what will be the beautiful and enticing journey of entrepreneurism.

Buckle up.

Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.

About the guest blogger: Ellie Cachette is Founder and CEO of ConsumerBell, helping companies and parents manage recalls while keeping kids safe. Recognized by the California State Senate as an “Outstanding Educator” in AIDS and Public health in 1997, Ellie has been an active supporter in the campaign to cure AIDS and promote healthy living. Ellie is a product safety junkie and strong advocate of Women 2.0, a Silicon Valley organization dedicated to empowering female entrepreneurs.

Anne-Gail Moreland

Anne-Gail Moreland

Anne-Gail Moreland, an intern with Women 2.0, was on the StartupBus. She studies neuroscience at Mount Holyoke College, where she is trying to merge a passion for tech and the brain into a new wave of cognition-based technology

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