Transportation and Investment… and Startups

Scott Francis
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It seems appropriate to post this on a day when I’m en route to Europe to meet with colleagues and customers in Europe. 

Interesting read on Fred Wilson’s blog on the distribution of Venture Capital.  From the included graphic you can see that SF, NY, LA, and Boston take the lion’s share of the investment activity (25% of the world’s total).  Cities around the world like London, Berlin, Shanghai, Beijing, HK, etc. take in most of the rest – but interesting to note based on the size of the circles on the graph that Austin is competitive with most of the rest, as #13 on the list, trailing London, Beijing, and Toronto (barely), and finishing just ahead of Shanghai and Mumbai.  All data as of 2012.

Fred’s thoughts at the end:

“I would add one more thing to Richard’s analysis. Transportation convenience matters a lot. You can fly direct multiple times a day to and from all of the cities on Richard’s top ten list. Investors value their time and focus it on markets that they can get in and out of easily. I think that has a big impact on where money flows.

But regardless of the reason, I agree with Richard’s conclusion. VC has gone urban. And I think that trend will continue as far as I can see.”

I would take him at his word – and this is one of the many reasons that Austin’s economic development folks focus so much on direct flights in and out of Austin – many times to the same cities that show up on this list of VC investment – San Francisco, San Jose, LA, Boston, NYC, Chicago, Toronto, London.  We have some work to do to add even more to the list, but it has already made a big difference in how we conduct business at BP3 in that we can more likely travel directly to our destinations when we’re traveling.  It is a convenience not to be underestimated, even when our time is not worth nearly as much per hour as that of the VC’s this article is referencing.