I have never been a startup founder. I am not a venture capitalist. I’ve spent a total of ~48 hours in the Bay Area. But I’m super interested in startups, venture, and thinking about the future.
Today, most of venture capital (how startups raise money) sits within a few blocks in California, drawing startup founders and innovators from all over the world to converge to this region, Silicon Valley.
During the COVID-19 response, this set-up began to crack. In a world where work from home became the norm, and Silicon Valley real estate was still expensive, the decentralization of startups and venture capital away from Silicon Valley to the rest of the world became a hot topic. I’m not here to say what is or isn’t valid, because nobody actually knows what’s going to happen. But, for people like me who have tried to break into tech and Silicon Valley from the outside, this is an exciting opportunity.
In response to shutdowns, some venture capital was quick to stand up remote operations. Startups could now pitch to investors over video calls, and participate in completely online accelerators (mentorship and support). In this environment, you could be anywhere in the world, and it wouldn’t matter. You could be on a tiny island in the middle of the ocean, but if you have an idea and internet access, then you should be able to participate as if you were in the trenches of Silicon Valley.
In the longer term, we may see these responses as the first steps towards our new normal. In addition to startups and venture becoming geographically dispersed, a few other relevant trends may be emerging:
- No-Code: The rise of tools such as Webflow and Bubble makes product building more accessible to a broader group of people. The learning curve, time investment, and required skills to build basic products is diminishing. In the future, this may lead to more products, and more people starting side-projects.
- Investment Access: Upcoming policy could update the accredited investor policies to make startup and private market investing accessible to a larger group of people, rather than those who have already amassed wealth. In the future, we may see venture investing approach being as easy as stock market investing is now.
So what does a truly democratized future mean with distributed funding and building ability mean? I have a few starting points (and I’m sure many more once I hit “publish”):
- Startup x Investor Discovery Network: How does Silicon Work From Home operate? If anyone can build, anyone can invest, and they can be located anywhere in the world, then how do they match up with each other? How do we know who is legitimate? Do newly accredited investors stand a chance vs established firms?
- Software Ate the World, Now What?: If anyone can build software, then differentiation has to come from elsewhere. Does this accelerate development of emerging technologies where knowledge moats exist? What is left to disrupt (probably a lot)?
- Competition++: More founders + more investors = more startups. It’s enough pressure with 3 highly-funded competitors, but what if you had 300? When every vertical faces immediate competition pressure, the best service wins, and ultimately, the customer wins.
It’s easy to speculate on what the new problems and solutions of this future could be (I wrote and deleted a bunch). But if this is where we’re headed, than I hope we build the right tools to truly democratize opportunity rather than restrict it.
References (Let me know if there are others to add):
- Fundraise From Home - Pitch Remotely
- Remote Demo Day - Pitch Remotely
- Pioneer - Remote Accelerator
- TechStars Anywhere - Remote Accelerator
- SEC (not football) Press Release - Accredited Investor Changes
- Webflow - No-Code Responsive Websites
- Bubble - No-Code Web Applications