San Francisco's VC Boom Is Over
bloomberg.com
bloomberg.com
San Francisco seems to have found its niche with B2C while the South Bay focussed on heavier stuff, e.g. satellites, ML, et cetera. Highly-correlated markets, but similarly distinct as New York and Long Island.
Maybe outside of demo days ("organic" vc or whatever you'd call it), it becomes a factor due to people walking into offices or other lead generation efforts.
It's also hard to believe that late stage financings (which are larger but less frequent) care at all about location, given that so many of them are from outside the geography entirely, including international.
If you have stats from something more quantified that would be interesting.
Maybe not how it should be, but certainly how it is; with a new Bay crossing slated for 2040 at the earliest it'll be like that for a while.
And some people apparently think "second Bay crossing" refers exclusively to a road, which is not what I meant
Comparing to Palo Alto where you either have to take Caltrain and take what feels like a double digit risk of a multi-hour delay, or else a hour plus drive, compared to the 15 minutes it takes to get from FiDi to downtown Oakland is just ridiculous on its face. I've lived in both Oakland and Palo Alto, and anyone complaining about SF <-> Oakland commute has no sense of Bay Area commute perspective.
* Kidding, but there are people like this.
Sketchiness? Yeah, Soma has homeless people and some unpleasant crowds on 6th St and spread throughout; but it doesn't even come close to the sketchiness of pretty much anywhere in Oakland. I've had guns pulled on me on the outskirts Rockridge and that's supposed to be the nicest part of Oakland… don't really see that as likely to happen in Soma.
What then, weather? Soma has the sunniest weather in SF, but still remains temperate year round. When everyone across the bay is melting in 95 degree heat in summer, Soma stays a nice and cool windy but sunny 75.
SV investors (including YC) opened some offices up in SF, but well before that they were driving up and having meetings in other offices.
Not to mention that most of Canada's population - Greater Vancouver and the Windsor-Quèbec corridor - border the most left leaning regions of the US excluding California; the Pacific Northwest and the Northeastern US respectively. Alberta politics are roughly similar to those of Montana or the Dakotas.
"New York Metro Area"
"LA/Orange County"
and of course the whole of "New England" -- yup an area that takes almost 10 hours to drive tip to tip: https://goo.gl/abZHs7
It's clearly an intellectually dishonest maneuver to split SF from Silicon Valley. Done probably just so they can generate the headline "San Francisco's VC boom is over".
I think that's drawing a lot from one quarter? SF has a significant drop in %, but it's still an outsided leader (Almost 2x the next category) and has been for half a decade.
"But the San Francisco VC boom is also increasingly looking like it might be something else: a bubble that has begun to deflate"
Not sure invoking "bubble" is that useful in this context.
That said, living in SF and working in SoMa, I do feel the pressure of infrastructure needing to catch up. I often wonder if we've just hit a physical limit with the city as it is today.
(Bonus round: when the U.S. Treasury coins money, it records a claim against the Treasury's equity [1]. This is separate from the Federal Reserve's banknotes, which are a debt-like claim on the Fed. In practice, the Fed buys equity in the Treasury and then issues banknotes.)
[1] https://books.google.com/books?id=HIuxDQAAQBAJ&pg=PA169&lpg=...
Also, we're into a period of big political uncertainty, both domestically and internationally, so the next big growth area is going to be hardware with defense applications.
"In the first half of 2017, ICOs have outstripped traditional blockchain venture capital funding, raising $327m of funding."[1]
[1] https://techcrunch.com/2017/07/15/the-decentralization-of-st...
Long term both cities will dominate and I don't see this as a structural change, this just seems like a shift based off of what is popular in VC funding right now.
When I moved to the Bay Area in '84 there was no tech in SF at all, and around 1999 when Hummer Winblad opened their office at South Park people would write articles about them asking why you would open an office way up there.
I have to say I was shocked by these figures
Slightly off-topic… is Uber now "too big to fail" for the VCs invested in it?
The massive-growth-model of startups dictates "YOY, double revenue on a 50% cost increase. Rinse and repeat until profitable". As long as the funding holds out, this model is mathematically sound.
Uber is well on track for this from the (admitted dodgy) numbers I have seen - those being summarized here http://money.cnn.com/2017/04/14/technology/uber-financials/i.... Uber is (again, rumoured) to have doubled revenue in 2016, with a reported $6.5B net revenue, and a loss of $2.8B for ~$9.3B in costs. Double and 50% those numbers, and you get $13B, and about $12.2B, or ~$1B in profit.
When I first started my career, I lived in Seattle and really struggled meeting fellow entrepreneurs and VCs. People just seemed to live there to work for the two massive tech companies that are there, but not to start their own.
When I moved to Silicon Valley a year later (having lived there ever since), the culture and affinity towards entrepreneurship was a night and day difference.
I'm not sure what would lead you to believe that Seattle would be ahead of New York.