For decades, the venture capital (VC) market has been centered around the San Francisco Bay Area. As I pointed out in my fourth Angel Investing Master Class, the Bay Area captures 46% of all U.S. venture money invested.
But I am beginning to see signs that the Bay Area is losing its edge. Startups in San Francisco are more expensive than any others in the country. The cost of living, and especially housing, is unsustainable. The cost of office space is incredibly high. And it costs an incredible amount to hire coders and developers.
The homeless situation is also completely out of control. The last time I was in San Francisco, people could barely walk on many sidewalks because of all the tents. It’s a sad situation.
There’s also a record number of new VC firms in the area competing for deals.
Because of these factors, I am increasingly looking outside of the Bay Area for deals.
Here are two good places to find them.
AngelList Syndicates Outside of the Valley
Barney graduated from Stanford and earned a Ph.D. in computer science from Cambridge. He has vast real-world artificial intelligence experience and has worked at places like SRI International and NASA. He’s a very smart guy. See more on Barney’s Wikipedia page.
Barney lives in San Francisco but is heavily involved with a Canadian startup organization called Creative Destruction Lab (CDL). CDL helps startups scale and build their businesses. Guys like Barney mentor startups in the CDL program. So Barney gets to know the best companies in CDL very well, and he shares the deals with his syndicate when he can.
Riverside Ventures is run by Bryan Rosenblatt. Bryan has an impressive portfolio, including Slack, Bonobos, Lambda School and many more. Bryan is based in New York City but finds deals all over the country. He finds great deals both inside and outside of the Bay Area.
This syndicate has a very high level of deal flow, meaning it offers a lot of deals to members. It has done 39 deals in the last 12 months.
These are the only two syndicates I’m a part of that regularly have good deals outside of California. If you know of any others, let us know at mailbag@earlyinvesting.com and we’ll share them with everybody.