# Why fundraising is different in Silicon Valley

**Author:** Michael Seibel
**Type:** Video
**URL:** https://www.ycombinator.com/library/63-why-fundraising-is-different-in-silicon-valley
**YouTube ID:** oAEZoAp2_zY

---

Y Combinator CEO and Partner [Michael Seibel](https://twitter.com/mwseibel) on why fundraising in Silicon Valley is
different.

**Topics**  
[00:00](https://youtu.be/oAEZoAp2_zY?t=0s) - Why Fundraising Is Different In Silicon Valley  
[00:25](https://youtu.be/oAEZoAp2_zY?t=25s) - Overcorrecting based on investor feedback outside Silicon Valley  
[00:35](https://youtu.be/oAEZoAp2_zY?t=35s) - Investors are not spread evenly around the world  
[00:50](https://youtu.be/oAEZoAp2_zY?t=50s) - Why Silicon Valley investors are different  
[1:50](https://youtu.be/oAEZoAp2_zY?t=1m50s) - Investors in Silicon Valley are less likely to dismiss ideas out of
hand  
[2:30](https://youtu.be/oAEZoAp2_zY?t=2m30s) - Judging based on if a team is executing

## Transcript

neither day I did office hours with the YC company and they were very concerned about fundraising because they had tried really hard to fundraise in their local community they grew up in North Carolina and it was impossible for them to raise any money so they said to me Michael how do I make sure that we can actually raise money out here in Silicon Valley and they were so concerned to the point that they were overcorrecting based on the feedback they got from their angel

investors in the local community the feedback that I gave him is that unfortunately investors are not spread evenly around the country or around the world and there's something interesting about investors in the Bay Area that's different from investors in other locations typically in the Bay Area if you're an early stage investor for long enough you will have said no to a number of companies who've gone on to be very successful that gives you pause every

time you meet with a new company that lets you think hmm this company might be a good one I should pay extra special attention I should really dig in I should really learn a lot before I make a decision unfortunately in many other parts of the country in the world if you're an angel investor you don't see as many deals and you don't see as many good deals so it might be the case that almost every time you've said no you've been right so

think about this dichotomy if you're in the Bay Area for long enough as an investor you've said no a bunch of times and you've been wrong if you're outside of the Bay Area it's much more likely that every time you've said know you've been correct so the mentality of the investor is completely different the result is that the investor in the Bay Area or any really active startup community is much more likely to not dismiss an idea out of hand they're much more likely to give you the benefit of the doubt on your idea and dig into how you plan to

execute how you plan to monetize and how big the idea can get whereas I notice it's far more common outside of strong startup communities for the investor to try to you to be well or not the idea is a good idea and you know what I've noticed looking at literally hundreds and hundreds of thousands of YC applications is that my ability to figure out what ideas are good or not are much less is much less sharp than my ability to figure out is this team executing and so I much rather

use the is this team executing bar to choose companies than the idea bar so this is a long way of saying if you have been discouraged fundraising in your local startup community that doesn't necessarily mean you've got a bad idea that doesn't necessarily mean you should quit maybe you should consider trying to do that same fundraise in the Bay Area or in a larger sort of community with investors you might be a little bit more afraid to say no without digging deep into what you're working on

you

## Transcript

neither day I did office hours with the YC company and they were very concerned about fundraising because they had tried really hard to fundraise in their local community they grew up in North Carolina and it was impossible for them to raise any money so they said to me Michael how do I make sure that we can actually raise money out here in Silicon Valley and they were so concerned to the point that they were overcorrecting based on the feedback they got from their angel

investors in the local community the feedback that I gave him is that unfortunately investors are not spread evenly around the country or around the world and there's something interesting about investors in the Bay Area that's different from investors in other locations typically in the Bay Area if you're an early stage investor for long enough you will have said no to a number of companies who've gone on to be very successful that gives you pause every

time you meet with a new company that lets you think hmm this company might be a good one I should pay extra special attention I should really dig in I should really learn a lot before I make a decision unfortunately in many other parts of the country in the world if you're an angel investor you don't see as many deals and you don't see as many good deals so it might be the case that almost every time you've said no you've been right so

think about this dichotomy if you're in the Bay Area for long enough as an investor you've said no a bunch of times and you've been wrong if you're outside of the Bay Area it's much more likely that every time you've said know you've been correct so the mentality of the investor is completely different the result is that the investor in the Bay Area or any really active startup community is much more likely to not dismiss an idea out of hand they're much more likely to give you the benefit of the doubt on your idea and dig into how you plan to

execute how you plan to monetize and how big the idea can get whereas I notice it's far more common outside of strong startup communities for the investor to try to you to be well or not the idea is a good idea and you know what I've noticed looking at literally hundreds and hundreds of thousands of YC applications is that my ability to figure out what ideas are good or not are much less is much less sharp than my ability to figure out is this team executing and so I much rather

use the is this team executing bar to choose companies than the idea bar so this is a long way of saying if you have been discouraged fundraising in your local startup community that doesn't necessarily mean you've got a bad idea that doesn't necessarily mean you should quit maybe you should consider trying to do that same fundraise in the Bay Area or in a larger sort of community with investors you might be a little bit more afraid to say no without digging deep into what you're working on

you
