From leafy to lofty – The Economist

Venture capital is adapting itself to the new startup landscape



TECH MONEYMEN LIKE altitude. In Silicon Valley the leading venture-capital firms cluster on a leafy hill overlooking Stanford University. And when Benchmark Capital opened a branch in San Francisco, it moved into the top floor of the Warfield building, home to a popular music venue. Although it is in the Tenderloin, one of the city’s seediest districts, it offers a great view of the South of Market area, a breeding-ground for startups.

The bird’s eye view may be similar, but the landscape beneath is shifting. For a start, the internet has democratised not only the founding of startups but their funding as well. When Naval Ravikant wanted to raise $8m for Epinions in 1999 (see article), he went straight to Benchmark Capital and other venture-capital firms on and around Sand Hill Road in Silicon Valley. But because starting up has become so cheap, today’s founders have plenty of other choices, at least in the early stages: their own bank accounts, friends and family, accelerators, angel investors and—the latest addition— crowdfunding sites that allow startups to raise money directly from the general public.

Lastly, venture-capital firms are no longer seen as God-like. Read more here:




One Comment on “From leafy to lofty – The Economist”

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