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Back to Ramtin Naimi on the State of Venture Investing, with Ramtin Naimi.

Why Is Silicon Valley the Best Place to Start a Company?

Ramtin Naimi says Silicon Valley stays the best place in the world to start a company because of how many people there write personal checks before any institution shows up.

No other startup region has ever taken off the same way. Silicon Valley has the largest density of individual check-writers by an order of magnitude, probably 100x or greater. People there run around writing 100k to $1 million personal checks off their own balance sheets to put companies in business before they are institutional. Some employee balance sheets are already the size of a huge angel fund or a huge seed fund. A person will write a million dollar check and, if the money is lost, will not care. The mentality belongs to Silicon Valley and does not show up anywhere else.

In his view, a bunch of people making huge amounts of money off early angel investments is probably good for continued startup innovation, and more people writing the checks is probably good for innovation.

Grokipedia·Silicon Valley

Transcript

Ramtin Naimi on the State of Venture Investing ·

Invest Like the Best with Patrick O'Shaughnessy

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  1. Why Are Hot Venture Rounds Getting a Second, Pricier Tranche?Ramtin Naimi says the hottest companies now sell a second, much more expensive slice of the same round to the firms that lost the first one.
  2. Is the Current Venture Cycle More Like 2019 or 2021?Ramtin Naimi says the current venture cycle could still be 2019 rather than 2021, even where the behavior rhymes with the last boom.
  3. Why Are Mega Venture Funds Raising Two or Three Times in One Cycle?Ramtin Naimi says mega platform funds have probably raised two to three times inside a single 18 to 24 month window, so deployment is about 3x faster than the…
  4. What Is the Customer Value Fund?Ramtin Naimi says GC's customer value fund finances growth when a company can prove that every $10 million unlocks $30 million of revenue.
  5. Why Is One Neolab Spending a Billion Dollars on a Single Training Run?Ramtin Naimi says a neo lab he met a couple of weeks ago was raising $1 billion in a financing he thinks was its second round, and planned to spend the entire…
  6. Why Do Seed Deals Assume a Trillion Dollar Outcome?Ramtin Naimi says seed prices follow a moving goalpost for how big a startup might become, and the current goalpost is a trillion-dollar outcome.
  7. What Is the Biggest Mistake Ramtin Naimi Made Building Abstract?Ramtin Naimi says the biggest mistake he has made building Abstract is raising every fund too small.

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