Build your startup anywhere

I have had the pleasure of pitching Charley Lax from Grandbanks Capital several times in the past. He’s a smart, experienced, opinionated, cigar-smoking VC who says what he thinks. Still, I was quite taken aback by this little gem from Charley in the most recent issue of Venture Capital Journal:

But that doesn’t stop him from moving the management team of every Canadian startup he backs to the Boston Area. It’s a strategy he calls Red Sox Nation. “We keep all the engineering in Canada, but then we hire a new CEO, COO, CMO and CFO here in Boston,” he says. “The plethora of talent in Boston—which is home to dozens of billion-dollar tech companies—is huge, compared to Montreal or Toronto.”

It’s true that Boston and the Valley have more proven talent (in fact more of everything) than other places.  But to categorically assume that these lesser markets do not possess people that can build great companies is just wrong. If you believe this and if you follow Charley’s strategy, then it becomes self-fulfilling.

The US is a very important source of capital for Canadian startups. If you want to build a big, valuable company then chances are very good that at some point you will raise growth capital in the U.S. And yes, it would be easier to just move head office to somewhere in the US. You would have access to more talent, networks, etc. There are times when this approach makes sense. But if we play along and export head offices to the U.S., then we will never build a thriving, long-term startup ecosystem.

This is not just about Canadian head offices moving to the U.S. I think this same issue applies to any startup that is not in one of main startup hubs. I asked friends on Quora for examples of great startups that were located in “lesser” cities. You can see their responses here.

So, its up to you. If you want to move to the Valley or Boston, that’s cool. I respect it. If not, then don’t let anyone tell you that you can’t build a great company wherever you are.

P.S.

I got on my soapbox about this topic before when Venture Hacks said people should just give up and move to the Valley

http://www.startupcfo.ca/2010/01/its-not-just-about-silicon-valley/