whatsappI woke up this morning thinking about WhatsApp.

Not so much about the mouth-dropping $19 billion price tag that Facebook put on the five-year-old Santa Clara, Calif.-based startup, the biggest venture-backed M&A exit ever.

But why a deal of this size, style and scope is so desperately needed in Seattle.

I’ve argued in the past that the best thing that could happen to Seattle’s sleepy angel community is to experience an Instagram-style exit — a rocket ship success in which a small group of angel investors get fabulously rich almost over night.

Now, perhaps I’ll start using WhatsApp as an example.

Statista-Infographic_1927_tech-acquisitions-My contention is that an Instagram or WhatsApp deal would positively infect the Seattle investment community, a much-needed contagion sparking a wave of angel investment. Many have argued that Seattle’s wealth — and, yes there is plenty of it — is tied up on the sidelines, not being recycled into the startup community.

I agree. One of the reasons is that the people who made their money on Microsoft or Amazon.com are too far removed from the entrepreneurial ecosystem.

But that can change, and it can happen quickly. And it can be led by just a small crop of individuals.

I can almost imagine it now. A buddy down the street in Medina or Laurelhurst or Madison Park plops $250,000 on some unknown startup, and just a few years later that stake is worth $5 million, $10 million or $25 million.

Wowza! Don’t you think that might get a few more folks interested in angel investing?

This is a different type of outcome than the Tableaus, Zillows and Isilons of the world —which interestingly enough have a combined value that’s about half of what Facebook just paid for WhatsApp.

Those companies were built over time, with blood, sweat and tears. There’s certainly nothing wrong with those types of companies. They are solid, and help form the bedrock of the community. In fact, Seattle has produced some great home runs in recent years.

Jan Koum
Jan Koum

But to get the juices really flowing in the region, I’d love to see an overnight success from an unknown entrepreneur who seemingly comes out of nowhere to conquer a chunk of the tech world. That would enliven the community.

That was certainly the case at WhatsApp, whose co-founder Jan Koum’s rags-to-riches story reads almost like a Disney tale. Koum, who reportedly owns 45 percent of WhatsApp, moved to Silicon Valley with next to nothing at 16 from politically repressive Ukraine.

As Forbes reports, Koum chose the North County Social Services office in Silicon Valley to sign the Facebook acquisition paperwork, a symbolic location since that’s where his family once obtained foods stamps.

Koum and co-founder Brian Acton were able to scrounge up $250,000 in seed financing from some of their old buddies at Yahoo, money that allowed the scrappy startup to survive until powerhouse Sequoia got involved, first investing $8 million and then another quiet round of $50 million last summer.

Money matters.

The other wonderful thing about a WhatsApp-style deal is that the founders — who are still startup guys a heart — are now fabulously rich. They’ll probably stick around Facebook for some time — in fact they are likely locked into a fairly long-term agreement given the amount of money at stake. But what happens when they decide to leave, and put some of that wealth to use?

My guess: More startup capital.

However you look at it, WhatsApp is an amazing startup success story, one which tends to play out more often in Silicon Valley.

Isn’t it time we see a couple of those around Seattle?

Comments

  • http://www.extendedresults.com/ Patrick Husting

    Just going to throw this out there.

    The valley will invest in ideas where there is no possible revenue other than selling the company to someone else. Very risky

    In the PNW, we invest in companies where we see a proven revenue model only. Low risk.

    $19 billion, is just crazy. But good for them!

    • http://www.mac-live.com Shane Mac

      Do you realize that Whatsapp was operating profitably and charged $1 for the app which 450 million people paid for?

      • http://www.extendedresults.com/ Patrick Husting

        Yep, but went they started it and where seeking $$, there were no plans.

        • http://www.mac-live.com Shane Mac

          “No plans.” I’d have to disagree. This thinking is why SF will continue to beat Seattle, just not catching how fast and how big the game is changing.

          • OptimusDiaz

            Hear, hear!

          • http://www.myunfold.om Mark Monroe

            Checkmate!

  • http://codeproof.com/ Satish Shetty

    Facebook valued Whatsapp at roughly $42 per active user, higher than the $33 per active user for Instagram. Also they don’t seem to have a monetization strategy yet. Seems like facebook sees Whatsapp as a threat to their social platform.

    • Kirby Winfield

      No, FB sees WA as a chance to capture 58% more DAU’s for only 8% of their rich market cap. And capitalize on the 1M new users WA adds daily. Sure, it likes the 12-17yo demo, and capturing that data over time. As for monetization, subscription fees already exist and should ramp to $1B relatively quickly. This info is all readily accessible…

      • http://codeproof.com/ Satish Shetty

        Majority of their user base is from India. I dont’ think subscription will make a substantial revenue. Plus WhatsApp keeps only phone number of the user so this makes easy for user to switch to a alternative messaging platform.

        • Kirby Winfield

          Faulty logic: “The proportion of paid app downloads in India is already similar to that of global benchmarks, with 9.6 per cent of Apple App store downloads and 0.5 per cent of Android downloads being paid for.” http://www.business-standard.com/article/management/making-money-in-the-free-app-economy-113110300460_1.html

          • http://codeproof.com/ Satish Shetty

            Not sure about your analogy. There is a difference b/w one-time app purchase v/s subscription.

          • balls187

            Whats App is subscription based. The app is free for a year, afterwhich requires a $0.99 solution.

          • http://codeproof.com/ Satish Shetty

            How do they collect payments after an year? App is free. App doesn’t have any in-app purchases. (LINK: https://itunes.apple.com/us/app/whatsapp-messenger/id310633997?mt=8 )
            Is subscription payment is attached to a phone number or for a device? For example, with same phone number, if i purchase for iOS device, should i purchase again for Android?

            Between, I personally use WhatsApp on my iPhone to communicate with folks back in India. i use it for free (close to a year now). I’ve not seen upgrade experience yet. I know many people in india use WhatsApp and some of them don’t even have a credit card.

            I’m curious how do they collect payments in India.

  • Casey H

    This is the biggest exit the industry has ever seen and all it took was an $8 million series A. The entire future of VC is up in the air.

    • Kirby Winfield

      “Sequoia got involved, first investing $8 million and then another quiet round of $50 million last summer.”

  • http://www.mac-live.com Shane Mac

    John,

    Keep pushing Seattle. After working at Cobalt Group and building Gist with T.A., I couldn’t agree more. Need something to light the fire, hopefully guys like Rudy Gadre will help ignite some magic. He’s being bold and focused on Seattle, love it.

    • balls187

      It was prophesized that Rudy is going bring rocketfuel to the Seattle Startup community.

      He is going to be the Ron Conway of Seattle.

      Also, FWIW TA is awesome.

      • http://www.myunfold.om Mark Monroe

        This has yet to be seen, also I’m going to catch a lot heat from this as an entrepreneur but who cares, the Seattle startup community isn’t serious. We invest in many times ideas that have no social impact and they are part time entrepreneurs not really putting the energy, hustle and passion into it. No risk no reward and if you are going too slow you’ll never win.

        • balls187

          Do you have facts to support your assertions?

          • http://www.myunfold.om Mark Monroe

            The facts have already been presented on many occasions. Look at SF, Boulder, he’ll even Austin and Atlanta startup communities. Look at the evidence of what investors in each of these cities are doing in comparison to Seattle investors. The evidence and facts sit right in front of you. Issues seattle needs to fix before we can say we are competitive, better talent, city support, better and possibly younger investors, diversity and above all stop claiming Amazon, Isilion, Zillow, Microsoft etc. They aren’t startups anymore to which nobody cares. Look at the lack of news about early, seed and series A stage companies raisong money. My startup will most likely raise capital in SF, NYC or even Charleston instead of our ow. Backyard and home Seattle.

          • balls187

            Logic fail.

          • http://www.myunfold.om Mark Monroe

            Explain? Obviously you have a difference of opinion. Please share with the class.

          • balls187

            You claimed Seattle’s Startup Community isn’t serious, and didn’t present any facts, just opinions.

            Inferring from what you’ve written, your opinion might due to frustration you’ve dealt with trying raising money here in Seattle. That’s my read.

            That doesn’t prove Seattle’s Startup Community isn’t serious–truth be told, I’m not even sure what you mean by that statement.
            If you are successful at raising capital in SF, NYC and elsewhere, I will make the bold prediction that you will be able to raise money when you return here.

            From my perspective, Seattle’s entrepreneurship talent is not aligned with Seattle’s institutional investment community. Perhaps this can be classified as “risk averse” or “conservative” or whatever the criticism de jour. Generally speaking, first time founders have a harder time raising money in Seattle.

            I think that Seattle has a much higher bar for founding teams, than SF does, I think that’s partially due to investment thesis, and partially due to fewer dollars to allocate.

            This leads me to think that Seattle requires more of a bootstrapping mentality, than is needed elsewhere. Us founders need to get more traction before we can raise money, and we’ll need to do it on our own.

            But, things are changing: Seattle now has a Super Angel who is putting down significant capital in many funding deals, crowd funding has opened up new funding opportunities for companies, and there are enough up and coming startups that I believe are going to be wildly successful (my current pick is Shippable).

            Look running a startup is beyond hard. Building a viable one is even harder. Getting to break even, even harder than that. A successful exit? Not going to happen. But anything worth doing, is worth overdoing, right? So you have to knuckle down, and get shit done.

            The keys to success:
            1. Focus on product-market fit
            2. Get Customers by building a great product
            3. Hire & retain great people

            Do those things, and you’ll have investors.

            If there is one thing you can’t argue with, it’s results.

          • http://www.myunfold.com/ Mark Monroe

            The facts were presented within scenarios and topics. I wasn’t going to sit here and write again what geekwire has already posted.(Investor opinions and other related news) The startups community isn’t just judged by the deals but by the talent pools, actual success rate from start to scale or death, social impact, etc. When compared to other startup cities Seattle isn’t a competitor at this time.

            You mentioned that Seattle is a risk averse/conservative city, that we agree, there is no reason why a due diligence period should take up to 6 months, but at the same time that chokes the life from Startups looking for such opportunity to be great. As a result those startup leave Seattle, raise money and become apart of the Startup ecosystem elsewhere. I guarantee you if my company raises 1.5 million elsewhere I have no need to be here in Seattle. And given you perspective of investment thesis, than such a system isn’t sustainable to support or encourage such a startup community to develop. You can only set the bar higher once you’ve met the standard first. There is a reason why SF is known as startup capitol for over 30yrs.

            Every startup bootstraps, Seattle is no different here. What you are trying to tell me about a startup, I’ve built a company already from the ground up (without funding) and the company is still profitable and sustaining even as I prepare my exit to run this new venture. Its not just about investors Alan, it goes way deeper than just fundraising. The 12 people that work on my team today the minimum hours is 30. I put in at minimum 100. Majority of my team isn’t here, they are in Charleston because they are hungrier, more focused and dedicated. Those are results I’m sure you’ve probably done your homework on me to know that my career has always been centered as a gogetter and achiever. Though I’d like to get to know more about you the full-stack developer.

          • balls187

            > When compared to other startup cities Seattle isn’t a competitor at this time.

            http://www.geekwire.com/2013/top-3-cities-startups-austin-seattle-boulder/

            http://venturebeat.com/2012/11/20/silicon-valley-tel-aviv-l-a-seattle-and-nyc-lead-top-20-tech-hubs-on-the-planet/

            And I swear I saw the new startup ecosystem index that listed Seattle as #3, but I may have had too many Jellybeans.

            I don’t like being #3 at anything, but evidence doesn’t support that Seattle is woefully behind.

            > there is no reason why a due diligence period should take up to 6
            months, but at the same time that chokes the life from Startups looking
            for such opportunity to be great

            I agree with this. It’s unfortunate that are investors pull this type of nonsense, but I also lay some of the blame on inexperienced founders for not understanding the fund-raising distraction game.

            > they are in Charleston because they are hungrier, more focused and dedicated.

            Sounds like entrepreneur speak for “willing to work long hours for cheap.”

            Perhaps Seattle’s talent pool isn’t as hungry, focused, or dedicated, but that hasn’t dissuaded the likes of Google, Facebook, Twitter, Hulu, and a host of other bay area companies from building engineering offices here, nor has it prevented companies like Zillow, RedFin, Zulilly, SimplyMeasured, INRIX, Avalara, Tableau, from taking root and growing into great businesses, or prevented accelerators like TechStars (full disclosure I’m an alum) from setting up shop here.

            Can Seattle’s startup community improve? Absolutely. I just think the onus is on us, the entrepreneurs, and things won’t change until we stop trying to lay blame, and instead focus on creating great companies.

            I’ll end with this one anecdote from fund raising:

            My first official day as a cofounder, we had a conference call with a prominent tech and media company in NYC. The only way the call could have gone any worse is if they had told us never to talk to them again. It was a sobering moment, to put is mildly. But, we hunkered down, listened to our customers, met with various people in Seattle Startup community and listened to their advice, and we kept moving forward. Fast forward nearly a year, and we’re on the phone with the same group and their completely taken back by the progress we’d made as a company. They loved our idea, and while I can’t talk more about the details, it was pretty awesome to have completely moved momentum in our favor.

            It was a testament to our hardwork, the leadership of our CEO, and our unwillingness to give up, but it also had a big part with the support we received here at home in Seattle.

          • http://www.myunfold.com/ Mark Monroe

            Believe me the members of my team aren’t cheap. Most of them I’ve stolen from Amazon because of their desire to work on a startup project and I know them since we all went to college in Alabama. Most people come to Seattle to work with established companies. To which is fair. But at the same time it overshadows the startup community given that many are programmed for corporate life. I saw that btw on the TechStars side. You’ve had a pretty interesting career within the start up life. So what now?

  • http://www.joshuamaher.com/ Joshua Maher

    Great post John – we definitely need more early stage investors fueling great startups. We also need more great startups to fund. The local angel community is growing in Seattle through growing angel groups and new angel groups. We are also seeing more funds being created to fuel early stage companies.

    Culturally we are much more conservative here in Seattle – not sure that is a bad thing, but it means that we see more exits like Zulilly and Tableau who are exiting based on revenue growth and expected profitability vs. exiting based on active users and potential connection to customers.

    To get more Whatsapp-like startups/exits, does our culture have to change?

    • johnhcook

      Josh. I think you are right on the mark here. You ask a good question.

  • http://twitter.com/chrisamccoy Chris McCoy

    All true points.

    Seattle could use a consumer networks and platforms angel. So much innovation to be had in that space.

  • balls187

    Seattle’s WhatsApp is Wire, a TechStars 2013 company.

    http://www.geekwire.com/2013/examazon-engineers-form-wire-labs-raise-150k-seed/

  • balls187

    Why isn’t Aquantive on the list of big tech acquisitions?

    • johnhcook

      I think it was just a smattering of big deals, not a top 10 list.

  • Rich Barton

    Of course, catching lightning in a bottle would be electrifying to the Seattle startup ecosystem, John. However, I really love that Seattle entrepreneurs have a long history of broadly sharing the upside in their iconic companies by taking these companies public at low valuations. Microsoft, Amazon, Expedia, Zillow, Tableau, Concur, etc all went public at sub $1b valuations. Many of them sub $500m. A whole lot more of your neighbors will make money investing in public companies vs an elite handful of angels and venture capitalists in the model you are wishing for in this post. Additionally, I need to point out that a sell out is called a sell out because it’s a sell out. I’m not being snooty about this, but, in my experience, the more likely way companies and brands become *institutions* is by staying independent.

    • Guest

      When Tom Perkins and Rich Barton agree it must be right. In one of his few moments of apparent sanity in recent weeks, Perkins said that the current crop of silicon valley startups are building products, not companies

      Of course when they disagree I’ll go with Rich every time.

    • johnhcook

      Good points, Rich. Don’t get me wrong, I love the fact that Seattle has produced some blockbusters in the public markets in the past few years, from Tableau to Zulily to Zillow.

      And I hear you on ordinary investors in the NW getting to participate in that upside. That’s fabulous. But I don’t think those public market investors are writing the checks to the next-generation of entrepreneur. I also wonder if a WhatsApp could have successfully raised money in Seattle.

      As Bill Gurley noted in his talk at the GeekWire Summit, it is a great thing that ground-breaking companies have been started in Seattle, iconic companies that don’t just sell out. We are different than NYC, Austin and Boston in this regard, and that’s a great thing.

      http://www.geekwire.com/2013/rich-barton-bill-gurley-unplugged-full-geekwire-summit-session/

      But those very big companies, especially Amazon and Microsoft, almost become weather systems of their own and aren’t as connected to the startup community around them. They gobble up talent, and don’t always spin off new entrepreneurs with the pace you might think.

      I do believe the region needs more angel investors, and VCs for that matter.

      I just wonder how that happens, and my thesis in this post is that a mega-acquisition of $1B or more could help get that capital recycled back into the community faster.

      It may happen with Zillow, Zulily and Tableau too. But it seems to me the top execs at those companies are all too busy building their own companies at the moment, so they don’t have as much opportunity to recycle capital back into the startup ecosystem.

      Plus, and correct me if I am wrong here, but a lot of the early-stage capital has not come from here to get those companies off the ground.

      Yes, Maveron made a bundle on Zulily, but I am not sure there was a group of a dozen early-stage Seattle angels who made out.

      In Tableau, I believe most of the money, if not all, came from NEA out of Silicon Valley.

      You know far better on the history of Zillow’s early-stage financing, and I think I recall you saying that some of the Expedia mafia got involved early, obviously including yourself. But the big institutional VCs that made bank (including Benchmark) were from outside the region.

      So, as Shane Jones notes below, the wealth/capital in Seattle is far too concentrated.

      To really stir things up, more of the wealth from the region needs to flow from the existing tech giants like the Amazons and Microsofts (a tough sell, I think, since that ship may have already sailed) or a new class of investors need to emerge who are more intertwined to the startup ecosystem.

      I do think you understand that, and I applaud your efforts on that front in terms of seeding new startups in Seattle.

      I think we just need 20, 30 or 50 more folks like you running around, making investments, committed to the NW and the entrepreneurial talent here.

      I do think a mega acquisition in which a bunch of people get fabulously rich, seemingly overnight, could help spark that.

      Thanks for the comment!

      • http://twitter.com/chrisamccoy Chris McCoy

        You’re right on John and obviously know it best.

        Plenty of wealth in Seattle. Not enough going to early-stage in comparison to other markets.

        Necessary to incentivize innovation, R&D, risk, and the most talented/capable.

      • http://www.myunfold.com/ Mark Monroe

        Checkmate! John couldn’t have said it any better. My company is an early-stage and believe me it truly sucks that our own backyard is as grim as john put it. But he had no problems in meeting with Charles Hudson, Jeff Clavier, Mitch Kapor and built relationships towards possible investment. If people like these are easy to talk to and work with than why are Seattle investors so difficult? I’m failing to see the difference John and Rich.

  • cp

    Risk aversion has been a big problem in Seattle. It was often discussed among my coworkers and friends over the last 10 years. Even in the solid enterprise companies where Seattle seems to shine, there was a constant sense of being under-capitalized relative to the opportunities.

    Hopefully that’s last decade’s story, though. With the rise of Amazon, SV branch offices and a new influx of transplants, Seattle has a chance to take bigger swings. But somebody’s got to take the risk!

  • Slaggggg

    If wishes were horses, beggars would ride.

  • Chris Evans

    One of VC clients from SV just pointed out to me that Sony’s market cap is less than what FB just paid for WA…that’s mind boggling.

  • http://www.nowmeeting.com Shane Jones

    I really don’t think a single mega deal is going to be the difference maker for Seattle. Multi-billion dollar exits that happen in a short period of time create centralized wealth that is hard to redistribute into the startup ecosystem. Seattle would be better off with 19 companies with $1 billion exits than one company with a $19 billion exit.

    Seattle already has a wealth centralization problem when you look at Bezos, Gates, Allen, etc. Proportional to their net worth, very little of their capital is finding its way back into the startup ecosystem. We need more people with $10mm – $50mm that enjoy innovation and startups and allocate 10% of their investments into angel investing.

    The bigger issue for Seattle is that most people I talk to don’t care that they missed out on investing in our area’s big winners. Practically anyone in this city could of invested in Box in 2006 and seen a 200x return on their money. We need entrepreneurs to believe they can be the next Box and to just get out there and do it and we need more investors to believe in those entrepreneurs…it’s that simple.

    • http://www.MyUnfold.com/ OptimusDiaz

      Have you met MyUnfold’s CEO @disqus_xKWnJQ6cbj:disqus? You two should talk. ;-)

    • johnhcook

      I agree with you Shane. 19 exits at $1 billion each would be much better for the region. Heck, I’d just take one Instagram, frankly. That alone, I think, if the deal were seeded by local angels and the founders got fabulously rich, could have a big impact.

      And, yes, I agree that the wealth created at companies such as Amazon, Microsoft, etc. is not finding its way back into the startup ecosystem the way I — and others — would like to see.

      I also agree that having some top-notch entrepreneurs who’ve made $10 million to $50 million or more — those who get and understand entrepreneurship — could have a big impact. We need more of those. A lot more.

      That’s part of the reason why I am watching what Isilon co-founder Sujal Patel does next. That could be interesting.

      Still, when was the last big billion dollar M&A exit of a Seattle company? aQuantive? Isilon?

      It has been a little while. We’ve certainly had some rock stars enter the public markets, and as I said above that’s a great thing. I would not trade those for the mega M&A deals, because, as Rich Barton notes, that is “selling out.”

      Still, I would say with M&A deals, people tend to leave with more frequency and take their knowledge and wealth elsewhere.

      I don’t think any of the executive team at Zillow has left since they went public, and same goes for Tableau and Zulily. I also don’t get the sense any of them are going anywhere. There’s little turnover.

      I’ve actually been surprised we’ve not seen more activity — both investment and new startups — emerge from the aQuantive ashes.

      I hear you on Box. That definitely was “the one that got away” for Seattle. A painful one.

      That said, don’t forget we scored in Seattle when Christian Chabot and crew decided to build Tableau in Seattle, rather than Silicon Valley.

      • http://www.nowmeeting.com Shane Jones

        I think you hit the nail on the head with the M&A vs. IPO comment. The successes that we have in Seattle tend to make people happy, proud, comfortable, etc. Not frustrated, bored, anxious. We need more people that regret “selling out” to spin out and get back in the game with a new idea. Those are the people that have the capital and connections to talent needed to make a go of it. Churn creates liquidity and startup experience, both of which we could use more of in Seattle.

        I clearly have a bias when it comes to Box (fish that got away) vs. Tableau (the fish we reeled in). I used to own Box stock, but I’ve never owned Tableau. I don’t know much about Tableau’s cap table, but I can’t imagine there are many Seattle angels in there. With Tableau, we basically gained centralized wealth and talent/jobs, which is great. What we missed out on was a big home run for a dozen or two angels, which we could have landed with Box.

        I still think the burden here lies with the entrepreneur. If you want to solve the investor problem in Seattle, be a part of the solution. Build an amazing business, generate a ton of wealth, and get out there and invest in other startups. That’s my plan and I need to hold myself accountable for making that happen. If I didn’t think Seattle could support my company with the right capital and talent, I wouldn’t complain, I’d move. And I’m still here.

  • Out For Justice

    Windows is too prevalent in Northwest and Microsoft, Amazon and Comcast have too much control. When was the last time you heard of someone tuning the Windows kernel in order to service 2 million users per server. With that kind of achievement who could blame Facebook for fronting that kind of money for the acquisition.

  • http://www.OTTERapp.com/ ErikWood

    Great perspective. While the power of zero may not open alot of doors locally, I think this deal will scream about the power of platform agnostic messaging and how users manage it. Some see this wave breaking, others will see it just forming. I’m in the latter group. ;-)

  • gerdo888

    Wait for Amazon to buy ______. Don’t count on Microsoft to do anything like this.

  • B_Sack

    The funny thing is Whatsapp started as a Microsoft Bizspark project.

    • balls187

      Can you elaborate?

      The Bizspark program as it exists today, is just like Microsoft giving software, and marketing support to software startups.

      Is there some other Bizspark incubator or something that does more than that?

  • gseattle

    Money “tied up on the sidelines”, indeed.

    While we do see Geekwire reports of tens and hundreds of millions being invested (staggering figures in my opinion), not necessarily around here.

    Question (and I do believe there is a logical answer to this from the investor standpoint that I don’t understand yet):
    Why are more investors not actively seeking out great potential at earlier stages and lots of: “Hey guys (and/or girls), cheer up, we think you may have some potential, here’s a mere twenty/fifty thousand for the moment (practically walking-around money for some of them), let’s see what you can do with that and we’ll go from there”, or are they? Feed the economy and creativity, reward and encourage efforts. Or maybe they are too occupied already?

    As a future “unknown entrepreneur who seemingly comes out of nowhere”
    attending Seattle Startup events I have heard more than once that investors in Seattle don’t even want to hear from you unless you are referred by someone they know and trust. Fine for the cool kids, more power to ‘em. And the outliers?

    A high bar for entrepreneurs to even be on investor radar. Added meaning to “the Seattle Freeze”.

  • Charley

    Simple answer is that Seattle is a play it safe, extreme risk adverse kind of town. Bay Area, from what i’ve heard, is a much younger entrepreneur profile and team (college and early 20’s) with receiving funding with investors having a more of a “roll of the dice” attitude on startups with the perspective to identify and develop young entrepreneurs and companies. Seattle relies too much on it having to be a proven team that can execute, ideally with the entrepreneurial profile of an older team coming from an Amazon, Microsoft, etc. companies needing proven path to monetization and traction to have a good opportunity for funding.

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