Q: What was the biggest news in the venture capital world in 2020?
The biggest news by far was the ability for founders to raise millions of dollars or more just over Zoom — without ever meeting face-to-face.
Before Covid, it was required to meet investors face-to-face for any material sized investments. There have been some exceptions, but they were rare.
Since Covid, $1m-$10m, and sometimes much bigger, investments are routinely done without a face-to-face, or perhaps a quick walk-and-talk at the very end with masks on.
We did a deep dive with many top VCs on the topic here:
It’s not all that simple. Much of this money went to founders that (x) VCs had met once before Covid, (y) were second-time founders or otherwise known, and/or (z) had strong brands or traction already. There’s significant evidence that investing over Zoom benefits the privileged in many ways, and that’s a big negative.
But the fact that every top VC firm will invest over Zoom and not require a face-to-face anymore, at least not in many cases … is the biggest change in years.
The second biggest news is the flattening of where start-ups are based. Since every start-up became distributed after Covid, exactly where HQ was no longer much mattered. The advantage of being HQ’d in SF was at least paused. VCs who just a year ago were very biased in favor of SF-based startups … no longer care.
If this stays true after Covid, in the end this may be a bigger deal than raising millions over Zoom. SF remains the home to 80% of public SaaS companies, that isn’t going to change for a while. But where the next generation is based … already has.
The post 2020: When You Could Raise Millions Over Zoom. And No One Cared If You Were Based in SF Anymore. appeared first on SaaStr.
via https://www.aiupnow.com
Jason Lemkin, Khareem Sudlow
