There’s a question we ask ourselves when investing in a startup outside of the Bay Area: is their location a positive for the company? We believe great companies can be built in many locations – not just beloved Silicon Valley – but we do want to articulate *why* a specific company benefits from its geo. This can be based in the founders (strong hiring relationships locally), the local industry (access to customers, partners, talent) or academic hubs (research, talent).
Our second Homebrew fund, the one we’re currently investing out of, has three Southern California startups, all of which are absolutely better, more durable companies being based where they are versus if they had started in the Bay Area.
Joymode (LA), Lumi (LA) and Shield (San Diego) each take the DNA of their home cities and imbue their companies with a sense of purpose. They’re amazing technical teams without being myopically focused on just their engineering capabilities. Outside of the echo chamber, they’re all taking innovative approaches to their industries. None of the CEOs are playing – they aren’t doing this just because their friends and neighbors have started companies.
Homebrew was fortunate to lead their seed rounds and they’ve all gotten far enough to attract a next strong fund – Naspers for Joymode, Spark for Lumi and a16z for Shield. It’s clear that SV capital will come South when the idea is big and the team is formidable. So we’re happy to continue being Day One investors for founders building in LA and San Diego.