Earlier today Yik Yak, based in Atlanta, announced a $10 million Series A lead by DCM (see the WSJ article). Last month BitPay, based in Atlanta, announced a $30 million Series A lead by Index Ventures (see the Entrepreneur article). Both the founders of Yik Yak and BitPay moved to Atlanta last year from outside of Georgia. Both raised huge amounts of money in a short period of time from investors thousands of miles away.
What gives? Why were they able to do it from whatever city they chose to build their company? Why didn’t they have to be in Silicon Valley?
Growth metrics matter and capital is mobile.
According to Distimo, Yik Yak has more iOS downloads than Whisper and Secret combined. According to Fortune, Bitpay processes more than $1 million per day of Bitcoin. Investors want to see strong traction in a large market — growth metrics matter.
DCM is based in Silicon Valley. Index Ventures is based in London. Each is a serious plane ride and many timezones from Atlanta. Investors want to generate the best returns for their limited partners regardless of where the startup is based — capital is mobile.
When entrepreneurs complain about a lack of funding, point them to Yik Yak and BitPay and show them that capital is mobile with the right growth metrics.
What else? What are some other thoughts on growth metrics and capital being mobile?