Combine a National VC with a Regional VC

Last month, I was talking to an entrepreneur about his upcoming fundraising round, and he shared an approach that I hadn’t heard before. His ultimate goal for the funding round was to secure a lead VC from a national, brand-name firm combined with a strong regional fund.

My curiosity piqued, so I asked him why. He told me it comes down to getting the best of both worlds.

Here is why this hybrid strategy makes so much sense for growing startups.

What the National Brand Brings to the Table

For the national firm, the entrepreneur was looking for macro-level advantages. When you bring a top-tier national firm onto your cap table, you gain access to resources that smaller firms simply cannot replicate:

• Instant Cachet: Broad brand recognition that immediately validates your company to the rest of the market.
• Deep Pockets: The financial reserves required to comfortably anchor subsequent funding rounds as you scale.
• Specialized Resources: Dedicated operating partners, industry-specific expertise, and connections to related portfolio companies.
• Network Perks: High-level ecosystem benefits, including exclusive CEO summits and regular founder get-togethers.

Why the Regional Firm is Indispensable

Knowing those massive national benefits, I then asked why he wanted a strong regional firm as well. His answer was brilliant. Since his company was not based in one of the main venture capital hubs, and he intended to keep growing the business exactly where he was, he needed local muscle.

A strong regional firm provides the boots-on-the-ground advantages that a distant national firm might miss:

• Hyper-Local Networks: Deep roots in the local ecosystem, including connections to regional vendors, partners, and corporate allies.
• The Talent Back-Channel: Regional firms have worked with hundreds, if not thousands, of professionals across their local portfolio companies over the years. They know the talent pool intimately.
• Recruiting Power: When you need to scale your team locally, a regional VC can actively help you vet and recruit top-tier talent, from executives to early-stage employees.

The Takeaway for Founders

Thinking more about this approach, it really resonated with me. A national brand-name firm brings the prestige and macro resources, while a strong regional firm drives local execution and relationships.

Most of the time, entrepreneurs do not have the luxury of choosing between multiple ideal firms. When you are raising money, you often have to take the best deal available to keep the lights on.

However, if you are in a position to shape your round, this approach is highly worth considering. My recommendation to founders is to think deeply about what you actually need from a capital partner. Consider a strategy that combines two different firms, allowing each to bring their unique strengths, resources, and talents to the table.