There are really only two problems with investing in start-ups outside the U.S. (minor legal and tax issues aside, which can be resolved):
- It’s more work. Most VCs don’t want to constantly be on planes, especially long flights. Hey, me included.
- Access to future rounds of capital is more limited. The most money is in the U.S., and the most of that is in the Bay Area. This matters less for very late stage investing (no one cared Atlassian was in Australia when Accel invested), but it’s a huge potential detriment in Series A, B and C rounds.
- In enterprise and SaaS, far fewer veterans to plug into the management team. This is a big issue if you do true enterprise sales, less of an issue in SMB and freemium. But if you want someone that has closed Big Customers before, they probably live and work in the SF Bay Area.
So for me, the majority of my venture investments and a decent number of personal investments have been companies that started outside the U.S. (Talkdesk, Algolia, RainforestQA, Showpad, Pipedrive, etc. etc.) or Bay Area (Logikcull). But for me to help especially on the management team side … I kinda need the CEO here in SF.