Why Finding Venture Capital Funding Near You Makes Sense

The location of a venture capital fund should not really matter when it comes to funding, right? Actually, this is incorrect. The distance between the fund and business make a big difference in the outcome.

The relationship between a business and venture capital fund should be a complementary one. The business has the idea and provides the day-to-day effort to push that idea to the market. In many cases, however, the executives at the business have little or no experience bring such ideas to fruition. This is where interaction and advice from the fund managers can make the difference between success and failure. 

There is an obvious inference to draw from this conclusion. The closer venture capital fund managers are to their investment, the more they can provide their expertise. It is an age old notion, one of those old wives stories that seem so true. Well, a new study from the Indiana University business school has verified what many already assumed. 

The study learned two very interesting things. The number of financing rounds required for a business is related to the distance between it and the funding source. Think of it as the divorced parent situation. When a divorced parent can’t be with their kids all the time, what do they do? Any toy store clerk could tell you. They replace their lost time with material goods. 

In the case of VC funding, the study found that businesses closer to their funding source received more hands on management from the VC. At the same time, they needed far fewer funding rounds as expensive mistakes were apparently avoided. The opposite correlation occurred when the business and funding source were far apart. 

What does this tell us? Simple. Try to find funding sources close to you. It may not be possible, but it should be your first strategy. Hands on advice from experienced venture capital fund managers can be the difference between failure and successfully taking your company public.