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Leo Polovets Profile picture
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Oct 2, 2018 • 10 tweets • 2 min read
1/ People often ask if it's worth it for companies to have an HQ in Silicon Valley. Real estate is crazy expensive here, salaries are astronomical as a result, there's heavy rush hour traffic, and so on. Why do companies put up with this??

One answer: an abundance of top talent.
2/ To take a data-driven approach, I used LinkedIn to count the number of people with different job titles in 4 metro areas: Houston, Atlanta, Toronto, and SF. Each of these has roughly 6 million people, so I would expect them to have similar amounts of tech talent.
3/ Caveat: a) this is not *super* scientific and b) these are searches from my LinkedIn account, so maybe the numbers will vary for different users. Regardless, I believe the numbers paint a strong picture.
4/ HOUSTON
DevOps = 270
VP of Engineering = 798
Customer Success = 294
iOS Developer = 71
Sr Data Scientist = 73
5/ ATLANTA
DevOps = 924
VP of Engineering = 657
Customer Success = 1232
iOS Developer = 214
Sr Data Scientist = 125
6/ TORONTO
DevOps = 946
VP of Engineering = 515
Customer Success = 1094
iOS Developer = 386
Sr Data Scientist = 181
7/ SF
DevOps = 2959
VP of Engineering = 4194
Customer Success = 5229
iOS Developer = 1020
Sr Data Scientist = 1350
8/ What this data suggests to me is that SF has 5x-10x more tech talent per capita compared to other big metro areas. There's more competition for that talent, but the large supply is invaluable -- especially for unusual roles. E.g. SF has 29 video codec engineers; Houston has 0.
9/ As long as there is so much tech talent in this area, I think Silicon Valley will remain a great place for a startup's HQ. However, I also believe the advantage will diminish over time as more & more tech talent emerges in other areas -- or moves there because of living costs.
10/ Addendum: a few people asked me to throw NYC into the mix. Here we go:
DevOps = 1792
VP of Engineering = 2318
Customer Success = 3023
iOS Developer = 778
Sr Data Scientist = 670

So approximately 50-60% of Silicon Valley's counts, but 3x the population.

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More from @lpolovets

Leo Polovets Profile picture
May 20, 2021
1/ A few key levers for deciding how much venture capital to raise:

- can your current valuation support the amount you're raising?
- what set of milestones can you hit, and will hitting them 3x+ your valuation?
- is the money you're raising sufficient to hit those milestones?
2/ These three levers have to work in unison. I.e. you need to raise enough to hit meaningful milestones, while not asking for so much capital relative to existing progress that investors will walk away.

Below are a few common issues founders encounter when picking a round size.
3/ Common issue #1: the amount you're asking for is divorced from what investors will give you based on progress so far. ("We incorporated this month, and we need about $10m to get started.")
Read 6 tweets
Leo Polovets Profile picture
Mar 18, 2021
1/ Founders who get multiple term sheets often struggle w/negotiation because they rarely come out and just say what they want. Here's a common scenario I see, and what I would do differently to get the best term sheet possible.
2/ Common scenario: you get a TS at, say, $15m post, and you have other interested VCs. You ping those VCs and say "I have a term sheet, please make an offer."

Now you get a few more offers, maybe at $13m or $15m or $17m. Most likely, your position doesn't impove by that much.
3/ Alternative: tell people what you want! It's good for you and it's good for them, and you can change the ask depending on how much you like the investor or how much value you think they will bring.
Read 8 tweets
Leo Polovets Profile picture
Feb 26, 2021
1/ Early stage founders regularly ask for advice on setting their own salaries. This is a somewhat touchy subject, but the main factors that I've seen people use to set their own salaries are: a) personal expenses, b) personal savings, c) how much cash the company has.
2/ The main tension for very young companies is that their cash runway is very limited, so the difference between two founders each taking $50k vs $150k per year is huge if the company only has $750k in the bank to start with.
3/ As a result, many founders tend to take a "minimum viable salary." The question you want to answer is: how much cash do you need to cover expenses and not stress out about bills every month?
Read 14 tweets
Leo Polovets Profile picture
Jan 23, 2021
1/ I strongly disagree w/this take. Frankly, suggesting that it's somehow bad to spend resources on AI models for curing cancer is offensive.

I know people that survived cancer & people that didn't, and none of them would prefer having cancer to having big co's investing in AI.
2/ The argument is that wealth shouldn't have so much influence over innovation. But that's backwards. Most big innovations wouldn't exist w/o $ incentives -- which lead to wealth. What fraction of stuff we use was created by companies vs. govts, non-profits, etc? I'd wager 95+%.
3/ The market's incentives will lead to some accruing more relative wealth than others, but they also make everyone wealthier in an *absolute* sense. I'd rather be poorer in a world w/smartphones, refrigerated food, and cancer cures than wealthier in a world w/o those things.
Read 4 tweets
Leo Polovets Profile picture
Nov 21, 2020
0/ I've recently been chatting with people about what it would take to start a new city. It's such an interesting idea to think about! Just like with products, I feel like a startup/charter city should be 10x better for target inhabitants. A few ideas for such cities:
1/ A city for parents -- less nightlife and fewer activities for single people; more options for school, daycare, and enrichment activities; lots of nearby lodging for long in-law visits.
2/ A city for young people just out of school -- lots of fun activities; fewer services for people with families; small, affordable homes.
Read 10 tweets
Leo Polovets Profile picture
Aug 11, 2020
1/ After reflecting for a while on @AngelList's rolling funds, I believe they will be very disruptive.

Previously the best way to start a VC fund was to build an investing track record. That takes many years. Rolling funds allow people to turn reputations into investing capital.
2/ The interesting development is that these reputations don't have to be investing-related. If you have a great network and you're well-known as an amazing founder or PM or ML expert, you can probably roll* that into a rolling fund.

* Sorry about the pun. I am who I am.
3/ Also, if you're a principal at a larger venture fund that doesn't have near-term partner openings, and you have 10k+ Twitter followers, why wouldn't you spin out to do a rolling fund? You can advertise your fund publicly, leverage your audience, and accelerate your career.
Read 6 tweets

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