Alternatives to Silicon Valley: Building Your Global Business Anywhere
Lex Research Topics in Corporate Law & Economics Working Paper No. 2015-2
36 Pages Posted: 15 Jul 2015 Last revised: 17 Aug 2015
Date Written: July 14, 2015
Entrepreneurs who are driven, ambitious and dream of building a global business that will change the world are going to have to survive the difficult period in the early stage of the life cycle of a company known as the “Valley of Death”. In order to be successful in this challenging task - after all, many businesses will fail at this early stage - they will need to raise a significant amount of money. But this need for money raises a series of daunting questions: “Who should they turn to for investment?”; “What kind of money do they want to attract?”; “When is the right moment to seek investment?”; and, “Where should they locate their company, if their dream is to build a global business?”
This last question - we will refer to it as the “Where question” - is perhaps the most important of all, not least because it will determine the available options for answering the other questions. Research has consistently shown that over the last three decades Silicon Valley has been the place to go. Over recent years, however, this picture has become somewhat blurred. If deal growth is examined, for example, it is clear that more and more high risk venture capital deals are being put together far from California and that the correct answer to the “Where question” is becoming much less obvious. A global business really can begin anywhere.
An important new development is the emergence of a global or “virtual” innovation eco-system. A metaphor for understanding various features of this new phenomenon is that of the Cloud.
Keywords: entrepreneurship, governments, hedge funds, innovation, lawyers, mutual funds, private equity, Silicon Valley, sovereign wealth funds, special economic zones, start-up communities, start-up companies, venture capital, virtual ecosystems
JEL Classification: D20, F60, G38, J40, K20, L22, L26, O30, O38
Suggested Citation: Suggested Citation