Actually, this depends on how early stage you are talking.
At the earliest stage, the “Friends and Family” rounds of funding, there is no appreciable geolocated. In fact, this can be further proven by the popularity of crowdfunding and micro lending sites such as Kickstarter, Kiva and GoFundme, which do not rely on any particular location but are instead purely driven by the ability of the project’s owner to convey their passion.
The next phase, Angel Funding, is most likely to be hyperlocal. These are generally people who invest to diversify their overall portfolio or simply as a hobby in addition to other obligations that they have, such as a full-time job or a full-time retirement. Their motivation in investing is more about being passionate in a project than seeing a return on investment.
Either way, they typically have a daily schedule that is not prioritized by their investments, and the easiest way for them to manage them is to have them close to home.
Venture Capitalist firms, while they may also express a preference to have their investments close by, are not driven by this. They are motivated entirely by the bottom line, and will make decisions dispassionately. If it makes more financial and business sense for you to be located elsewhere, then that is what they will encourage.
That said, the person directly in front of a person pleading their case is more likely to get funded tHan someone 5000 miles away.
Originally Posted: https://www.quora.com/Is-it-true-that-early-stage-capital-has-a-strong-local-bias
Originally Posted On: 2016-03-18