Seed investments are a local game - Berlin, however, is hyperlocal
Last week Sten Tamkivi (an EIR at Andreessen Horrowitz) posted an article on TechCrunch that supported the general opinion that seed funding is a local game.
Well, this blog is about startup ecosystems and of course, I share this opinion. I have talked to many business angels in the past 12 months and I can confirm: while some of them could imagine cross boarder investments, the majority would rather invest in their home country.
Some seed investors (business angels and institutional) have even a regional preference. The institutional investors might be dependent on public money (that comes from a region or city) and business angels might be interested to build a reputation in one particular city.
The German blog Gruenderszene quoted a study (yet to be published) stating that 85% of Berlin-based venture capital firms invest their funds in Berlin-based startups as compared to only 20% of Munich-based venture capital firms investing locally.
Hopefully, Berlin - as a startup ecosystem - can deliver on that trust.