Should I stay or should I go? There comes a time for every early-stage startup when they’ve acquired customers, proven growth potential and are seeking investment. Reaching these milestones can bring up some crucial questions you need to answer about the future of your company.
It’s never easy planning for the unknown, but determining the ideal locale for you to take your early-stage startup to the next level is one of the most forward thinking moves you can make as a founder and CEO. Here are some key questions you need to consider when deciding the right location to establish your company headquarters:
Go where the talent is.
Access to talent is the number one consideration for picking an environment where your business will flourish. Early-stage startups that successfully raise money next look for talent to expand their operations.
First, think about who you are hiring for, and then think about locations where those types of professionals tend to gravitate. Uplette, for example, is focused on hiring tech talent. San Francisco is a tech innovation center, but competition for hiring tech talent there is pretty fierce. We’ve had great success hiring from our native city of Toronto, where startups from San Fran often try to recruit.
It’s important to think about access to talent first because the larger your team is, the more difficult it is to relocate. Asking an entire team of people to uproot their lives is tricky, though not impossible.
Another thing I’ve learned is that it really takes a village to build a business. Access to a startup ecosystem is a key factor when deciding where to locate your company HQ. With other startups comes access to capital and the early-stage angel investors you need to connect with to grow your company.
Related: 6 Ways Your Startup’s Location Can Boost Your Bottom Line
Bigger doesn’t mean better.
Startup ecosystems aren’t all held to the same standard, however. Each has unique strengths and weaknesses, and being located in a major metropolitan area doesn’t necessarily result in a potent ecosystem. Sometimes a smaller, tight-knit community may serve you better, especially if the location in question has great programs and incentives (like grants and tax credits) for startups in your sector.
Also important to note is that cost of living in major cities tends to be much higher. Even if the ecosystem does provide ample access to capital and talent, it can wreak havoc on your burn rate if you decide to relocate your entire team to a new city.
One way to experience other startup ecosystems without moving your whole team is to look into accelerator programs in other cities. Uplette just finished up three months in Silicon Valley as part of 500 Startups, and it’s one of the best things we’ve ever done. It allowed us to make a name for ourselves in one of the world’s biggest tech community, while not forcing us to settle there permanently.
Related: How to Recruit and Hire the Team You Need at Each Phase of Startup Growth
Consider getting the best of both worlds.
You may find you can get access to capital, startup ecosystems and talent right from where you are. All you need is access to an airport to open doors to other great cities.
My experience with clients and investors is they only care about a few key questions: “Who are your clients and where are they located? Who is selling to your clients and where are they located?”
You don’t necessarily need to relocate your entire team to make the next step, as long as your CEO is willing to travel. Hire a sales person on the ground in those locations as soon as you have the funds available, and you can see amazing things happen without changing the place you call home.
Related: The 25 Best U.S. Cities for Tech Startups
