By Nancy Dahlberg
The floodgates have been open for months now and the influx of venture capitalists and tech founders who have flocked to the 305 from Silicon Valley and New York City has been impressive. Some may be simply riding out the pandemic (we don’t blame you) and we welcome you to check us out. We hope you’ll like it here, David Blumberg, Keith Rabois, Jon Oringer, Harry Hurst, Alex Taub, Christian Jorg, Alexandra Wilkis Wilson, David Goldberg and the list goes on. As you’ve seen on VC Twitter, Mayor Suárez wants to help you make this relationship with Miami permanent.
But Goldberg of Alpaca VC, a New York-based seed stage venture firm, has flirted with a move back to Miami twice before since his years as a UM undergraduate. Will this time stick?
In 2012, as founder of fashion-tech startup FreshNeck, Goldberg was quite literally surrounded by inventory – and paying NYC office prices for warehouse space. “We started looking at emerging ecosystems. Long story short, my conclusion was there wasn't enough going on [in Miami]. I was worried about raising capital.” Strike 1, but understandable. There was strong intention but little to see back then.
After selling his startup, Goldberg considered Miami again in early 2015 as he and Ryan Freedman were building Corigin Ventures, which was rebranded to Alpaca this summer. Although the fund’s stronghold would be in NYC, they were considering emerging ecosystems for offices, why not Miami? “I reached out to everyone I knew down here and created a spreadsheet of who should I talk to. And as you can imagine, at the time, it was the same 10 names over and over,” Goldberg said. Again, too early. Strike 2.
Goldberg continued to visit a couple times a year. Alpaca invested in Class Wallet and co-invested with Miami VCs Melissa Krinzman and Nico Berardi on others, and a year and a half ago a number of local angels and lawyers invested in Alpaca’s last fund. The ties grew deeper and the conversations within Alpaca continued as the Miami ecosystem was growing stronger.
Getting warmer …
Then, Covid happened. Miami again on the mind.
While one Alpaca partner stayed in Brooklyn and one is riding out the pandemic in Aspen, the Goldberg family rented a house here sight unseen that has quickly become home. They put their kids in school. He set up an office, and got involved in the startup community.
Will they stay? There are still unknowns in a post-Covid world, but the leading indicators are all pointing up, Goldberg says.
“And for me, and I think for my firm, we've been really cranking remotely. We've done three to four deals over the last couple of months, pretty normal.”
What else did Goldberg have to say? Some excerpts:
On Alpaca’s seed-stage investing: “We consider ourselves focused generalists. Each partner has their own specialties from our own operating experience. Ryan focuses 95% of his time on real estate technology; I spend my time on marketplaces and consumer companies. Aubrie [Pagano] spends most of her time on ecommerce infrastructure as well as virtual communities. … Out of our second fund, a $37 million vehicle, a typical check is between $500,000 and a million. We lead about 30-40% of our deals at the higher end.”
On Miami now: “Miami has always had that attraction, between the taxes, the weather, the lifestyle, all that stuff. But what was missing was a network effect of founders, the talent and the capital…. But now hiring a distributed team has become not only OK but for many companies it has become a competitive advantage. And you're starting to see some of the old guard of investors – the Shervins of the world – down here and attracting more investors, and really interesting founders coming down here.
“It just feels like all of the pieces are together to start the flywheel moving to really make Florida happen. And once that happens, it's so easy for someone else to say. ‘Why would I not live there -- it has all those things and now it has the ecosystem there as well.’ And part of the reason we chose Miami is Miami is actually set up really well for a COVID world … twelve months of no winter -- that's a huge advantage.”
On the Miami startup scene: ”It feels like there’s this energy and quality is significantly better than when I started looking eight years ago, and again about five years ago. I think one of the questions in Miami is what is a Miami startup? LA did really well with media and consumer companies, Boston was always known for biotech and Silicon Valley for deep tech. What can Miami be known for, is it hospitality, is it healthcare? I'm not here to answer that question, but I think that's one thing that can happen naturally that would be helpful to the ecosystem. Think about some of the big winners that have started out of here, it’s very random. They haven't followed a typical path, and that's fine for the companies, but in terms of storytelling it feels a little lacking. It’s not a must-have but it certainly helps.
“It’s one thing to have local startups down here to build out credibility and get bigger in size. But on the capital side, if you play this two-sided marketplace with capital and startups where it is only local capital investing in local companies, you can imagine just how long it's going to take because you really have to get that supply and demand right … For whatever reason, capital down here has not done a good job of getting into the best deals in New York, San Francisco, LA, Boston … What ends of happening is Miami winds up getting viewed as a non-collaborative ecosystem. It’s why you don’t have New York funds saying who is the First Round Capital that I need to meet in Miami so I can see everything there? We are hoping in a post-Covid world we can play that role – or at least part of it.”
On Miami ecosystem development: “No. 1, you just need time. In a slow build on all sides, your accelerant of that fire would likely be either homegrown or [relocation] of what I would call a real traditional tech startup, the Silicon Valley-like darling that everyone writes about, or it’s a large fund starting here … I think on the investor side you have a lot of people toying with it but it is all lifestyle. Like the fund will still be a New York fund, but instead of being remote in the Hamptons they will be remote in Miami."
On startup trends: “There has been a massive shift around what work looks like and the future of work, and not only are behaviors changing but you are starting to see technology infrastructure software being built to either mitigate or propel those things. One of our recent investments was Firstbase, doing very well in Covid -- they provide and maintain physical operating systems for companies that have all or part of their team remote. They basically are going to provide everything you need for a remote employee.”
Advice to startups interested in Alpaca: "Reach out directly and be very clear why you are the right founder for your specific company and why we are the right investor for your specific company."
And to all our new residents whether you are here for the winter or, hopefully, sticking around like the Goldbergs, welcome to #MiamiTech! Just please don't call us Silicon Beach. We're feeling so loved we'll need to come up with a name now.
Photos courtesy of David Goldberg. Follow @ndahlberg on Twitter and email email@example.com.
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