It is almost deemed common sense to follow where the money is, but one must also consider where the opportunity is as well. This is where the thought leaders get a head start and potentially receive better returns. The Rocky Mountain region is looking favorable for investing due to recent startup activity and a lack of access to capital.
Recent startup trends are looking favorable for the Rockies. The Rocky Mountain region states are Colorado, Montana, Wyoming, Utah, New Mexico, Nevada, Arizona, and Idaho. All of these states rank high on the Kauffman Index Startup Activity Rank for 2015.
Fishing for Returns
Angel investors should always consider the water they are fishing in. The Rocky Mountain region is setting itself up to look like a stocked pool. With so much start-up activity, angels can afford to be picky while also diversifying their portfolio. Not to say angels should throw their money in the area assuming one will be a home-run type of investment. Yet, they have a bigger selection to compare and contrast similar investments.
The 2015 Annual Halo Report shows that 3 out of 4 Angels invested within their region. However, less than 18% share of all angel dollars are within the Rocky Mountain Region (this yields higher competition among the startups). Therefore, with less money coming from out of the region, and only 18% of total money within, start-ups need to build a well rounded deal to stand-out and gain an Angels attention.
(I.e. More activity doesn’t necessarily equal better returns, but it does yield more opportunity and more investment options. Always do your due diligence/invest smart, but also consider regional activity or trends.)