David here.

It’s quite an understatement to say that world has changed dramatically since the COVID-19 pandemic swept the United States earlier this year.

The pandemic has significantly accelerated tech adoption in several sectors, including education, manufacturing, and food service. By some estimates, COVID-19 has accelerated tech adoption by as much as three to five years.

This is also reflected by dramatic increases in tech stocks – notably PayPal (up 81%), Amazon (+71%), NVIDIA (+80%) and many others.

In addition to increasing their earnings and market caps, the biggest tech companies in the world (including Facebook and Google) have already told their employees that they can work from anywhere until Summer 2021.

Technology workers are picking up and moving out of tech hubs like San Francisco and New York into smaller and more affordable cities and towns. It’s likely that many of these moves will be permanent as companies learn that some employees are as productive at home as they are in the office (if not more so).

I suspect that the option to work remotely will become just another perk large tech companies throw at their top candidates in the hyper-competitive world of engineering recruitment. This paradigm shift will have profound impacts on angel investors as well as the startups they back.

Before the pandemic, the majority of tech unicorns were concentrated in five metro areas: San Francisco’s Bay Area, Boston, L.A., Seattle, and New York City. If you wanted to succeed as an angel investor, you often had to live or invest in these areas.

Post-pandemic, we may finally see the democratization of the startup ecosystem, with traditionally lesser-known hubs with better costs of living – like Austin, TX; Boulder, CO; and Nashville, TN – benefiting from this development.

To be a great angel investor, you need to always visualize what the world will be like five to ten years from now, using first principles. Think about it like this: to score a goal in hockey, you need to skate to where the puck is going, not where the puck is right now.

If you want to know where the next great startups are, all you need to do is follow the world’s top engineers and where they’re all going.

Traditionally, new tech hubs were formed by a sort of spiderweb of employees from a previous successful company. For example, a group of ex-PayPal employees known as the “PayPal Mafia” went on to found and develop new tech companies, including Tesla (Elon Musk), LinkedIn (Reid Hoffman), Palantir (Peter Thiel), Square (Jack Dorsey), and several others. Similar groups emerged in other cities (e.g., ex-Snapchat employees in L.A. and ex-Groupon employees in Chicago).

Now that the world’s largest tech companies are working remotely, it only makes sense that the best engineers will take advantage of opportunities to move out of overcrowded/overpriced cities and head for greener pastures – effectively “spreading the wealth” of talent to all kinds of new places.

One thing is for sure: the future will look nothing like what we’re used to. It’s difficult to predict the exact long-term effects of this geographic “dislocation” of the tech market – so be wary of any one person who claims to know the answer.

Instead, you should surround yourself with a diverse network of great minds and experienced investors who can provide different lenses and different frameworks from which to view the private equity world. Strength in numbers has been proven time and time again in this industry. It’s why most VC firms and angel groups have at least half a dozen people opine on every deal, as everyone has a different experience that can add to the collective wisdom of the group.

At the Angels & Entrepreneurs Network, we are lucky to be joined by not five or six unique perspectives, but nearly 100,000. It may be the largest community of its kind, and the power of such numbers cannot be overstated. I’m proud to sit on the Advisory Board alongside some of the world’s top experts in subjects ranging from cannabis to entrepreneurship to marketing and more.

A diverse and powerful network is the absolute most important thing for a successful angel investor to have. Just click here to learn about ours.

I’ll be back soon.

Very best,

David Weisburd