Forget Silicon Valley — This Area of the U.S. Is the Future

Being from New Orleans, it’s common to see professionals who have moved away come back for personal reasons. But I recently caught up with a founder over coffee who refreshingly told me something different: “Did you know founders in the Southeast are more capital efficient than those from the West Coast?”

That line stuck with me. Not because “capital efficiency” is now the buzzword of the moment, but because it confirmed something I’ve felt for a long time but never quite put into words: Founders in the South have always been building the way investors are realizing is much more impactful than previous strategies. Translation: What’s new to investors has been our operating reality for years. And that gap? That’s the opportunity.

Investors today are far more focused on how efficiently startups grow, not just how fast, and one metric has quietly emerged as the “North Star” of this shift: the Burn Multiple.

The “Third Coast” — stretching from East Texas through the Carolinas — has been building with this discipline for years. Out of necessity, not trend. When you don’t have the luxury of investors that push you to grow by any means necessary, you learn to scale smartly. Which is why Burn Multiple feels like a home-field advantage in places like Houston, New Orleans and Raleigh.

Related: You’re Growing Fast — But Is Your Money Keeping Up? Here’s the Capital Strategy You Need.

This brings us to MOIC — but what exactly is it?

MOIC — Multiple on Invested Capital — is about as straightforward as it gets. It’s the ratio of how much value a company (or a fund) generates relative to the dollars originally invested.

The math is simple: MOIC = Total Value ÷ Total Invested Capital.

If investors put $10 million into a company, and that stake is now worth $50 million, the MOIC is 5x. There is no Internal Rate of Return (IRR) gymnastics — just a clean and direct measure of return on dollars in versus dollars out.

Why should we care about this? Unlike IRR, which can get distorted by timing or assumptions, MOIC forces you to focus on the actual multiple of value created. It doesn’t care how charismatic the founder is, how slick the deck looks or how “fast” the revenue graph rises. It asks one question: For every dollar invested, how many dollars came back?

Investors typically bucket performance like this:

• <1× MOIC → Loss-making, value destruction.
• 1–3× MOIC → Modest outcomes, often acqui-hires or smaller exits.
• 3–5× MOIC → Solid venture returns.
• 5×+ MOIC → Outlier, fund-maker status.

In today’s capital-constrained environment, MOIC is the scoreboard investors are watching most closely. And the quiet truth? Founders on the Third Coast have been putting up strong MOIC numbers precisely because they never had the option to burn capital and simply raise more.

Why the Third Coast looks different

This isn’t a knock on Silicon Valley. The Bay’s playbook — big bets, speed at scale — built the infrastructure of the modern tech economy. But the world has changed, and the golden age of startups is over.

On the Third Coast, discipline was never optional. Capital efficiency wasn’t a pivot, but the table stakes. Companies here couldn’t raise $200 million on a deck, so they learned to balance growth with financial discipline. Lucid exited for $1.05 billion on just $64.6 million raised (≈16x), while Global Data Consortium exited for $300 million on only $3.5 million raised (≈85x) — two clear examples of the Third Coast’s capital discipline translating into outsized multiples.

Third Coast founders stretch dollars, keep cap tables cleaner and invest in growth that maps to revenue.

Related: Why Founders Outside Silicon Valley Have an Advantage

Structural advantages you can’t ignore

In San Francisco, salaries and rent set the floor. Houston sits at ~84% of San Francisco pay, Raleigh at ~90% and New Orleans at ~75-80%. Office space? San Francisco averages $62/square feet; Houston is $35, Raleigh $33 and New Orleans is just $22. Fixed costs that are 30-50% lower mean you don’t need nine-figure rounds just to survive.

When survival depends on efficiency, waste isn’t just frowned upon; it’s culturally unacceptable. Founders on the Third Coast don’t build with the assumption that another round will be just around the corner. Every hire, every product sprint, every dollar has to earn its place. That kind of discipline creates companies that are lean, but not fragile.

It also shapes a different kind of founder. They learn to negotiate harder, hire intentionally and push for revenue earlier. The result? Companies that scale on their own terms and deliver cleaner MOIC outcomes. Less dependence on outside capital means exits return higher multiples on invested dollars. That’s not austerity — that’s strategy. And in a market where capital is more difficult to get, that mindset is starting to look less like a regional habit and more like a competitive advantage.

Fund-level proof

LP data tells the same story: Third Coast–heavy funds and Bay Area funds from 2015-2020 vintages deliver nearly identical median returns (TVPI ~1.6–1.8x, IRRs in the mid-teens). The difference isn’t outcomes, but exposure. Bay funds carry more mega-round risk; Third Coast funds ride steadier multiples with lower burn.

The both/and future

Real capital efficiency doesn’t mean starving. It’s not about wearing austerity like a badge of honor or bragging about how little you can get by on. It’s about resourcing adequately at the right times — funding the hires, campaigns or product pushes that actually move the needle — while maintaining the discipline to pass on the noise.

Overspending kills companies. We’ve seen it before: raise too much, hire too fast, chase growth that isn’t durable. But under-resourcing can be just as fatal. Starve the business for too long, and you fall into a growth deficit that’s almost impossible to dig out of.

This is where MOIC brings clarity. It doesn’t celebrate penny-pinching for its own sake, and it doesn’t reward reckless blitzscaling. It simply measures whether every dollar invested produced multiples on the other side. That’s why founders on the Third Coast resonate here: they’ve built companies where discipline wasn’t optional, but they’ve also learned when to lean in and place real bets.

In other words, efficiency isn’t about doing less, but doing enough and proving that enough can still return 3x, 5x or more on capital deployed.

Related: Crush Your Growth Goals — Make These 5 Bold Moves to Scale and Keep Your Vision Intact

A movement, not a moment

I walked out of that coffee meeting clear on one thing: The future of venture is still bright, but it’s sharper and more intentional now. We are entering a world where capital efficiency is not just a nice-to-have. It’s a must — and that’s the story we’re living on the Third Coast.

If you want to see what it looks like up close — the operators, the outcomes and the discipline that’s reshaping venture — you’ll find it gathered in one place: the Third Coast Venture Summit.

Being from New Orleans, it’s common to see professionals who have moved away come back for personal reasons. But I recently caught up with a founder over coffee who refreshingly told me something different: “Did you know founders in the Southeast are more capital efficient than those from the West Coast?”

That line stuck with me. Not because “capital efficiency” is now the buzzword of the moment, but because it confirmed something I’ve felt for a long time but never quite put into words: Founders in the South have always been building the way investors are realizing is much more impactful than previous strategies. Translation: What’s new to investors has been our operating reality for years. And that gap? That’s the opportunity.