0
LESSONS FROM SILICON VALLEY
ARIEL POLER @ariel
Ariel’s Background
 Founder: IPRO, Topica, Textmarks & Best of Angel.
 Board Member: Kana, LinkExchange, Freedom Financi...
Silicon Valley is Another Planet
It is not the US. It is not California. It does include San
Francisco.
Company formatio...
Fundraising
Seed Valuations & Terms
• Most seed deals are convertibles with a cap, many are
priced with simple Series Seed terms.
• So...
It is not a Black and White distinction
between Angels, VCs, Private Equity
There are many shades of Grey...
-Full time pr...
On "average", It takes 6 Months...
But averages are often meaningless
"Hot deals" are done in a few weeks, sometimes a few...
"You are too early” and other excuses
Most investors do deals when they get excited. But they don't
like to say “I am not ...
Tips for Pitching
Who you pitch to is the most important thing
Don’t confuse product pitches (or sales pitches) with
com...
International Companies have better
chances of fundraising elsewhere
• Silicon Valley is the only region with too many goo...
Beyond Fundraising
You can’t literally follow all
the advise that you get
There are many ways of building companies
You must find the appro...
Don’t believe what you Read
Most success stories are made with 20/20 revisionist
hindsight
It often takes time, e.g. Stu...
Speed is overrated!
What good is going fast in the wrong direction?
The better you understand where you need to go, the
...
Risk is your friend
Make big bold bets. All of the most successful
entrepreneurs do!
Use time to diversify: focusing on ...
Take advantage of opportunities -
but be careful about where you
end up
IPRO story:
Started with consumer analytics
Fol...
Hire Slow & Fire Fast
The moment you start thinking someone might not be
working out, he/she most likely isn’t
But letti...
Focus on your most
important market from the
start
Be careful about starting with the “local” market as a
stepping stone ...
How to choose my
entrepreneurs?
Did I have fun during the meeting?
Do I want to have him over for dinner?
Is the opport...
Help me Help You
Do your homework
The right people to talk to
The topics you want to discuss
Be Specific
Add value
Upcoming SlideShare
Loading in...5
×

Lessons from silicon valley

668

Published on

1 Comment
6 Likes
Statistics
Notes
No Downloads
Views
Total Views
668
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
26
Comments
1
Likes
6
Embeds 0
No embeds

No notes for slide

Transcript of "Lessons from silicon valley"

  1. 1. LESSONS FROM SILICON VALLEY ARIEL POLER @ariel
  2. 2. Ariel’s Background  Founder: IPRO, Topica, Textmarks & Best of Angel.  Board Member: Kana, LinkExchange, Freedom Financial, Odeo, StumbleUpon, LOLapps, Scan, Strava.  Investor: AdMob, Flixster, Slideshare, Xobni, RockYou, Outright, BrightRoll, Instructables, Causes, VivaReal, Optimizely, Rally, Thumbtack, Viki, Pantheon, ApartmentList, Mashery, StumbleUpon, Kongregate and NexTag.  Personal: MIT (math), Stanford (mba), San Francisco (home).
  3. 3. Silicon Valley is Another Planet It is not the US. It is not California. It does include San Francisco. Company formation, financing, growth and sale have been “systematized”. Tons of talent and resources – but even more demand for it - so you have to fight and pay up for it (salaries, rents, lawyers, parking…) Kitesurf with Larry Page. Have lunch with Mark Zuckerberg. See a movie with Jack Dorsey. It is difficult to absorb during a short visit…
  4. 4. Fundraising
  5. 5. Seed Valuations & Terms • Most seed deals are convertibles with a cap, many are priced with simple Series Seed terms. • Some seed valuations are stratospheric ($15-20MM). On average most seed deals are valued in the $4-$6MM range. The amount of money raised can have (and should have) a big impact on valuation • Common to have no lead and a rolling close • It is becoming more common to extend seed rounds multiple times – and do follow on convertibles with higher caps
  6. 6. It is not a Black and White distinction between Angels, VCs, Private Equity There are many shades of Grey... -Full time professional angels. -Angels with funds. -VCs that focus on seed investments. -VCs that participate in seed rounds. -VCs with Private Equity growth funds What matters most is the individual, not the firm! Do your homework to identify the best possible people. BTW, “Signaling” risks are exaggerated
  7. 7. On "average", It takes 6 Months... But averages are often meaningless "Hot deals" are done in a few weeks, sometimes a few days Many deals never get done. And somehow the average is 6 months... The best thing you can do to increase the odds of a successful financing is to move your business forward. Be careful about spending tons of time fundraising.
  8. 8. "You are too early” and other excuses Most investors do deals when they get excited. But they don't like to say “I am not excited", so instead they use an easy excuses, such as: - You are too early - The deal is too small - I want to see more customers/revenues/technology Be careful about trying to solve address their excuses, because once you do they are likely to find others. Instead, figure out how to get them excited. Investors like to keep their options open.
  9. 9. Tips for Pitching Who you pitch to is the most important thing Don’t confuse product pitches (or sales pitches) with company pitches Key points often overlooked Customer acquisition strategy Unit economics It is not about checking boxes. It is about getting the investor excited
  10. 10. International Companies have better chances of fundraising elsewhere • Silicon Valley is the only region with too many good deals. Investors elsewhere HAVE TO invest outside their region, but we don't. So the bar is much higher... • So non Silicon Valley companies might be better of fundraising in places such as London, New York or Boston. • Of course, a few Silicon Valley investors do invest abroad, but the bar is higher and the choices scarce
  11. 11. Beyond Fundraising
  12. 12. You can’t literally follow all the advise that you get There are many ways of building companies You must find the approach that works for you Advise should help you gain insights and to experiment It is the same for competitive athletes…
  13. 13. Don’t believe what you Read Most success stories are made with 20/20 revisionist hindsight It often takes time, e.g. StumbleUpon and Twitter were not overnight successes as some people think… 20/20 Hindsight gives great strategic vision. Realistically, successes are built incrementally. So, don’t obsess over your world domination vision. Just make sure you have a vision for a small success – from which you will be able to build a larger one. To use a baseball analogy, start by getting to 1st base.
  14. 14. Speed is overrated! What good is going fast in the wrong direction? The better you understand where you need to go, the faster you can move But, never stand still! If you have money you will spend it… Get it when you know how to use it
  15. 15. Risk is your friend Make big bold bets. All of the most successful entrepreneurs do! Use time to diversify: focusing on one thing at a time But it is OK to experiment with different things for a while until you decide what you want to focus on. But just for a while…
  16. 16. Take advantage of opportunities - but be careful about where you end up IPRO story: Started with consumer analytics Followed customers to traffic auditing Became World leader Web traffic auditor BUT… That turned out to be a lousy business! Make sure you enjoy the road People, product, learning, fun…
  17. 17. Hire Slow & Fire Fast The moment you start thinking someone might not be working out, he/she most likely isn’t But letting someone go is difficult and painful for everyone, so…, take your time hiring. Same goes for co-founders, service providers, and others. Talent Over Experience References!!! Or better yet, a trial period.
  18. 18. Focus on your most important market from the start Be careful about starting with the “local” market as a stepping stone to a larger market... You might get stuck there and never quite make it to the larger markets If you want to be a global player, focus on a large market from the start
  19. 19. How to choose my entrepreneurs? Did I have fun during the meeting? Do I want to have him over for dinner? Is the opportunity & market large & worthwhile? Will the project have a meaningful impact? Can I help?
  20. 20. Help me Help You Do your homework The right people to talk to The topics you want to discuss Be Specific Add value
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×