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This Isn't HBO: Tried And True Ways To Succeed In Silicon Valley

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You have seen the show, but what is your strategy for turning vision into reality? You think (read: you know) you need to spend more time in Silicon Valley, but you are unsure of when and how to make the leap. Good news: every other Israeli startup that made it has been in your shoes.

In this talk, we will offer practical advice for you to implement based on real case studies from the past 10 years of working with and advising Israeli startups and entrepreneurs that have successfully brought their companies to the Valley.

Some of the topics that will be covered include:

* When and how to begin fundraising, best practices and common pitfalls
* Five common mistakes Israeli entrepreneurs make
* Main misconceptions about Silicon Valley
* Understanding Silicon Valley American language beyond the smile

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This Isn't HBO: Tried And True Ways To Succeed In Silicon Valley

  1. 1. SOSA, Tel Aviv July 15, 2014 This Isn't HBO: Tried And True Ways To Succeed In Silicon Valley
  2. 2. Life Work EDU
  3. 3. 3 40 Alumni Startups >$50M in total funding 70% of raised follow-on funding >20% of teams have a female founder Acquisitions by Google, Priceline, Gartner, etc Dozens of Fortune 500 customers and partners Largest community of entrepreneurs innovating between Israel and Silicon Valley
  4. 4. 5 Topics & Objectives What is Silicon Valley All About? Prioritizing your time Creating Momentum Remotely Establishing your “engagement model” Establishing Presence Beginning to weigh the options, best practices Fundraising Understanding the process & differences from Israel
  5. 5. 6 Topics What is Silicon Valley All About? Creating Momentum Remotely Establishing Presence Fundraising
  6. 6. 7 “It’s Easy to Raise Money!”
  7. 7. 8 “Look! A Unicorn!”
  8. 8. 9 After All, Numbers Don’t Lie 12 3 2 Silicon Valley New York Israel Venture Capital Investment in 2013 ($B) “Unicorns” = >$1B (since 2003) Silicon Valley New York Other 29 3 7
  9. 9. 10 8200 49 81Talpiot F-16 “We’re The Startup Nation”
  10. 10. 11 Imagine You Are an Israeli investor… … and one day someone you don’t know drops by… Would you invest in someone… … you have never met before … who you have no context about … and who lives thousands of KM away*? *Amazing traction? Unique tech? Strong reference? You meet with hundreds of startups from your network…
  11. 11. 12 Yes, Investors Love Them They spent lots of time on planes They often have presence in US They generated significant momentum
  12. 12. 13* So what do they care about? But In Reality… (and apologies in Advance) Nobody Cares
  13. 13. So If Not Fundraising… Product/Market Fit (do your customers want what you are selling?) + Distribution (can you effectively get your product to your customers?) + Business Model (are you able to make money?) Create Momentum Users Customers Partners Advisors New Hires Investment Commitment Thought Leadership Press … Build a Business
  14. 14. 15 Silicon Valley: Reinforcing Ecosystem Early Adopters and Customers Knowledge & Innovation Multi-stage Capital
  15. 15. 16 Topics What is Silicon Valley All About? Creating Momentum Remotely Establishing Presence Fundraising
  16. 16. 17 “I Know I Need to Come, But…” “…I need to first do a pilot in Israel, so I have something to sell and not ‘burn’ myself” “… coming every few months is enough” “… I will hire a US Sales person to do the work” “…I have the best tech, so they will buy from me”
  17. 17. 18 Set-up Visit Follow-Up Planning Ahead What To Do Ensuring Continuation Creating Momentum
  18. 18. 19 The Set-Up It’s Always Good Timing (advice/feedback, trial, sell) Identify Customers, Partners, Sources of Feedback (relevant, motivated) Plan ~6 Wks Ahead, Visit for at Least 4 Wks (Anchor, conference/meetups, 50-75% planned) Ask for Help! (friends, etc)
  19. 19. 20 The Visit Know Your Story (why they should care, what do you need) Build Relationships, Emphasize Context (listen & learn, project continuity vs. quick hit) Ask for & Schedule Follow-Up Meetings Allow for Semi-Planned Networking (Meetups, “Stand in Luck’s Way”) Meet *Some* Investors (friends) Ask for Even More Help!
  20. 20. 21 The Follow-Up Track & Summarize Send Personalized Messages (recap, give back) Ensure Momentum (action items, updates) Plan Your Next Trip (In person > Skype)
  21. 21. 22 Summary Make Silicon Valley Part of Your Routine Focus on Creating Momentum Plan Ahead, Ask for Help
  22. 22. 23 Topics What is Silicon Valley All About? Creating Momentum Remotely Establishing Presence Fundraising
  23. 23. 24 “Between the execution risk (that is within your control) and the risk of not being in Silicon Valley (which becomes out of your control), I choose the former. I want to choose the risk I take.” -- Noam Bardin, Waze CEO Why?
  24. 24. 25 9 Best Practices 1. CEO/Founder in US, Co-founder in Israel 2. Product/Engineering Alignment 3. Constant flying How When What 4. STSSTIAP  Early Product 5. Don’t Wait for Funding 6. Don’t Wait to complete Pilot in Israel 7.Get out of the building 8.Hire US employees 9.Prioritize PR (when ready)
  25. 25. 26 Do Your Research
  26. 26. 27 Topics What is Silicon Valley All About? Creating Momentum Remotely Establishing Presence Fundraising
  27. 27. 28 Before We Begin… This is the REALLY short version There are always exceptions If | When | What | How Bold = SV-adjusted
  28. 28. 29 If Aligning Incentives with the Investor High Level of Commitment Opportunity Cost
  29. 29. 30 Fund Economics Hit Driven Business Few Investments per Partner  Betting Their Career Example: $500M Fund $1.5B Returns $7.5B Exits 3X 20% Equity Mega-funds influence ecosystem (Angels, Accelerators)
  30. 30. 31 Investor Goal: Big-Ass Returns
  31. 31. 32 When Time = Your Most Valuable Asset Plan to spend 3-4 months fundraising “I will move after the round…” Time of Year: Feb-June, Sept-Nov Your “Shelf life” Know Your Domain’s “Personality” (B2B, B2C, B2B2C) Momentum: Lines Vs. Dots Raise When You Can
  32. 32. 33 What Round size = 2x larger Valuations Differences Enough for 12-18 Months Cap Table Management Milestone-based?
  33. 33. 34 How US Roadshow! (not) References Really Matter Research portfolio to target relevant investors Focus on investors that care (VC vs. Angel) “Hard No” vs. “Soft No” Do your Due Diligence…
  34. 34. 35 Common Pitfalls: The Short List Not Being Positive and Upbeat Giving the Impression You Know Everything Trying to raise too early / too late Transactional vs. Relationship-Oriented Not Knowing Your Story or What You Want Not Knowing Person, Company, Competition Badmouthing/Dismissing the Competition “Market Always Wins” Pilot In Israel
  35. 35. Thank You gil@upwestlabs.com

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