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Strategies for Accessing the US Market (Feb 1-2, 2016)

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In this talk, I try to offer practical advice for you to implement based on real case studies from the past 10 years of working with and investing in dozens of Israeli startups that have successfully brought their companies to the US.

Some of the topics covered include:

* Plans for creating momentum in the US, even while you are based in Israel
* Considerations and best practices for establishing your US office
* If, when and how to begin fundraising in the US

Published in: Technology
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Strategies for Accessing the US Market (Feb 1-2, 2016)

  1. 1. Strategies for Accessing the US Market Siftech, Jerusalem, February 1 2016 The Library, Tel Aviv, February 2 2016
  2. 2. Work Life Edu
  3. 3. Located in Silicon Valley, we are early stage investors that dedicate years of valuable support and resources to drive long-term growth Any stage | Any domain | Pre/Post funding
  4. 4. Day 1: UWL Investment CheckPoint team Product demo No customers +6 Months Four F500 customers SV-based Advisors Raised $3M +2.5 Years Many F500 customers 50+ employees Raised +$37M
  5. 5. Day 1: UWL Investment Israel-based product No segment focus +6 Months Clear strategy Raised $2M, inc. Twitter founders +2.5 Years Many US customers 60+ employees Raised +$30M
  6. 6. Challenges of Israeli Startups Fundraising in the US? Creating Momentum Remotely Establishing Local Presence Q&A
  7. 7. A Guy Walks Into a Startup….
  8. 8. Challenges of Israeli Startups Understanding market needs, customer validation Gaining momentum (early adopters, partners) Accessing value-add investors ….
  9. 9. “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”
  10. 10. 8200 49 81Talpiot F-16 “We Are The Startup Nation”
  11. 11. V C Nobody Cares
  12. 12. When Do They Care? 1. They generated significant momentum 2. They have presence in US
  13. 13. Challenges of Israeli Startups Fundraising in the US? Creating Momentum Remotely Establishing Local Presence Q&A
  14. 14. The Most Important Thing to Know When Raising Capital
  15. 15. Let’s Take a Step Back…
  16. 16. Pension Funds, University Endowments, Wealthy Families, Corporations, etc Bonds, Stocks, etc VC Capital Allocation to Venture Capital = 3-10% Who Invests in VCs?
  17. 17. Top 20 VC Funds Other VC Funds <1x 1-2x 2-3x >3x VC ReturnsVC Funds 98% 95% 2% 5% Do VCs Meet Investor Expectations? 50% 33% 10% 7% VC ReturnsVC Funds
  18. 18. Fund Fund Economics Returns Exits $1B $3B $15B 3X 20% Equity * Few Investments per Partner
  19. 19. How Do The Best VCs Reach 3x? Option A Option B Exit 1 Exit 2 Exit 3 Exit 4 Exit 5 Exit 1 Exit 2 Exit 3 Imagine you made 30 investments…. Returns = $3B Returns = $3B
  20. 20. Implications * VC could agree to smaller exits if you are not going to be big as they had hoped, IRR & fundraising considerations, founding team really insist, etc Startup “I need to show potential for $50M in Revenues in Year 5 (or >100M users)” VC Partner “Should I bet part of my career on this startup?”
  21. 21. Goal: Investing In The Winners
  22. 22. VC Economics Impacts All Investors Large Funds Micro-Funds Angel Investors “I need large exits” “Small exits are unlikely… Need micro-funds to invest in my startups” “Medium-size exits are unlikely… Need large funds to invest in my startups”
  23. 23. In Short: Aim High No, Really: Aim High!
  24. 24. If You Are Raising In the US…. No “2-week funding roadshows” Get local proof: customers, advisory board, etc Learn from Israeli entrepreneurs (R&D in Israel, etc) Ask for help, leverage friendly intros Move before the round (50%+ can work too) Early Stage Investing is a Local Business
  25. 25. Top 5 In-Meeting Mistakes Israeli Entrepreneurs Make 5 - Not knowing your story or market 4 - Badmouthing/dismissing the competition 3 - “Mr/Miss-know-it-all” 1 (Tie) - Overly transactional/Valuation-focused 1 (Tie) - Not being positive and upbeat
  26. 26. Challenges of Israeli Startups Fundraising in the US? Creating Momentum Remotely Establishing Local Presence Q&A
  27. 27. Set-up Visit Follow-Up Planning Ahead What To Do Ensuring Continuation Creating Momentum
  28. 28. 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)
  29. 29. 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!
  30. 30. The Follow-Up Track & Summarize Send Personalized Messages (recap, give back) Ensure Momentum (action items, updates) Plan Your Next Trip (In person > Skype)
  31. 31. Summary Make the US Part of Your Routine Focus on Creating Momentum Plan Ahead, Ask for Help
  32. 32. Challenges of Israeli Startups Fundraising in the US? Creating Momentum Remotely Establishing Local Presence Q&A
  33. 33. “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 Establish US Operations?
  34. 34. 9 Best Practices 1. CEO/Founder in US, 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)
  35. 35. Do Your Research
  36. 36. Challenges of Israeli Startups Fundraising in the US? Creating Momentum Remotely Establishing Local Presence Q&A
  37. 37. Thank You gil@upwestlabs.com

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