How to create a successful startup and move to Silicon Valley: tips from an investor
Serial entrepreneur and venture capital investor Vitaliy Golomb moved with his parents to the United States from Odessa at the age of 8. Already in adolescence, he began working in technology companies (Paragraph, HP), and in 2010-x engaged in venture capital investments. As managing director of the IEG banking group in California, Golomb knows firsthand how the venture capital market is located on both sides of the Atlantic. He invests in startups from Russia, Ukraine and other CIS countries in the seed stage, helps them move to Silicon Valley and get the investments they need to launch.
Golomb formed for himself the rules of life and work in the Valley, which he shared with the publication Inc.
The success in Silicon Valley does not come immediately and not to all
The valley is a community that resembles several vicious circles, and it is extremely difficult to get into the inner circle. Therefore, it is often too hard for a startup to move to San Francisco - you need a huge amount of money plus a year or two to be taken seriously. After all, at the stage of sowing investments there is still no product, no clients, there is only a team - and if I don’t know this team, what to invest in? Here the venture capital investor at the pre-seed stage can help.
When is it worth taking a business to the USA
You can go to the Valley when there is a working business and the prerequisites to bring the product to the global market. You can use your local market as a laboratory - to understand what problem the product solves, who the client is, whether users are ready to pay. And making sure that the product is in demand and makes a profit, go to the Valley - to push the pedal to the floor and scale the business on a global level. Many come to the Valley as tourists and try to raise money here - as a rule, it is unrealistic. Many travel with an immature business, transport a family, and the success of a startup becomes secondary for them - but this is not entirely fair and correct for investors.
How to form a team in the US
Any company that moves to the Valley from any other country needs a local CEO or a key team member. This is a factor in contacts and relationships: the success of networking and finding the right connections depends on it.
If you raise seed round - it is desirable, firstly, to postpone 60% of the raised amount to marketing experiments, secondly, to find people with experience who can get involved in the process and sell. There are no ready-made solutions: to be able to sell and communicate with people is just an experience.
What does an investor want from a startup?
Being the only investor in a startup is a big mistake. This means that the open market for one reason or another does not want to invest in this company.
As a rule, large venture capital funds from the Valley do not need to invest in foreign startups, but there are those who specialize in local markets. On the one hand, the Olympic Games of startups take place in the Valley - all the best come here. If I am an American venture fund, I sit on Sandhill road - why should I go somewhere, because the best will come here anyway. On the other hand, if I know the local market and see an undervalued company, it may be beneficial for me to help her move to the Valley (or move part of the team there, or raise a round there) - in return, I will get a share in this company cheaper than if I waited for them The valley.
Perception of immigrants from Russia in California
In California, there is no negative attitude or bias against immigrants from Russia - questions may arise except to those who are engaged in cybersecurity. There is great prestige among Russian engineers, engineering brains and technology. In the Valley, where half the population is immigrants, everyone understands that politics is a separate issue, more important are people with brains who create technology. If a Russian startup is engaged in cybersecurity in the United States, a potential investor will simply conduct a thorough due diligence - whether the company received money from the Russian government, whether it sends information to Russia, whether it is completely private and independent. This also applies to companies from China.
How to create the perfect startup
The perfect combination for an Eastern European startup is software development in Eastern Europe, manufacturing in China, and business and partnerships in San Francisco. Ukrainian company can combine these three points. Petcube, for example (the founder invested in it Almaz Capital Alexander Galitsky - Inc.): they have an engineering team and half the staff in Ukraine, 12 people at headquarters in the Federation Council and another 4 people in China.
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