How to grow a global startup in the USA
Dos and Don’t
Markus Wagner, 15th of Sept. 2015 CEO - i5growth Inc. (Palo Alto), Chairmen of Adv. Board - i5invest capital (Austria/Vienna)
2 | 02/05/2023
That‘s us
CEE Austria: M&A and later stage bridge or
secondary capital in CEE First money in investments in
CEE companies with US potential
Fundraising Corporate Development
Wanna join – Looking for M&A trainees!
USA (San Francisco/Palo Alto): US MARKET ENTRY / BUILDING
STRATEGIC PARTNERSHIPS European START-UPs European Later stage tech
companies Growth hacking, marketing US HR US Looking for an US cofounder?
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Portfolio OverviewM&A and “First money in” - investments
US vs. Europe
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MUCH MORE MONEY, MUCH BIGGER MARKET
BIP Austria 2014: US$ bln 437
6 | 02/05/2023
MUCH HIGHER VALUATIONS
02/05/2023
Factors that should be considered when talking about a bubble
Interest rates are basically 0%
Total tech investments incl. M&A close to
2000Rising pre-money
values
IPOs with negative Earnings
Rising tech salaries
We are in Europe (with still big global
potential)BUT: We need to improve the ecosystem and create serial entrepreneurs with international
exits
1
2
5
3
4
0200400600800
- 2,000.0 4,000.0 6,000.0 8,000.0
Tech investments
Number of DealsInvestments (USD in m)
2
4
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
020406080
100
The percentage of IPOs with nega-
tive earnings
3
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
020406080
100Pre-Money Valuations
Later RoundSecond RoundFirst Round
(USD in m)
5
2009 2010 2011 2012 2013 201486000880009000092000940009600098000
Software Engineer Base Salary
(USD)
Source: i5invest analysis, PwC, DJ VentureSource, Jay R. Ritter / Business Insider and Glassdoor / BI.
7 | 02/05/202305/02/2023
66%
Europe USA0.000.501.001.502.002.503.00
Enterprise Value / Sales - Jan 2015
Enterprise Value / Sales
How do capital markets look at Internet Companies?
Source: Capital IQ & i5invest Analysis
US-based companies trade at a 66% premium above their peers in Europe.Companies in the Anglo-Saxon Region trade at higher multiples in general.Does being in the US add value for
the sake of being in the US?
United Internet AG (DB:UTDI)
Yandex N.V. (NasdaqGS:YNDX
)
Telecity Group plc (LSE:TCY)
-
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
0.001.002.003.004.005.006.00
Top 3 "European"
Enterprise Value EV / Revenues
Inc. (
Nasda
qGS:G
OOGL)
Face
book
, Inc. (
Nasda
qGS:F
B)
eBay
Inc. (
Nasda
qGS:E
BAY) -
100,000.0 200,000.0 300,000.0
0.006.0012.0018.00
Top 3 American
Enterprise Value EV / Revenues
What are the big players and their valuations?
USD in bn
MUCH MORE & BIGGER COMPANIES
8 | 02/05/2023
Macro trend “Digital Globalization” • It never was that easy to go international• It never was that easy for GLOBAL COMPETION to steal
your customers locally
If you want to build an sustainable company, you need to go international.
If you want to go international (other than copy cat businesses and markets) – you need to go the US.
If you aren’t there, you are irrelevant = not successful
(ps.: definitely not the whole company needs to be there)
NO OTHER OPTION TO GO THERE
Why startups come the US:
1. Fundraising2. Doing Business
3. Selling the Company
Fundraising in the US?
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What are investors looking for?1. Amazing management team2. Sources of credibility & trust: known team-members,
angels, accelerators, …3. Huge market size 4. Right cap table5. HQ Office location: US / Silicon Valley / SF, Visa issues:
none 6. User traction, great growth7. Revenues - proof of revenue potential
Your competitor’s founder team most likely looks like:
…and raised US$ 5mln+ from Andressen Horowitz
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You will find great startups from all over the world there
Hundreds of accelerators, incubatorsTens of thousands of startupsThousands of founder teams of ex-googlers, facebook, NASA, Tesla, Microsoft, EA, …
So, what do Americans think about Austrian
tech companies?
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…first thought
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…second thought
You must not be an Austrian company, you need to be a company that is doing business in the US
Doing business in the US
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Doing business in the USStep 1: Testing the waters / product market fit / building knowledge / fact finding / inspiration
a) Go-Silicon Valley Program (WKO) 1-3 Monthb) Individual trip (i.e. conference as trigger) going there for 2-3
weeks
Step 2: Business Dev. Presence • Setup structure (subsidiary or HQ/flip, visa, tax, budget)• Building Business dev presence (exec, or someone you really
trust, otherwise you get screwed)• Make money, look for partnerships, do business, gather world
class expertise, learn new tricks, adopt strategic positioning• Tier 1 - Acclerator?
Step 3: Serious presence • Business dev, sales, key account, marketing,
product management, growth hacking
Fundraising and M&A- once you built business, traction and the network,
you can do it
Come prepared
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Where to go (go where the business is)NYC: Some finTech, ad Agencies, adTech, Media CompaniesLA: Agencies, Media Companies LASeattle: MicrosoftTexas: HW, Datacenters, Network (Houston, Austin)SF/Valley: finTech, adTech, deepTech, Space, bigData, travel, education, biotech, payment, wearable, analytics, pharma, medTech, HW, Datacenters, Apps, gaming, … global companies from all over the world
Young, single, party, b2c, apps (VC, accelerators)
Family, house/garden, Stanford, hardware, deep tech, b2b, b2c (VC, accelerators)
Older, family, house/garden, network, storage, semiconductor, hw, deep tech, b2b
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Come prepared 1/2 1. Create a great linkedin presence (premium)2. Create a great Angel.co presence 3. Create a great crunchbase presence 4. Choose a time of interesting industry events5. Look for the right place to work (bay vs. SF, …)6. Look out for interesting accelerator programs 7. Look out for experts, evangelists in your space, they
might become angels later8. Meet competitors, connect with peers 9. Meet former employees of competitors and potential
future team members10.Act as you always have been there11.Bring a unlocked phone, multiple credit cards (or check)12.Bring English business cards, pitch deck, train the pitch
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Come prepared 2/2 13.Watch silicon valley show:
http://www.hbo.com/silicon-valley#/14.Start-up Class from Y Combinator Sam Altman in
Stanford: http://startupclass.samaltman.com/ 15.Reading Advice:
http://www.amazon.com/Zero-One-Notes-Startups-Future/dp/0804139296
16.Start to read techcrunch frequently 17.Watch great company pitches on youtube, i.e.
TechCrunch Disrupt18.Learn about growth hacking: #500Distro
https://www.youtube.com/user/500startups 19.Look for the right meetups (www.meetup.com) 20.Go Silicon Valley - Austrian Pavilion GroupDROP ME A LINE - THANK YOU!
Wondering if its the right time for your startup to test US/global
waters?
Look for US co-founders?
Want join a global M&A and business dev team?
Planning a trip to the valley?
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