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Page 1: This Isn't HBO: Tried And True Ways To Succeed In Silicon Valley

SOSA, Tel Aviv July 15, 2014

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

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Life

Work

EDU

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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, etcDozens of Fortune 500 customers and partners

Largest community of entrepreneurs innovating between Israel and Silicon Valley

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Topics & Objectives

What is Silicon Valley All About?Prioritizing your time

Creating Momentum RemotelyEstablishing your “engagement model”

Establishing PresenceBeginning to weigh the options, best practices

FundraisingUnderstanding the process & differences from Israel

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Topics

What is Silicon Valley All About?Creating Momentum RemotelyEstablishing PresenceFundraising

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“It’s Easy to Raise Money!”

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“Look! A Unicorn!”

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After All, Numbers Don’t Lie

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32

Silicon Valley

New York

Israel

Venture Capital Investment in 2013 ($B)

“Unicorns” = >$1B (since 2003)

Silicon Valley

New York

Other

293

7

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8200 4981Talpiot

F-16

“We’re The Startup Nation”

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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…

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Yes, Investors Love Them

They spent lots of time on planes

They often have presence in US

They generated significant momentum

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But In Reality…(and apologies in Advance)

Nobody Cares

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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 tomake money?)

Create Momentum

UsersCustomersPartnersAdvisorsNew HiresInvestment CommitmentThought LeadershipPress…

Build a Business

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Silicon Valley: Reinforcing EcosystemEarly Adopters and Customers

Knowledge & Innovation

Multi-stage Capital

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Topics

What is Silicon Valley All About?Creating Momentum RemotelyEstablishing PresenceFundraising

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“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”

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Set-up Visit Follow-Up

Planning Ahead

What To Do

Ensuring Continuation

Creating Momentum

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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)

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The VisitKnow 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!

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The Follow-Up

Track & Summarize

Send Personalized Messages (recap, give back)

Ensure Momentum (action items, updates)

Plan Your Next Trip (In person > Skype)

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Summary

Make Silicon Valley Part of Your Routine

Focus on Creating Momentum

Plan Ahead, Ask for Help

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Topics

What is Silicon Valley All About?Creating Momentum RemotelyEstablishing PresenceFundraising

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“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?

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9 Best Practices

1. CEO/Founder in US, Co-founder in Israel2. Product/Engineering Alignment3. Constant flying

How

When

What

4. STSSTIAP Early Product5. Don’t Wait for Funding6. Don’t Wait to complete Pilot in Israel

7.Get out of the building8.Hire US employees9.Prioritize PR (when ready)

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Do Your Research

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Topics

What is Silicon Valley All About?Creating Momentum RemotelyEstablishing PresenceFundraising

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Before We Begin…

This is the REALLY short version

There are always exceptions

If | When | What | HowBold = SV-adjusted

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If

Aligning Incentives with the Investor

High Level of Commitment

Opportunity Cost

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Fund EconomicsHit Driven Business

Few Investments per Partner Betting Their Career

Example:

$500M Fund

$1.5B Returns

$7.5B Exits

3X20%

Equity

Mega-funds influence ecosystem (Angels, Accelerators)

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Investor Goal: Big-Ass Returns

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When

Time = Your Most Valuable AssetPlan to spend 3-4 months fundraising“I will move after the round…”Time of Year: Feb-June, Sept-NovYour “Shelf life”

Know Your Domain’s “Personality” (B2B, B2C, B2B2C)

Momentum: Lines Vs. Dots

Raise When You Can

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What

Round size = 2x larger

Valuations Differences

Enough for 12-18 Months

Cap Table Management

Milestone-based?

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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…

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Common Pitfalls: The Short ListNot 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