If you are a startup founder from outside the US, you might think that Silicon Valley is a mecca for entrepreneurs.
Well, it is.
It’s where most of the world’s unicorns found enough money (and market) to grow their horns, and where 25% of the world’s investors bring their funds.
And it’s not just US investors funding US companies. And not just US investors funding international companies. Because of the synergy and infrastructure Silicon Valley has developed, this is where investors and founders from a foreign country meet each other to make a deal (i.e. French investors meeting French founders, etc).
We know that for a fact because that’s the story behind HACK Temple, and dozens of other VCs and founders we met here since we moved to San Francisco.
Before we dive right in, download our Startup Checklist to make sure you cover all bases before making a trip to Silicon Valley.
Why come to Silicon Valley
Silicon Valley is the biggest marketplace for innovations in the world. It attracts the best of the best in every field across the world and acts as a filter and facilitator for deals.
If you’re not here, you’re not good enough
The strongest investors come here to meet the strongest entrepreneurs, and vice versa.
Silicon Valley is the Olympics of startups, and if you’re not here, you’re simply not good enough.
Think about it from the investor’s point of view: if you’re so smart and innovative, why are you not in the Valley? This is where the best of the best meet up.
This doesn’t mean you need to move to the Valley permanently. All we’re saying is you need to build a presence here. Come for a short trip and get to know the best of the best in your field. Push a little harder, and you’ll meet strategic partners and even clients. You’ll start generating some buzz.
A short trip like that will push your company to a level that would have taken you a year or two to reach at home.
And as a nice bonus, it might change the trajectory of your company (and life) forever.
Not multiplying risks
Here’s one thing you should know about investors: they don’t like to multiply risks.
The are two big risks in venture capital:
- Risk of new product
- Risk of new market
When you combine the two, the risk can quickly become too big when weighted with the reward — the exit.
For example, if you have an innovative product, you should take it to an established market.
And if you have an established product, you should take it to a new market.
So from investors’ point of view, if you take your groundbreaking product to a new (developing) market, their value for money is square root of one (i.e. they are getting less value for the product than if it was in the US).
So for all you global innovators out there — bring your product to the US. It’s the world’s largest and most developed market, which makes it an ideal place to launch and grow your revolutionary disruptions.
Mentors and advisors
Although it’s true that the majority of VC funding happens in Silicon Valley, fundraising shouldn’t be your primary reason for making a trip here.
The real gold of this place is the willingness of and easy access to the world’s best business advisors and mentors.
While there are mentorship opportunities in other startup hubs like Berlin and London, Silicon Valley mentors are still some of the most experienced and knowledgeable in the world (let’s call that factor “X”).
They are also most open to sharing their experiences and investing their time (factor “Y”).
When you multiply X and Y, you get a mentorship culture that’s years ahead of any other place in the world. To use this culture in order to advance your company, you need to physically be present here.
In the Valley, it’s absolutely normal to reach out to busy executives or investors over cold email or LinkedIn message (Elizabeth Yin of 500 Startups says she treats referrals and cold emails the same) — of course many others are doing it, too, so you have to stand out.
Here’s a story of Emil Eifrem, who came to Silicon Valley from Sweden to find seed capital to fund his startup.
Shortly after opening his company office in San Mateo, Emil chased down Rod Johnson, then an Senior Vice President at VMware. He was a very successful entrepreneur and a leader in open source. Emil asked him for advice, and soon they began to talk regularly. Today, Rod is the chairman of Emil’s board, an investor and one of his closest advisors.
The open culture of Silicon Valley makes leaders like Rod very accessible, and their willingness to share advice is unlikely to happen at the same scale anywhere in the world.
Many will say that you can build a world-changing organization anywhere, which is true.
However, it’s much easier to do so in your industry’s center of gravity. For fashion, it’s Paris. For finance, it’s London. For movies, it’s LA. For tech, it’s Silicon Valley.
If you move here just for three months, you’ll grow as much as you would have in a year at home.
You’ll rub shoulders with some of the best brains in the world and get exposed to innovative company processes. You’ll land meetings with potential partners and investors, and you’ll notice that many of them will share insights more freely than you’d become accustomed to.
People build coffee chats into their work schedules, where they share what their companies are working on and what investors care about, and you’ll be a part of those meetings. It will be overwhelming.
The final reason for coming to Silicon Valley is to visit the startup cemetery.
As a founder, you think your idea is unique (but hopefully you’re not one of those who thinks you don’t have any competitors). You might think there are a couple of companies that do something similar, because that’s all you read in TechCrunch.
It turns out, there’ve been twenty companies that do what you do. TechCrunch doesn’t write about them because they are dead or dying.
Investors know about them. Silicon Valley founders know about them. But not many people abroad know about them, which makes your space seem like a blue ocean.
It’s not. And it’s not a bad thing. You just need to learn how to stand out and not make those dead companies’ mistakes, and there is no better place to learn that than the Valley.
When to come
As mentioned, Silicon Valley is the Olympics of startups, so only come if you have traction or if you’re a serial entrepreneur (who has scars to show you’ve learned some tough lessons).
Silicon Valley is expensive, competitive and noisy, so it’s easy to get lost in the crowd and run out of money. You need to have a plan for how to use your time here most efficiently, and do a lot of prep work at home.
If you want help from someone who’d been through that, we’ve prepared a special checklist for you. Download it right here
There are lots of things you need to keep in mind, but the most important one is this:
Don’t come to Silicon Valley for funding. Come to quickly validate your ideas, find partners, clients, and mentors. Those are much more important for your business, and paradoxically, if you get those right, investments won’t take too long to come to you.
This is what we preach at HACKT, and it’s why we made our program, HACKT Mission, a business development bootcamp for startups.
Mission participants get matched with a US industry mentor who starts working with them while they’re still at home. The mentor helps our founders fine-tune their product-market fit for the US market and makes introductions to key people in their industry. By the time founders come to the Valley, they have dozens of meetings lined up, and know exactly what to do and which goals to pursue. HACKT team is with them all the way, providing additional introductions and helping with logistical questions about the Valley.
Seems like a dream? It’s not. To be considered for the Mission, schedule a business strategy call with us here.
Have questions about how to make your way to the Valley as a foreign founder? Let us know in the comments!