\u201cVCs in the US know the market inside out,\u201d says Kayserian. \u201cI\u2019ve been in a pitch where the start-up pitched an idea and the VC said the idea had been done and asked \u2018Why are you re-pitching this business\u2019 idea to me?\u2019<\/p>\n
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\u201cThe start-up said \u2018No, we are different because of this\u2019 and the VC said \u2018No, I know you\u2019re not because I invested in them myself.\u2019 The guy just sunk back in his seat.\u201d<\/p>\n
<\/p>\n
\u201cYou need to do your homework. Also, there\u2019s a bit of stigma here about social media as a lot of VCs have been burnt by it. They know what they are looking for.\u201d<\/p>\n
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What’s your market?<\/strong><\/p>\n <\/p>\n 99Designs\u2019 Harbottle says the best VCs will go out of their way to help you even if you\u2019re in the lucky enough position to be able to turn them down in favour of better offers. But he adds it\u2019s vital that you focus on what your market is.<\/p>\n <\/p>\n \u201cIn Australia, we tend to focus on the product and getting that right,\u201d he says. \u201cIn the US, it\u2019s very much customer and marketing driven. In Australia, we rarely ask who our customer is. If you can\u2019t work out who your customer and your market is, you shouldn\u2019t be in business.\u201d<\/p>\n <\/p>\n Ditching the boardroom<\/strong><\/p>\n <\/p>\n Keyserian adds that the culture of doing business in the US is something that Australians have to adapt to.<\/p>\n <\/p>\n \u201cIn Australia, you meet in a boardroom, but they work all hours in New York so you have to be prepared to meet anywhere,\u201d he says. \u201cThey mix fun with work, so I\u2019ve met a VC for a pitch while walking in Central Park. I\u2019ve had meetings at restaurants and rooftop parties. You have to be prepared to get out of your comfort zone.\u201d<\/p>\n <\/p>\n He has a final word of warning for those keen to jump on the first LA or New York-bound flight.<\/p>\n <\/p>\n \u201cYou should dream big, but go lean,\u201d he advises. \u201cAs much as it sounds romantic to get $5 million in seed funding, the implications are losing control of your business. Look to friends and family first.\u201d<\/p>\n <\/p>\n \u201cAvoid going for the romantic dollar or you could end up working for someone else who sets you lots of KPIs \u2013 which is what you started up a business to avoid in the first place.\u201d<\/p>\n <\/p>\n Sidney Minassian, founder and CEO of GrowthQ, a US-based start-up and venture advisory firm, has five top tips to getting a US investor on board:<\/p>\n <\/p>\n <\/p>\n \u201cThe company in which you want to take investment most likely needs to be a US Inc and needs to be the parent.\u201d<\/p>\n <\/p>\n \u201cWhile the IP does not have to move (immediately), the US Inc must be the parent and ultimate holder of the IP. Creating your corporate structure can be simple or complicated depending on your circumstances.\u201d<\/p>\n <\/p>\n \u201cIn my personal case I had already created value in my Australian company (I had IP and revenue) and had taken angel investment in Australia.\u201d<\/p>\n <\/p>\n \u201cSo there are legal, tax and IP consequences that need to be addressed. I suggest companies do their homework, understand what needs to happen, how long it will take and what it will cost. Then be ready to address this head on with your prospective investors.\u201d<\/p>\n <\/p>\n <\/p>\n The founders and management team most likely need to be based in the US. Having the software development teams outside of the US or additional sales offices outside of the US is okay.<\/p>\n <\/p>\n \u201cHowever it makes it easier for board meetings, business development, follow-on funding and ultimate exit if the investors and company management are in the same location.\u201d<\/p>\n <\/p>\n \u201cI suggest founders need to be prepared to make this transition and don’t forget if you have a spouse or children you need to think about how to on-board\/transition them.<\/p>\n <\/p>\n <\/p>\n \u201cWhile many investors say they accept ‘cold’ calls or emails, the reality is that venture investment is very much a ‘people’ investment business. Getting a warm introduction will always get a better response.\u201d<\/p>\n <\/p>\n \u201cIn fact, I know some VCs who believe that if an entrepreneur can’t even find a way to get a warm introduction into to them, then they’re probably not a good bet anyway.\u201d<\/p>\n \u201cThere are a bunch of networking events, industry groups and government support initiatives for helping Australians get connected.\u201d<\/p>\n <\/p>\n \u201cOne other strategy (that’s also good for your business in general) is to appoint a US based board of advisors who are connected and experienced in the venture space.\u201d<\/p>\n <\/p>\n <\/p>\n \u201cIt’s all about creating credibility early on. It\u2019s highly unlikely that you have a degree from a top US university or that you have a US brand-name paying customer.\u201d<\/p>\n <\/p>\n \u201cSo you need to make sure your story is one that investors can quickly relate to and your achievements are not lost or undervalued in the translation.\u201d<\/p>\n <\/p>\n \u201cFor example, Commonwealth Bank and Macquarie Bank were both paying customers of one of my previous Australian tech start-ups and while recognised by any Australian, the average US investor has not heard of these guys. So coming to the US, I was coached by my mentors to position CBA as the Wells Fargo equivalent and Macquarie Bank as the Goldman Sacs equivalent.<\/p>\n <\/p>\n <\/p>\n \u201cThe average US investor hears a lot more pitches and has more deal-flow than Australian investors. So their bar is higher, their patience is shorter and they have many other investment options \u2013 so you need to make sure your communication does not fall short.\u201d<\/p>\n <\/p>\n \u201cTake the time to practice and constantly refine your pitch. Be prepared to be interrupted during your pitch and have the confidence to steer the meeting back to you agenda.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" \u201cVCs in the US know the market inside out,\u201d says Kayserian. \u201cI\u2019ve been in a pitch where the start-up pitched<\/p>\n","protected":false},"author":2,"featured_media":60133,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,20,13,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/42793"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=42793"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/42793\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/60133"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=42793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=42793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=42793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Top tips<\/h2>\n
<\/b><\/p>\n1. Create a US parent company to take in the investment<\/h2>\n
2. Be prepared to relocate to the US<\/h2>\n
3. Get warm introductions to investors<\/h2>\n
4. Create a story they can relate to.<\/h2>\n
5. Prepare to pitch to US investors – it\u2019s different from pitching to Australians<\/h2>\n
<\/h2>\n