How to prepare a project if your goal is Silicon Valley

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Nobody can guarantee success. But these tips will greatly improve your chances of attracting American investors.

Silicon Valley is a cult place that gave rise to companies such as Apple, Facebook, Hewlett-Packard, Tesla Motors. The valley is the ceiling of any startup, the cherished dream of everyone who intends to make money on IT and innovations.

Thousands rush to Silicon Valley, hundreds fall, and only a few succeed there.

Everyone who comes to the Valley wants a quick start that will give life to their idea and provide funds for the implementation of the project. But many people leave with nothing, spending money and not receiving even a tiny amount of funding.

How to correctly present a project and what else you need to know - we'll talk about this.

How to correctly present a project to investors

The chances of any project are increased by its correct presentation, a kind of "packaging" for the investor.

1. Study the requirements of investors

Study in detail all the requirements that apply to the projects. Be careful about creating the presentation and other materials that the investor asks for. The peculiarity of investments in the Valley is the focus on a really large and extremely innovative project that can change the world.

Try to focus on scalability. The average market size for a project to enter is at least $ 50 million. A rare investor in the Valley will pay attention to projects without ambitions to conquer large markets.

2. Prepare documents, videos and personal story

The first documents to be examined will be the Executive Summary, or Slide Deck (that is, the project summary). Presentations, White Paper, which contains all important information about the project, and other materials related to a particular technological solution may be requested. If this is not a seed round (the first round of attracting investment), investors will probably want to see a prototype of a program or device - something that corresponds to the current stage of development.

It will not be superfluous to segment the market and provide its results to a potential investor, even if it is not in the required documentation.

It is also helpful to pre-record a teaser for the project for YouTube. You shouldn't invest astronomical sums in it, but it should be decent and not cause rejection. You should also pay close attention to your social networks - carefully review them for anything that can cast a shadow on you or characterize you in front of an investor as an unreliable partner (especially important communication channels are Facebook and LinkedIn).

3. Pump up your English

Fluency in English will be a huge plus. The minimum level required to communicate in the Valley is Advanced. Ideal if you or someone else from the co-founders speaks English as a native speaker.

If the level of knowledge of the language in your team is not higher than Upper Intermediate, then you have nothing to do in the Valley.

Treat overcoming the language barrier as a project preparation stage. Without a language, no one needs you or your project. Interpreters in the Valley are fabulously expensive, so it's cheaper to spend a year trying to improve your language.

4. Create a team

In the Valley, they don't invest in an idea, project or technology, they invest in people. That is why, in addition to perfectly prepared documentation, it is important to present the team. Sometimes investors have requirements regarding the number of founders.

A brilliant loner is almost always doomed to failure.

There should be no weak links in the team, as everyone will be evaluated. Moreover, projects from the United States always have an advantage, so the competence of any foreign team must be clearly higher. Otherwise, the project has no chance.

5. Learn the terminology

You need to speak the same language with the investor and clearly understand what he wants from the project. Terms such as IRR (Internal Rate of Return), ROI (Return on Investment), NPV (Net Present Income) will be extremely important, and they like to ask about them in meetings. It is natural that an incorrect or inaccurate answer can seriously damage your reputation or completely nullify your chances.

6. Conduct reconnaissance

Try to find out in advance how many similar projects are looking for investment. In other words, find people who can tell you how things really are. Try not to rely on the opinion of one person, look for several and, preferably, unrelated to each other.

7. Ignore information for the general public

It is often incomplete and sometimes not reliable. It would be ideal to create your own network of useful contacts, informants who can provide you with reliable information.

In doing so, try to ignore the services of the so-called consultants and experts who appear from the stage. These speakers always speak convincingly, but rarely do their words fully correspond to reality and carry real weight. Try to listen to those who work.

What else is important to understand

1. There is no quick money in the Valley

I recommend that you forget about the quick conquest of the Valley and instant money. There were a lot of such attempts here, but no one succeeded in a swoop - too experienced investors, mentors, competent experts. There are people who come to raise money for a project in 2-3 months, with the support of a business angel, and leave with $ 50,000 in seed investment. Such tricks do not work in the Valley, and lovers of quick money leave with nothing. The fact is that such projects are immediately visible, they do not withstand examination and are instantly eliminated.

2. Personal presence is important

To really finance the project, it is important to be physically in the Valley, to talk with people, to thoroughly study the business requirements for the project. Often, investors and experts have to chew all the details in detail, even several times.

It will be a plus if there is not only one founder in the Valley, but the whole team (or the most significant part of it), so that the investor can personally assess the competencies of each. Many investors do not like it when the team immediately after receiving the money goes to outsourcing and it is impossible to check how and what it is doing.

3. Have to learn again

Be prepared for this. We can say that the young and inexperienced have more chances, since learning from scratch is easier than retraining. This applies to doing business, communicating with clients, finding investors, negotiations, team management.

It is necessary to understand that in the USA and Russia there are completely different values, habits, the structure of the IT market and ideas about IT products differ. Everything is different there, and approaches that are acceptable in Russia may be completely unacceptable in the United States.

It is only natural that in the US there may be other requirements for products, their functions, or simply for positioning. A huge difference in mentality leaves an imprint on everything, up to the perception of colors, design, user interface. Thus, you will have to re-learn almost everything that is necessary for the successful implementation of the project.

4. Your standard of living will drop

If you are not very rich, then you will probably have to remember your student days and temporarily forget about comfort. Renting a house costs a lot of money, at least $ 2,000 a month for a studio with little or no amenities and in the poorest neighborhood. The amount of time you will spend on the project will also be enormous. I won't be mistaken if I say that you will be working almost 24/7. You will have to forget about your personal life, rest and entertainment.

If you are not afraid of all of the above, then you can try your luck in Silicon Valley. With the right level of competence, a good idea and a good set of circumstances, you may be able to develop and adapt your project.