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The Challenges of Global Entrepreneurship
Rick Rasmussen
January 2013
Lisboa
Regional vs. Global
Startup Genome Rankings
Ecosystem Metrics
Funding Per Stage
Funding Sources
Actual Stage Distribution
Job Creation
Revenue Streams
Type of Startup
Type of Market
Primary Payer
Global Distribution
• 6 cities from US, all in top 10
• 3 cities from Canada
9 total from North America
• 5 cities in Europe including Tel Aviv and Moscow
• 2 in Asia – India and Singapore. Not China.
• 2 in Australia
• 2 in Latin America
Lessons extracted
• All ecosystems are different
• Measurement allows identification of
strengths and weaknesses
• Ecosystems can be improved through
community involvement
Challenges operating on a global
stage • You’re competing with other ecosystems
• Limited resources within your own country – Customers
– Strategic Partnerships
– Service Providers
– Funding
• Local market is much different than global markets
• Entering a new market is just like doing a brand new startup..!
When to think international
• Some businesses (i.e. Internet sites) start with a global reach that just needs to be exploited
• Once you have made a market entry – Product developed
– First customers realized
– Developed initial traction
• Have adequate resources to keep local market and consider expansion
Adjacent Territories vs. Overseas
• If you have similar language or culture
• If territory is underserved
• If you have a product that requires onsite delivery or service
• If barriers to entry (customs, legal) are low
• If there are similar demographics or customer tastes
• Largest potential market at this stage
How to expand
• Expansion into a new geography is just like doing a brand new startup
• Lots of research – Customer needs (discovery, validation)
– Competitive landscape
– Steve Blank: Startup Owners Manual
• Do full financials, identify funding needs
• Develop full launch strategy and tactics plan
• Go!
Silicon Valley
Not how it really works…
Reverse outsourcing
• Headquarters
• Engineering and Operations
• Large employment base
• Subsidiary
• Management, Business Development
• Possibility of funding
Funding foreign companies in US
• 20 mile rule
• Expats are your best bet
• VC relationships and syndication
The odds are against you
Per month Per year
60 new deals 720 companies
8 for pre-screen 3 make it to dinner meeting
36 companies
Maybe one new investment
8 per year
Approximately 1.1% funding rate
Anatomy of a VC
Money In $
Money Out
$$$$$
What’s in it for me?
Risk Factors
Risk Factors
• What might stop me from an exit? – Team risks
– Market risks
– Competitive risks
– Technology risks
– Potential IP / Patent claims
– Legal (incorporation, stock claim) risks
• This is what due diligence is all about – Start to finish can take 3 to 6 months 34
• VCs rarely take cold calls
• Best sources: • Other VCs • Attorneys, Advisors • Other entrepreneurs in
their portfolio
• Pitching contests: good for practice but not for leads
Get Introduced
Bay Area
Accelerators and Incubators • Large Scale Accelerators
– nestGSV Redwood City
– RocketSpace SF
– Plug & Play Sunnyvale
• Incubators – Y Combinator Mt View
– 500 Starupts Mt View
– Angel Pad SF
• Universities – SkyDeck Berkeley
– StartX Stanford
– US MAC San Jose State
• Small Scale Accelerators – DogPatch Labs SF
– I/O Ventures SF
– BlackBox Atherton
• Co-Working Space – Citizen Space SF, San Jose
– Sandbox Suites SF
– Ground Floor San Jose
– PariSOMA SF
• Corporates – AT&T Palo Alto
– Citrix Palo Alto
– Sprint Burlingame
– Vodafone Redwood Shores
• Governments (Stand Alone) – Denmark Palo Alto
– Norway Palo Alto
• Specialized – RockHealth SF
– San Jose Bio Center San Jose
nestGSV
• 40% international tenants
• Access to full community
• Active connections through nestGSV’s network – Customers
– Partners
– Service Providers
– Funding
• Education
• Exposure to Silicon Valley and its culture – Events, meetups, hackathons, pitching
contests, more
Silicon Valley Culture
• Share
• Trust
• Network
• Give back
• Get out of the building
Thank You…!
Questions?
