This document outlines strategies for Israeli startups to access the US market. It discusses the challenges Israeli startups face, including understanding US market needs, gaining early momentum, and cultural differences. It emphasizes the importance of generating momentum remotely through initial setup visits and follow ups to build relationships. Other topics covered include best practices for establishing a local US presence, such as having founders split time between Israel and the US, and fundraising in the US through leveraging local networks and moving operations partially or fully to the US before raising large rounds. The document stresses aiming high with ambitions and focusing on opportunities for large exits in order to attract top US investors and funds.

1. Strategies for Accessing
the US Market
December 13, 2015Google Campus, Tel Aviv
Gil Ben-Artzy
Partner, UpWest Labs

2. Work
Life
Edu

3. CheckPoint team
Product demo
No customers
4 Fortune 500
customers
SV-based Advisors
Raised $3M
Many Fortune
500 customers
50+ employees
Raised +$37M
Israel-based
product
No market
segment focus
Clear strategy and
market focus
Raised $2M, inc.
Twitter founders
Large customer
base in CA, NYC
60+ employees
Raised +$35M
UWL Investment + 6 months + 2.5 years

4. Topics
Challenges of Israeli Startups
Creating Momentum Remotely
Establishing Local Presence
Fundraising in the US
Q&A

5. Challenges of Israeli Startups
• Understanding market needs, customer validation
• Gaining momentum
- Early adopters, distribution and partners
• Accessing value-add investors
• Cultural Differences
- Relationships

6. When Do They Do Well?
1. They generated significant momentum
2. They have presence in US

7. Topics
Challenges of Israeli Startups
Creating Momentum Remotely
Establishing Local Presence
Fundraising in the US
Q&A

8. “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”

9. Set-up Visit Follow-Up
Planning
Ahead
What
To Do
Ensuring
Continuation
Creating Momentum

10. 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)

11. The Visit
Know 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!

12. The Follow-Up
Track & Summarize
Send Personalized Messages (recap, give back)
Ensure Momentum (action items, updates)
Plan Your Next Trip (In person > Skype)

13. Summary
Make the US Part of Your Routine
Focus on Creating Momentum
Plan Ahead, Ask for Help

14. Topics
Challenges of Israeli Startups
Creating Momentum Remotely
Establishing Local Presence
Fundraising in the US
Q&A

15. “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 Set Up US Operations?

16. 9 Best Practices
1. CEO/Founder in US, Co-founder in Israel
2. Product/Engineering Alignment
3. Constant flying
How
When
What
4. STSSTIAP  Early Product
5. Don’t Wait for Funding
6. Don’t Wait to complete Pilot in Israel
7.Get out of the building
8.Hire US employees
9.Prioritize PR (when ready)

17. Do Your Research

18. Topics
Challenges of Israeli Startups
Creating Momentum Remotely
Establishing Local Presence
Fundraising in the US
Q&A

19. VC
… and one day someone you don’t
know drops by…
Would you invest in someone…
… you have never met before
… whom you have no context about
… and whom lives thousands of KM away*?
*Amazing traction? Unique tech? Strong reference?
You meet with hundreds of
startups from your network…
Imagine You Are an Israeli Investor…
81
49
F-16
ZellTalpiot
TechnionGoogle
8200

20. If You Are Raising In Silicon Valley….
No “2-week funding roadshows”
Get local proof: customers, advisory board, etc
Learn from Israeli entrepreneurs (R&D in Israel, etc)
Ask for help, leverage friendly intros
Move before the round (50%+ can work too)
Early Stage Investing is a Local Business

21. The Most Important Thing
to Know When Raising Capital

22. Let’s Take a Step Back…

23. Pension Funds, University Endowments, Wealthy
Families, Corporations, etc
Bonds,
Stocks, etc
VC
Capital Allocation to Venture Capital = 3-10%
Who Invests in VCs?

24. Top 20 VC Funds
Other VC Funds
<1x
1-2x
2-3x
>3x
VC ReturnsVC Funds
98% 95%
2%
5%
Do VCs Meet Investor Expectations?
50%
33%
10%
7%
VC ReturnsVC Funds

25. Fund
Fund Economics
Returns Exits
$1B
$3B
$15B
3X
20%
Equity
* Few Investments per Partner

26. How Do The Best VCs Reach 3x?
Option A Option B
Exit 1
Exit 2
Exit 3
Exit 4
Exit 5
Exit 1
Exit 2
Exit 3
Imagine you made 30 investments….
Returns = $3B Returns = $3B

27. Implications
* VC could agree to smaller exits if you are not going to
be big as they had hoped, IRR & fundraising
considerations, founding team really insist, etc
Startup
“I need to show
potential for $50M
in Revenues in Year 5
(or >100M users)”
VC Partner
“Should I bet part of
my career on this
startup?”

28. Goal: Investing In The Winners

29. VC Economics Impacts All Investors
Large Funds Micro-Funds Angel Investors
“I need
large exits”
“Small exits
are unlikely…
Need micro-funds
to invest in my
startups”
“Medium-size exits
are unlikely…
Need large funds
to invest in my
startups”

30. In Short: Aim High
No, Really: Aim High!

31. Top 5 Mistakes Israeli
Entrepreneurs Make
5 - Not knowing your story or market
4 - Badmouthing/dismissing the competition
3 - “Mr/Miss-know-it-all”
1 (Tie) - Overly transactional/Valuation-focused
1 (Tie) - Not being positive and upbeat

32. Topics
Challenges of Israeli Startups
Creating Momentum Remotely
Establishing Local Presence
Fundraising in the US
Q&A

33. Thank Yougil@upwestlabs.com