According to statistics, over 60% of all successful startups in the US were created by foreigners. Every year, thousands of the smartest people from all over the world come to the United States to try their luck and start their businesses. However, this is exactly as in the case of the legendary Gold Rush in the USA in the 19th century, when thousands came, and fortune smiled at dozens. So, let us talk about the main mistakes of novice startups in the USA.
1. Registration of a corporation outside of Delaware or registration of a Limited Liability Company. The vast majority of investors require a startup to be registered as a C Corporation in Delaware. Therefore, if a startup has to re-register, it takes time and can be very expensive.
2. Misunderstanding of the mentality of Americans. The fact is that many foreign startups, for some reason, believe that they have a brilliant startup, and therefore, investors must immediately invest in them. The main word in the relationship between investors and startups is trust. When investing in start-ups at the initial stage, US investors consider the quality of the team to be the main criterion, that is, they invest in people, not in an idea. Hence, the most important characteristics of founders are perseverance, resilience, and resourcefulness.
3. Inability to make a pitch presentation to the investor. All founders of startups, for whom English is not their native language, need to pay more attention to honing all kinds of presentations for potential investors. There are a large number of people in Silicon Valley for whom English is not their first language. However, this does not prevent them from being successful. Do not be afraid of speaking with an accent. The main thing is that you are understood and, of course, that you understand what you are being told.
A large number of startups do not know how to clearly explain in a couple of sentences how their startup can solve their potential clients` problems. Thus, if a founder fails to explain in 30 seconds the main goal of their startup, they will fail to get money. It is important to remember that the listener of your pitch has no info about your potential business. Accordingly, you need to use the simplest words in your speech.
Consequently, it is imperative to start practicing your pitch before you begin talking to real investors. Remember that the first impression is the most important. If you failed to convince the investor of the attractiveness of your project at the first meeting, they will no longer listen to you.
Therefore, it is best for aspiring startups to draw up a detailed plan in advance of how they are going to achieve their goals. Don’t waste time talking to people who aren’t your target audience but who have time to talk about everything. Life in Silicon Valley is quite expensive. Hence, every day spent there will delay the achievement of the intended goal and hit your pocket.