How to grow a global startup in the USA

Dos and Don’t

Markus Wagner, 15th of Sept. 2015 CEO - i5growth Inc. (Palo Alto), Chairmen of Adv. Board - i5invest capital (Austria/Vienna)

2 | 02/05/2023

That‘s us

CEE Austria: M&A and later stage bridge or

secondary capital in CEE First money in investments in

CEE companies with US potential

Fundraising Corporate Development

Wanna join – Looking for M&A trainees!

USA (San Francisco/Palo Alto): US MARKET ENTRY / BUILDING

STRATEGIC PARTNERSHIPS European START-UPs European Later stage tech

companies Growth hacking, marketing US HR US Looking for an US cofounder?

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Portfolio OverviewM&A and “First money in” - investments

US vs. Europe

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MUCH MORE MONEY, MUCH BIGGER MARKET

BIP Austria 2014: US$ bln 437

6 | 02/05/2023

MUCH HIGHER VALUATIONS

02/05/2023

Factors that should be considered when talking about a bubble

Interest rates are basically 0%

Total tech investments incl. M&A close to

2000Rising pre-money

values

IPOs with negative Earnings

Rising tech salaries

We are in Europe (with still big global

potential)BUT: We need to improve the ecosystem and create serial entrepreneurs with international

exits

1

2

5

3

4

0200400600800

- 2,000.0 4,000.0 6,000.0 8,000.0

Tech investments

Number of DealsInvestments (USD in m)

2

4

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

020406080

100

The percentage of IPOs with nega-

tive earnings

3

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

020406080

100Pre-Money Valuations

Later RoundSecond RoundFirst Round

(USD in m)

5

2009 2010 2011 2012 2013 201486000880009000092000940009600098000

Software Engineer Base Salary

(USD)

Source: i5invest analysis, PwC, DJ VentureSource, Jay R. Ritter / Business Insider and Glassdoor / BI.

7 | 02/05/202305/02/2023

66%

Europe USA0.000.501.001.502.002.503.00

Enterprise Value / Sales - Jan 2015

Enterprise Value / Sales

How do capital markets look at Internet Companies?

Source: Capital IQ & i5invest Analysis

US-based companies trade at a 66% premium above their peers in Europe.Companies in the Anglo-Saxon Region trade at higher multiples in general.Does being in the US add value for

the sake of being in the US?

United Internet AG (DB:UTDI)

Yandex N.V. (NasdaqGS:YNDX

)

Telecity Group plc (LSE:TCY)

-

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

0.001.002.003.004.005.006.00

Top 3 "European"

Enterprise Value EV / Revenues

Google

Inc. (

Nasda

qGS:G

OOGL)

Face

book

, Inc. (

Nasda

qGS:F

B)

eBay

Inc. (

Nasda

qGS:E

BAY) -

100,000.0 200,000.0 300,000.0

0.006.0012.0018.00

Top 3 American

Enterprise Value EV / Revenues

What are the big players and their valuations?

USD in bn

MUCH MORE & BIGGER COMPANIES

8 | 02/05/2023

Macro trend “Digital Globalization” • It never was that easy to go international• It never was that easy for GLOBAL COMPETION to steal

your customers locally

If you want to build an sustainable company, you need to go international.

If you want to go international (other than copy cat businesses and markets) – you need to go the US.

If you aren’t there, you are irrelevant = not successful

(ps.: definitely not the whole company needs to be there)

NO OTHER OPTION TO GO THERE

Why startups come the US:

1. Fundraising2. Doing Business

3. Selling the Company

Fundraising in the US?

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What are investors looking for?1. Amazing management team2. Sources of credibility & trust: known team-members,

angels, accelerators, …3. Huge market size 4. Right cap table5. HQ Office location: US / Silicon Valley / SF, Visa issues:

none 6. User traction, great growth7. Revenues - proof of revenue potential

Your competitor’s founder team most likely looks like:

…and raised US$ 5mln+ from Andressen Horowitz

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You will find great startups from all over the world there

Hundreds of accelerators, incubatorsTens of thousands of startupsThousands of founder teams of ex-googlers, facebook, NASA, Tesla, Microsoft, EA, …

So, what do Americans think about Austrian

tech companies?

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…first thought

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…second thought

You must not be an Austrian company, you need to be a company that is doing business in the US

Doing business in the US

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Doing business in the USStep 1: Testing the waters / product market fit / building knowledge / fact finding / inspiration

a) Go-Silicon Valley Program (WKO) 1-3 Monthb) Individual trip (i.e. conference as trigger) going there for 2-3

weeks

Step 2: Business Dev. Presence • Setup structure (subsidiary or HQ/flip, visa, tax, budget)• Building Business dev presence (exec, or someone you really

trust, otherwise you get screwed)• Make money, look for partnerships, do business, gather world

class expertise, learn new tricks, adopt strategic positioning• Tier 1 - Acclerator?

Step 3: Serious presence • Business dev, sales, key account, marketing,

product management, growth hacking

Fundraising and M&A- once you built business, traction and the network,

you can do it

Come prepared

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Where to go (go where the business is)NYC: Some finTech, ad Agencies, adTech, Media CompaniesLA: Agencies, Media Companies LASeattle: MicrosoftTexas: HW, Datacenters, Network (Houston, Austin)SF/Valley: finTech, adTech, deepTech, Space, bigData, travel, education, biotech, payment, wearable, analytics, pharma, medTech, HW, Datacenters, Apps, gaming, … global companies from all over the world

Young, single, party, b2c, apps (VC, accelerators)

Family, house/garden, Stanford, hardware, deep tech, b2b, b2c (VC, accelerators)

Older, family, house/garden, network, storage, semiconductor, hw, deep tech, b2b

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Come prepared 1/2 1. Create a great linkedin presence (premium)2. Create a great Angel.co presence 3. Create a great crunchbase presence 4. Choose a time of interesting industry events5. Look for the right place to work (bay vs. SF, …)6. Look out for interesting accelerator programs 7. Look out for experts, evangelists in your space, they

might become angels later8. Meet competitors, connect with peers 9. Meet former employees of competitors and potential

future team members10.Act as you always have been there11.Bring a unlocked phone, multiple credit cards (or check)12.Bring English business cards, pitch deck, train the pitch

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Come prepared 2/2 13.Watch silicon valley show:

http://www.hbo.com/silicon-valley#/14.Start-up Class from Y Combinator Sam Altman in

Stanford: http://startupclass.samaltman.com/ 15.Reading Advice:

http://www.amazon.com/Zero-One-Notes-Startups-Future/dp/0804139296

16.Start to read techcrunch frequently 17.Watch great company pitches on youtube, i.e.

TechCrunch Disrupt18.Learn about growth hacking: #500Distro

https://www.youtube.com/user/500startups 19.Look for the right meetups (www.meetup.com) 20.Go Silicon Valley - Austrian Pavilion GroupDROP ME A LINE - THANK YOU!

Wondering if its the right time for your startup to test US/global

waters?

Look for US co-founders?

Want join a global M&A and business dev team?

Planning a trip to the valley?