Startup Catalyst: transformation at its best (@catalyst_au)
I have only been in Silicon Valley/SF for the best part of a week, but with the pace that everything is happening here I feel like I have been here for a month!
I write this in one of the quick breaks that I have managed to squeeze into the Startup Catalyst (www.startupcatalyst.com.au) mission to Silicon Valley designed for current and future angel investors in the startup ecosystem. This mission is one of a number of Startup Catalyst missions including a youth mission, female founders, ecosystem leaders and agtech missions that are taking place throughout the year.
I can confidently say that this mission has been jam packed with an amazing mix of some of the leading venture capitalists, angel investors and advisors. Our fearless leaders Aaron Birkby (CEO) and Steve Baxter (mission leader) have carefully selected and sourced those that are both willing to help share their knowledge and can deliver the group the information that is both an amazing resource, but also mind blowing (check out the Accel company wall!) and transformational. Here is some small snippets of what I have heard/learnt whilst I’ve been here (and these tips apply equally to founders and investors):
- Invest in companies in the “Goldilocks Zone” (Jason Calacanis – jason can bootstrap their way to an MVP that’s in the market. If a founder can’t manage to convince their friends to build an MVP on the weekends, then they are not worth investing in!
- You can’t invest in/build a company based on a feature. If that is all your company is, you will eventually be crushed by the big players (this instagram or facebook ‘feature’).
- As an early stage angel, think about being a supporter/sounding board for the CEO/founder. It is a lonely place being the CEO in a startup. This is how you can add value rather than demanding a board position and trying to control the founder.
- A founder of an early stage startup shouldn’t be spending much time preparing board packs etc. Updates to investors should be regular (monthly/quarterly depending on who you talk to), but something basic that just comes from the daily information the founder has.
- Australian companies should be built to be global from day 1. Remember, if you want to raise money from a US investor you need to make it easy for them (ie. may need to be in the US). There are many companies in the Valley likely doing what you are doing. So any barriers to entry for US investors will turn them away and towards one of your US based competitors. They want to see clear product market fit, customers willing to pay for your product, capital efficient (don’t waste investors money on fancy offices and luxury items – remember – you are not Google yet!) and global scalability.
- One for the lawyers out there – founders should make sure they have a decent lawyer and get them to explain the docs and the terms they are signing up to. If you are signing up to a liquidation preference as part of an angel deal (which maybe you shouldn’t), then at least you should know what you are signing up to!
Anyway, that is it from me for know, but I would like to thank all the people we have met for their extreme generosity with the time they have taken out of their busy days and the insights and proprietary knowledge they have shared with us. Also to the Startup Catalyst team (Aaron, Steve, Ellie, Breanna) and the whole investor mission group!