On recent business trips to Silicon Valley, we have startup lessons learned with some investors, lawyers and other advisers who are active in the start-up society. These agreements have produced some very exciting lessons for Australian startup, especially those attempting to extend into the US market or catch on US investors. Here are the relevant highlights:
1. Follow what investors are looking for.
The US market is awash with resources, but you need to have a good story to get a piece of it. Silicon Valley investors will instantly get to the heart of any possible risks linked with your company model, so be ready for some pointed questions about startup lessons learned! On a pitch night you are likely to go home empty-handed if you do not:
– Recognize who your global opponents are
– Understand the governing environment in each of your native market.
Silicon Valley investors will almost absolutely want to figure out about your development plans in the US – and if you do not have any, they are likely to pass. If they do invest and want an instructive board seat, they will want to be close to you (and you should define this as you moving to the US, not them moving to Australia!).
2. Understand your market.
Silicon Valley investors and experts see many pitches – containing many from firms similar to yours. You may have been fighting hard on your unique addition for many months or years, only to discover that someone else is doing it too. Attending industry appointments and connections with investors will help you to inquire if your offering is different.
3. Check your company name, trademark and domain.
If you are keen on using your Australian company name in the US (or any other country), you will need to check that the name and domain name is available in that country. We also recommend doing some trademark searches so you can define the warning of trespassing someone else’s rights through the use of a special name. You should be doing all of this in the first stages of an abroad trip so that you do not have to change your name after producing all your collateral.
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4. Be able to “Pivot.”
While you need to be rebounding in the face of reversals, you also need to be adaptable. “Pivoting” a start-up company is general, and many head US businesses began life using a complex business rule. Slack (a team messaging app which is revolutionizing the way millions of people interact in the workplace) formed out of base made from a failed gaming app, and last year became the quickest start-up in history to reach a $US2 billion judgment.
5. Use your legal adviser wisely
Good counsel in Silicon Valley see many startup lessons learned and will only take you on if they think your company model has parts. They will have template reports, which mean small-scale industry raising can do comparatively cost-effectively, and they will also have the great network of investors and other contacts who may be able to support you. They also have broad knowledge in matters relevant to start-ups – for example, knowing the conditions of start-up investors and precepts about operating interns. Your start-up may be facing a particular problem for the first time, but retain that a suitable lawyer has apparently viewed it many times before.
6. Get Your IP Sorted
Investors and Venture Capitalists are savvy. They recognize that the intellectual property of a company they want to spend in is often its most valuable asset. This is why you must assure that you own all the IP rights in your ideas and outcomes and get control organized accurately from the beginning.
One of the most commonly held misconceptions about IP law is the notion that if you pay for something to be improved, you automatically own it. You may not! Don’t slip into this trap. Also, be cautious how you permit third parties to use your IP, particularly when giving someone an exclusive license.
As you proceed along the path of starting up startup lessons learned, you will no doubt make some errors along the way. However, by soliciting useful information early and studying from others, you will improve to set your business on the right way to victory.