5 things to consider before taking your startup to Silicon Valley

Lots of European founders think that Silicon Valley is still the place to be when it comes to tech startups. But how to get there, and what can you expect?

Here’s the story of Fabrizio Capobianco, as he told it on Quora. Capobianco is an Italian entrepreneur and founder of Funambol (white-label personal cloud solutions for mobile operators), who made the jump to California:

“We founded the company in Italy (three people), we built a developer center in Italy and I moved to Silicon Valley when we were four people (I was the CEO).

Since then, I raised $30M from VCs and built a company with 5 million of users and the largest open source project in wireless. The company has HQ in Silicon Valley (Sales, BD, Marketing, Product Management and Operations) and R&D is in Italy (45 people, including two of the founders, one is the CTO).

Why Silicon Valley (or Boston or NY, but since you are moving so far away, why not picking the best place in the world for a startup)?

Well: funding, people, partners, exits. They are all here. You need cash to start, you need to hire people with experience in this game, you need partners to build and scale (and more cash), then an exit to top it off. This is the place to be. Facebook moved here, why should you not do it?

Why Europe? Well, it is a great place to develop things. I mean software. The amount of top notch technology I routinely find in Italy is astonishing. And the cost of developing there is much less than in Silicon Valley. When it comes to scale a company, cash is hard to find (although there is).

When it comes to hire people that have done it already what you dream to do (VP BD, VP Sales, VP Marketing, VP Product Management, and so on), it is hard to find them in Europe. When it comes to partnering, have you noticed that Apple, Google, Facebook, Twitter, Yahoo and a million more are here in Silicon Valley? I am 20 minutes from the head of mobile at the 90% of high-tech startups (at least, all that count). When it comes to exits, M&A are not the same in Europe as here, not even close. However, when you look at technology talent (engineers), Europe is not second to any other place in the world.

Things to consider:

1. Ship your CEO here. Do not hire a VP BD or anyone else. If you want to relocate, the big guy must be here. If you do not have the right person, find him/her. Relocating does not mean opening a sales office. If you want to do that, it is a different story (but do not believe you will raise money here)

2. If you want to raise money in Silicon Valley (if you don’t, stay home…) you need a corporation here which owns 100% of the subsidiary in Europe. No exceptions (unless you have something incredible in your hands). The VCs will not invest in a European company. Therefore, you need to do the “flip”, e.g. establish a US corp (Delaware, usually), which buys the European one. Caveat: check with your tax attorney because this might be a taxable event

3. even if your VP Eng or CTO is in Europe, you need someone in the US in Product Management. We have VP Product Management here and I have been very happy about it (although it was hard to find the right person and it took me a couple of iterations). If VP Marketing is here and VP Sales is here, you need VP PM here (or the guys in Europe will build something different from what you have in mind ;-) We also have a senior PM in Europe, reporting to the US head. Find someone here who speaks the language – if possible – likes to wake up very very early and travel often….

4. Communication communication communication. It will be your #1 issue, one you are not going to solve. Weekly management calls, weekly company calls, make something up to have the team talk, use Skype and Webex as much as possible. Do not save money on this topic. If you have a company spread on two continents and it is a startup, it is going to be impossible to manage if people are not 100% in sync.

5. Talk to an immigration lawyer. There are many ways to move here and get a Visa, but if you do not consider this before leaving, you might end up in a lot of trouble. Do it as early as possible.”

[Quora, reused as per Quora TOS][Photo: Vox EFX, Flickr]

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About the author

Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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