ELIZABETH CLARK, CO-FOUNDER AND CEO OF AWARD-WINNING SHOPPING SPECIALISTS DREAM AGILITY, PUT FLOWERS IN HER HAIR AND HEADED TO THE WEST COAST OF THE UNITED STATES IN SEARCH OF GOLDEN PAYMENTS. BACK HOME, SHE REFLECTS ON HER TRIP AND OFFERS INVESTMENT TIPS FOR STATESIDE UK ENTREPRENEURS, WARNS OF THE PERILS OF FREE POURING AND HINTS AT THE UNEXPECTED JOYS OF BED SHARING WITH STRANGERS.
Like latter-day Dick Whittingtons, frustrated UK entrepreneurs look to the US and imagine streets paved with gold just waiting for those plucky enough to fly across the Atlantic and mine it. Tales of speedy deals and bulging chequebooks catch the attention of our tech entrepreneurs irked by the lack of movement from native angel- or EU-backed funds that focus on backing the next ‘low growth dead cert’ or avoid anything remotely disruptive. If you are cannibalising another business or have reinvented the wheel you will have the UK investment community beating a path to your door with a derisory offer. If you’ve got something seriously sexy up your sleeve you can struggle even to get arrested.
My ad tech company, DreamAgility.com, is extremely fortunate to have had over $1million investment from an exited UK tech entrepreneur and is now revenue positive. Indeed, when I joined a dozen-strong Tech North expedition to the West Coast of the US in early October 2016, I had absolutely no idea what a great position I was in to be pursuing funds to expand. After all, past efforts had proved so arduous.
There was a mix of early start ups and more mature businesses with multi-million pound turnovers and my fellow entrepreneurs ranged in age from mid-twenties to early fifties. As we all flew out from Manchester Airport, little did I know what an amazing experience it would turn out to be, both professionally and personally.
Back home in Ramsbottom, just to the north of Manchester, I took some time out to reflect on the trip and came up with what I initially thought would be ten US investment tips for UK entrepreneurs:
1 / The British Consulate General in San Francisco — with special thanks to Helen Moore and her team, plus the delightful Samantha Evans, Vice Consul, Software (Trade & Investment) — has a marvellous suite of resources to help businesses who are serious about working or doing work in the US. There is a large ex-pat community out there (loads of Mancunians) and they’re really keen to help where they can.
2 / TechNorthHQ.com are definitely the people to get you underway…if you are from oop north, that is. With the cooperation of the British Consulate, they organised a ton of meetings for us.
3 / Shy bairns get nowt! Do not be afraid to ask people for meetings. Unlike in the UK, they are quite likely to say yes if you pitch it correctly.
LinkedIn is a vital part of prepping for your trip. It is well worth contacting people with whom you are not yet connected and, say, request a meeting. Everyone I contacted got back to me and, I don’t know about you, this rarely happens in the UK. I managed to organise a meeting with someone who has long inspired me, the CEO of massive ad tech company, off the back of a suck-it-and-see LinkedIn approach. I must add that, if you don’t have the time, use Searchquant.net. The lovely Chris Zaharias can help you out there. Set your LinkedIn page up for the type of prospects you want and just let it run. It’s fabulous.
HOWEVER…
4 / Not getting a no does not mean it is a yes. Do not hang around on the off chance: keep on connecting.
5 / Just because someone talks to you it doesn’t mean that they are your best buddy. It is relatively easy to get an audience in the US.
6 / There is a widespread perception by angel investors in the US that if you cannot obtain funding from sources close to home, then you are not investment material. We met one particularly brutal, if brilliant, angel investor — Matthew Le Merle of Keiretsu Capital — who told it straight. If you have not been able to secure finance from your parents, friends or wider family then do not expect them to invest in you! Matthew, and many like him, believe that the acquisition of investment must be an inherent skill for any would-be entrepreneur. If you have failed to get money in the UK, expect zero sympathy.
7 / The investment community as a whole is very mature. Silicon Valley has 50 years’ experience in investment and Seattle has 30.
8 / Give back. Investors are looking for rounded individuals — it is not all about the take.
Being a member the first club™ — a Salesforce.com co-initiative that leverages 1% of product and employee time to improve communities around the world — is highly valued in the US. They are really into giving back. From a personal perspective, US generosity is most definitely a truism: I got invited to so many parties that I didn’t have to pay for food or drink all week. But beware of free pouring of spirits or you could lose a morning to a hangover! There is no such thing as 25ml measures out there, more like a tumbler of whisky with a splash of coke.
(Sadly, this was all in stark contrast to the high levels of homelessness that we witnessed).
9 / Silicon Valley is miiiillllleees away from San Francisco city centre. Take note!
10 / There are a whole host of incubators and accelerators which welcome international candidates. The two-week early stage venture programme by Blackbox VC (Senior Director: the lovely Chad Kaul) is eminently suitable if you are looking for an intensive overseas experience.
11 / The Americans are more likely to do business with someone on the ground rather than someone who visits every few weeks.
12 / You are unlikely to get US investment unless you are based in the US.
13 / Average graduate development salaries in San Francisco is $120,000 per annum with free lunches, healthcare and assorted benefits. It is exactly the same in Seattle…but with a free Tesla thrown in! It makes the UK look like a potential development offshoring facility. Take note UK plc!
14 / Seattle has much cheaper housing and office costs than San Francisco and you will keep your staff longer as they are more family-oriented.
15 / Seattle has strong links with China, is only a two-hour flight from San Francisco and has an abundance of graduates. San Franciscan investors are more than happy for you to be based there.
16 / The three cities of metro Seattle’s Eastside (Kirkland, Bellevue and Redmond) has undergone systematic urban revitalisation and is now a vibrant high tech cluster.
The weather in San Francisco in October was AMAZING whilst we were out there. Their summers are, however, foggy. Seattle was less dazzling but the city is a perfect environment in which to relocate a business (and family). The local council was extremely helpful and they have a plethora of contacts to start you on your journey.
OK. So I miscalculated and I’ve delivered 16 takeaways and not ten as promised. I could go on and on, but I think you really do need to get out there for yourself and explore. Assess what might be appropriate for you whilst planning the US expansion of your business.
I sensed that US investors hold a misconception that the UK is awash with angel money. There is, of course, plenty but what they do not appreciate is that pretty much every angel that I’ve ever met only wants to invest in areas that they understand. Disruptive tech barely gets a look in. We just do not have enough tech-savvy angel investors in the north of England and there are way too many EU-funded time wasters trying to put hurdles between entrepreneurs and angels. I felt quite smug having already received investment and I felt huge sympathy for those of our contingent who have just started looking.
I think the UK could learn a lot from the US, from government policy on who can get access to The Angel CoFund to how the EU allocate their funds to councils looking to overseas companies or investment into the area.
Whilst we were in San Francisco, we attended Salesforce.com’s Dreamforce 2016. With 170,000 delegates and more than 3,000 breakout sessions spread over four days, it was an overwhelming experience. They even had U2 headlining the free gala concert, Dreamfest. I must take this opportunity to thank Leon Markham, VP of Market Strategy at Salesforce for granting an exclusive audience.
Here is a top tip that I left off my list: if you are seriously thinking of going to Dreamforce next year, book your accommodation well in advance because the hotels sell out very quickly. Such was the lack of hotel space in San Francisco at the time of our visit, I found myself not only sharing Airbnb accommodation but co-occupying a bed with one of the UK delegates. When we finally made it to Seattle where we had organised a twin room, it felt like a scene from I’m a Celebrity…as we leapt head-first onto our own pillows and basked in a sparkling bathroom.
If you thought that was unfortunate, one of my fellow delegates shared a house with a posse of strangers who habitually foraged his belongings. Every day he would turn up laden with his valuables in case he never saw them again. I imagine that this is an exceptional case, but it does underline how crucial it is to organise your board and shelter pronto.
ACKNOWLEDGEMENTS
GP Bullhound, dealmakers in technology and good friends from over here were our good friends and hosts over there, with special thanks to Ed Prior, Nataly Bean and Alec Dafferner. The Innovation Triangle in Seattle were also amazing hosts and gave a fabulous overview of the area and what you could expect there. They did a great job: I’m totally sold. Thanks go to Margo Shiroyama for the super information pack.
I’d like to thank my fellow Tech North Trippers and #TechNorthWestCoast Slackers for making it an unforgettable experience: James Bedford, Head of Investment Strategy at Tech North; Nick Black, CEO & Co-Founder of Apadmi; Paul Brooks, Co-Founder of Twile; MB Christie, Chief Operating Officer at Tech City UK; Richard Gregory, Director of Tech North; Paul Haydock, CEO & Co-Founder of DueCourse; Ben Hookway, CEO of Relative Insight; Jon Leighton, MD of iResources & Founder of Neatly.io; Mylo Kaye, CEO at Dreamr; Adam Mitcheson, CEO & Founder of my2be; Owen Nicholson, Head of Growth at IN-PART; Mike O’Brien, CEO & Founder of Opencast Software; Vicki Shiel, Head of Content at Tech North; and last, but by no means least, my new BFF and bed-sharing buddy Miss Ravneet Kaur, Co-Founder & Director of clean-tech start-up Equiwatt.
One last thing. Those millions are not going to earn themselves so if you know of anyone who needs a hand with their Google and Bing Shopping, Facebook Dynamic Ads, visibility on eBay and Amazon, etc., and they are looking for an award-winning solution, please point them towards our HQ in Silicon Rammy. Did you notice that brazen plug? Now…I wonder where I got that from?