Former managing directors of a large network of seasoned angel investors were getting ready to start a micro VC with 5 million USD to invest in early-stage technology companies in Silicon Valley. This was a challenging task however and they had to clearly understand the emerging trends in the startup world.
It was fairly daunting and time-consuming to study the business culture in Silicon Valley and to find out which types of startups and sectors are the most appealing ones to successful investors based in San Francisco Bay Area. As non-American investors with limited experience in the Valley, our client had to make very informed decisions while entering this intensely competitive environment.
We initially discussed the size and dynamics of the market in the Valley and created a list of accomplished micro VCs in the United States. Our team also interviewed a number of US-based entrepreneurs to understand their expectations and concerns of working with foreign investors.
More importantly, we analysed 4,430 investment rounds that took place in the Valley since 2012 and that involved similar sized VCs. Our consultants focused on angel, seed and venture funding specifically and examined nearly 40 sectors while investigating the investment rounds. Then we used this information to determine the future outlook of the market. The team ultimately compiled a comprehensive spreadsheet and index that pinpointed where the money is as well as the hottest start-up sectors.
Our consultants also examined the investment strategies and portfolios of the most promising American micro VCs. Based on these findings we listed our suggestions to help move our client’s business in a better direction. This micro VC will start investing in the next couple of months and our client decided to focus on four start-up sectors – all of which were among the ones we recommended.
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