[thecupisblue]

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP.

Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single pitch with a deck live. If it was a live meeting, they've already seen the deck or we've done a short pitch over zoom already. The "stand in a meeting room and pitch to VC's" thing is mostly a myth nowadays.

But a 5 million raise without even having a product just sounds insane. We've been offered 50-100k offers due to our team and product, but rarely anyone wants to invest more than that in a pre-revenue/pre-launch startup. And if they do, they would do it in tranches and by the time they would invest 500k we'd be giving them more than 20% equity.

The difference in valuations is just insane, with even VCs straight-up telling us that if we were raising in US we'd be offered 5-10x more than here.

Honestly, this whole ride makes me think I should just get a job at a US startup and use the cost of living difference to pay devs out of my own salary.

[ryanSrich]

This is 100% a symptom of not being in the US. Seed stage VC might as well not even exist in Europe. It’s so risk averse that it’s something else. It’s not VC.

In the US, you can raise money ($1m+) with just an idea if you have some combination of the following (often times just one of these is enough)…

- you have some traction in the form of pre-signed customers

- you have previously had startups success (multiple rounds, an exit, etc.)

- you are a master networker with a very large Twitter/LinkedIn following

- you are well known within your circle of expertise. Could be that you run a large newsletter, or podcast, or blog

- you know VCs personally, and are close enough with them that they’re willing to take on some risk with you

- you have a world class team of co-founders. Could be someone that built something open source, or lead some large branch of a FAANG company (I’ve seen former AWS employees raise on the simple fact that they worked for AWS)

- you went to a prestigious university like Harvard or Stanford. Many VCs attended these universities and are more willing to work with you in these cases (as much as people don’t want to believe this it’s true)

There are probably dozens of other scenarios and combinations of scenarios that would allow you to raise with just an idea. But it’s 100% possible (I’ve done it).

[moreira]

> Honestly, this whole ride makes me think I should just get a job at a US startup and use the cost of living difference to pay devs out of my own salary.

I know this was an off-hand remark that you're probably not thinking much about, but you're absolutely right, and it might be worth seriously considering it. Moving to the US is probably the single biggest improvement you can make to your career and opportunity options. You will never have as much opportunity in Europe as you will in the US, not in the tech world. You might be able to eke out some success in Europe, but it'll pale in comparison to what you could've achieved in the US.

[thecupisblue]

Oh it's not just an off-hand remark, been thinking a lot lately, especially the closer we are to closing a round the more it's on my mind.

I know that career-wise I'd have more opportunity in US, but besides that, not much attracts me there - quality of life is way better here. Especially if I can work remotely for a US based company and use 50% of my salary to hire at least 2-3 developers locally to work on my product. The difference in salaries and cost of living is huge.

[influx]

Be careful, US companies usually have you sign IP contracts and do not approve of moonlighting.

They could well try to claim stake or ownership on your company, even if they lost, the distraction and money it would cost to defend probably aren’t worth it.

[gumby]

> They could well try to claim stake or ownership on your company...

Note that not only is this not legal in California (but is in others -- Texas is particuarly notorios) but any employment agreement in California must specifically include a copy of the relevant section of law so that the employee is a aware of their rights. But don't use any of the employer's property (e.g. computer, IP) or do it when you are supposedly working: in that case the law does not apply and the employer does get the rights.

[dottedmag]

If they hire as a contractor, then it's easy to say no to these clauses. If they hire through a local subsidiary then these clauses are against the law in much of the Europe.

[helloworld11]

How the hell can they justify this habit of telling a developer what they can and can't work on in their own time, or making any claim to it afterwards just because someone worked at company X during the same time they made side project Y? The whole tendency seems grossly onerous and unjustifiable to me.

[metadat]

This is precisely it, you get it.

[helloworld11]

Then why is there no widespread pushback against this idiocy? It's grossly unfair and seems like a lite version of some notion of serfdom, by which you belong to your emplo0yer just because you spend part of your day working for them during some time period.

[syedkarim]

>>with even VCs straight-up telling us that if we were raising in US we'd be offered 5-10x more than here

Serious question: Then why even remotely bother raising from European VCs? Doing so is clearly not in your best interest. Is it a matter of pride?

[thecupisblue]

Not many of them are willing to invest in EU startups at early stage - a lot explicitly say they invest in NA only, and I assume a lot of them just don't want the legal difficulties - also it's much harder to get warm intros to US investors if most of your network is based in Europe, and logistics to do a in-person meeting are way harder if somebody is on the other side of the world.

[pyb]

Even if the company is incorporated in Delaware ?

[AlunAlun]

Serious answers (from someone who just raised €10M from European VCs for a pre-revenue, pre-launch company):

1) While US investors can and will invest in Europe, they are more likely to do so at a later stage.

2) Not everybody wants to move to the US on a pipedream, particularly those with family, kids, and roots on this side of the Atlantic. Again, at later stages, when there is more stability to the company, this can change.

3) the lower cost of operations in most of Europe partially makes up for the lower amount you raise - our monthly personnel cost is a fraction of what it would be in the bay area. And again, as you grow, and need to hire really senior experienced talent, this changes.

4) there is early stage money in Europe. Maybe you don’t raise 5M with a PowerPoint, but you can raise. There is also a vibrant startup scene with several hubs (Berlin, London, Barcelona). Though I will admit, it’s not as crazy as Silicon Valley where everyone I meet seems to have a crazy startup idea.

The biggest downside I see is that, as a European founder, you likely have to go through one if not two pre-seed rounds before you can raise ‘decent’ money, which dilutes you and puts you at a disadvantage for when you eventually move to the US (which you probably will do at some point, at least in terms of incorporation).

Yet, despite knowing this, I’m not sure I would have done that much different in my journey so far.

[cjblomqvist]

Having raised a (preish) seed round on Europe, I'd like to add that it's even quite common in Europe that they expect you to be able to raise some first money (lead investor) in your home country first. Raising remotely (country wise) is definitely a much bigger challenge, at least in early phases.

[davidhunter]

Very few US VCs will/can invest in non-US companies at the seed stage.

[baxtr]

What does non-US mean? European Founders could register a Delaware company. Is that good enough?

[gumby]

Partially. By investing in a delaware corp they know the law that will apply, and the tax code.

However if you're far away it's harder to keep up with what's going on with your company and many will not want to deal with that.

[ido]

How much harder is it for an SFBA investor to keep up with what's going on in a Berlin or London startup vs, say, an Atlanta or Miami startup? As long as you need to board a flight to get there isn't it more or less the same, whether that's a 4 hours flight or an 8 hour flight?

[CalRobert]

I'll ask - what's your startup? As an American living in Europe who really doesn't want to move back this is disheartening to say the least. Moving here did basically mean taking a sledgehammer to my career, admittedly.

[thecupisblue]

Check the link in bio!

In a way it is, the more you know about the US tech scene - the more it feels like you're handicapped in Europe - especially if you're not living in a tech hub.

[CalRobert]

It's weird. I do remote work for a US company from the middle of Ireland. I make more than virtually exerybody I know here, and less than any of my friends in tech back in CA. Comparison is the thief of joy I guess.

[baxtr]

Two questions: have you considered raising in the US? It’s gotten easier with the pandemic

And: re new pitch decks. Is there a good template for the new type of pitches?

[thecupisblue]

1. Not really, since we don't have enough connections in the US to make relevant warm intros to the VC's.

2. Also, not really - we did the YC style one but had to explain a lot more in the slides, which means adding more pages and more tradeoffs in what's important/what's not. Also influences the design a lot, since you can't just do the "pretty minimal slides" presentation. If you are used to speaking at conferences/meetups/companies, this will probably throw you off guard since you have to completely switch-up your style.