How can you overcome geographic barriers when working with startups?

The secret to overcoming the geographic barriers when working with startups is to have a strong global network. You can only go so deep over Zoom. And you can't always meet in-person, face-to-face. So, we strive to build a network that is at most one degree of separation from the best person to talk with to validate any given startup company and the market opportunity, wherever it is on the planet. Most likely this person will lead you to two or three others. Good network connections will give you much better insights into a market and a different culture than flying in and flying out.

Utilise Technology and Digital Tools: - Leverage digital tools for remote due diligence. - Use blockchain for enhanced transparency and security in transactions. - Foster Local Partnerships and Networks: - Partner with local investors who understand the regional market. - Engage in international VC networks for broader insights and connections. - Regulatory and Legal Compliance: - Navigate cross-border legal frameworks.

Technology Utilization: Embrace video conferencing, project management tools, and communication apps to maintain a strong connection with your team and partners, regardless of their location. Cultural Awareness: Acknowledge cultural differences and adjust your communication approach to promote inclusivity and understanding among team members. Travel Regularly: Schedule regular visits to different locations to meet with team members, partners, and stakeholders in person. This helps build stronger relationships and gain a deeper understanding of local markets. Community Involvement: Engage with local communities and organizations in the regions where your startup operates to cultivate a supportive network and make a positive impact.

To wisely invest in a startup elsewhere, conduct thorough due diligence: - Market Insight: Use data platforms (Statista, Crunchbase) and consult analysts. - Customer Behaviour: Survey tools and social media analysis offer insights. - Competition: Research competitors via databases and industry events. - Regulations: Engage legal experts and review government guidelines. - Direct Observation: If possible, visit the startup and connect with local incubators. - Ongoing Engagement: Maintain an advisory role for continuous updates. This strategy merges data analysis with firsthand insights, ensuring a comprehensive understanding of the investment opportunity within a concise framework.

Many VCs follow the "bicycle rule". They only invest in a startup, if a co-investor they trust "lives a bicycle ride" away. I think you absolutely need market context. Without someone truly understanding the intricacies of a region you can never judge the validity of the startup's strategies. In a best case you as investor have that shared context. But at the minimum you need a trusted syndicate partner who has!

It's too costly and logistically impossible to fly around the world to see every portfolio founder in person. But let all your portfolio founder know that if they come to your city, you'll cancel your meetings and spend the entire day with them. Whenever portfolio founders come to Denver, I try to take them hiking for a half day and then have them over to my house for dinner with my family. You can spend an hour a week on the phone with them for a year and still not know as much about them [as humans] as you would if you go hiking with them for a half day and see where the conversation leads you.

I launched a seed stage fund in New Zealand in 2018 and split my time between NZ and San Francisco. It worked OK but last year I moved to Auckland to be closer to the people and companies I’ve invested in. It makes a difference and I’m now part of the local ecosystem. I agree that investors testing the waters in a foreign market are better off investing in a fund to learn rapidly about the market and companies.

The secret to overcoming the geographic barriers and developing trust when working with startups is to have a strong global network. You can only go so deep over Zoom. And you can't always meet in-person, face-to-face. So, we strive to build a network that is at most one degree of separation from the best person to talk with to validate any given startup company and the market opportunity, wherever it is on the planet. Most likely this person will lead you to two or three others. Ideally, through this network you connect with a local investor who already knows the startup and can help you create the trust that you need. Good network connections will be much more effective than flying in and flying out.

If you’re unable to fly to the places where the founders are based, you may be better off investing via a fund or similar vehicles. Unless you can understand the local market, build a relationship with founders and work together, it may not be a great idea to invest directly. Physical access also helps with introducing the founders to others (customers, partners, possible hires, investors, etc).

Build trust and relationships with local co-investors. They can have a more hands-on approach and understand your founders better.

It is most surprising to work in different environments at first: meetings over lunch in Paris take more than 1 hour, and we start discussing business after small talk when we get to dessert or coffee; compare that with a 20 min meeting in Silicon Valley where the questions are direct "what are we discussing / what's in it for me / next steps? / let me walk you back". Or never go alone to a meeting in Japan (lack of respect), and always bring a gift. A great tool is to keep track in writing of all these observations and share them over time with your direct network. Erin Meyer's "The Culture Map" is a good book to start understanding the landscape. Talk to people who have worked in those places, and do your research before hand.

Navigating cultural diversity in startup collaborations demands adaptability and respect. Embrace varied perspectives and practices while adjusting communication and negotiation strategies accordingly. Being open-minded and sensitive to cultural nuances strengthens partnerships, fostering innovation and mutual growth.

We are different when it comes down to cultural aspects. It's simultaneously the most beautiful and challenging thing. While it's essential to learn about the culture of a company you're planning to invest in, don't make it your sole focus. Business should remain the top priority. Consider reading "The Culture Map" to gain insights into business communication in various countries. REMEMBER - cultural norms, values, preferences, style, and language can vary. However, don't compromise your principles. If things don't feel right, it may not necessarily be related to cultural aspects.

Localization is key for every startups especially B2C ones, my recommendation would be to scale some central functions at HQ level, while focusing on execution and marketing and customer service to be tailored at local market level.

Diving into a new culture is like exploring a new world. Getting the culture right with startups from different backgrounds isn’t just nice, it’s essential. Learn the ropes, respect their ways, and communicate clearly. It’s not about changing who you are; it’s about expanding your horizon and finding common ground. This journey into cultural differences can spark incredible creativity and breakthroughs. Embrace it fully. When you genuinely respect and engage with another culture, you’re not just building bridges; you're opening doors to endless possibilities and richer collaborations.

Ask yourself why? Then ask yourself why again. How much can the startup contribute to your market and plan? To warrant investment it needs to clearly overindex on these criteria to draw the additional investment of senior resource and time that geographic and cultural difference will require. Time zone difference is a real factor.

It’s not always possible but getting the founders or founding team together in a room is SO important. Body language, interpersonal interactions, and influence dynamics tell their own stories. There have been many times - several I can recall in detail today they were so jarring - when we passed due to our intuition telling us something was up between the team members. The world has gone remote, but the in-person meeting is still so informative.

Before venturing into new geographical markets, startups must conduct thorough risk assessments. This involves identifying and analyzing potential risks associated with each location, including political instability, regulatory compliance, cultural differences, economic volatility, and logistical challenges. By understanding the specific risks inherent in each market, startups can develop targeted risk management strategies to mitigate potential threats.

Risk management is at the core of any investment strategy, even more when you invest in a new zone. Macroeconomic and political aspects can have a deep impact on the future of the founders and the company. You can watch information on the site of your embassy on this country or on the website of the Foreign Affairs, always a good source of knowledge.

Managing risks in cross-location startup investments is vital. Conduct thorough due diligence, vet founders and teams, and scrutinize contracts. Diversify portfolios, hedge currency exposure, and maintain regular performance monitoring. Stay proactive to safeguard investments and maximize returns.

Being a fully remote company, it gave us massive benefits to be able to hire the best talent in the world in our field, and have proper diversity. In the last 16 months, we had 3 babies born in the team. Being an in-person company would not have allowed the mothers (including me) to be present with their newborns as we would have wanted to. I am grateful to my team and our investors to believe in our system.

As a VC, collaborating with startups globally offers immense benefits. Access new markets, talents, and opportunities. Gain competitive edge, global perspective, and diversified portfolios for enhanced returns and reputation. Contribute to ecosystem growth and positive global impact. Embrace the opportunities for mutual success and innovation

A big barrier for working across geos ( say between US and Asia) even in the post-covid era is the time zone difference. Since teams are working at different timezones getting a response can take upto 24 hours and can slow down problem solving. This time difference however, can be converted into a benefit if problems of the appropriate size can be passed down (ideally those problems that take 1 day to be solved). For this method to be successful it requires both teams having a similar skill level, trust in each other and ability to define and size the problem well.

Global investing serves dual purposes: Firstly, it aims to leverage untapped potential in developing regions by introducing innovative solutions, mechanisms, and business practices. This engagement offers personal fulfillment through witnessing tangible results and fosters professional growth by sharing expertise, overcoming challenges, and learning. Secondly, it seeks to capitalize on opportunities in developed markets by addressing existing gaps in solutions, mechanisms, and business practices within one's own country or region. Both avenues present opportunities for personal and professional advancement. New locations represent new knowledge, new challenges, exiting from comfort zone - thus new skills and adaptability.

The first investment made in a country or a new geographic zone can be a great way to generate new local opportunities in your deal flow. Founders talk a lot with their peers and share information about investors. That's why it's important to consider a first investment in a new zone as an accelerator for the future in this zone. So try to make a great impression to receive quality decks from leaders of this zone.

A 7 point checklist that I have made for myself- 1. Engage with a very robust ‘localised’ legal counsel or firm 2. Spend months hiring your first set of core team members 3. Have a heavy focus on inter cultural learnings and alignments 4. Create the position for a good translator, if not already provisioned for 5. Be frugal- this sets culture on one part, whilst also brings in the value of economics- easy to go overboard if not dealt sensitively 6. Respect the local working culture and adapt to the common practices to imbibe belongingness 7. Double check on ensuring that your communication is very clear. A foreign country, where you do not speak the language, is vulnerable, to quick misinterpretations. What are your learnings?

To overcome geographic barriers when working with startups, leverage digital tools and platforms like Zoom, Slack, and Asana for efficient communication and project management. Build a flexible work culture that supports asynchronous work, allowing team members in different time zones to collaborate effectively. Use cloud services for document sharing and collaboration to ensure that everyone has access to the necessary information. Attend virtual networking events and webinars to stay connected with the global startup ecosystem. Consider occasional in-person meetups or retreats to strengthen team bonds.

For every market, there is a checklist of criteria that require deep and practical experience to evaluate. Additional to the mentioned before, my checklist includes: - Competitive Landscape: Evaluate how the investment stands out and has an edge over the competition. - Scalability and Business Model: Examine whether the product or service can scale up quickly without increasing costs proportionally. - Exit Strategy: Comprehend the market dynamics and foresee possible exit scenarios (e.g., acquisition, IPO).

There are very few teams that are able to truly work remote and excel. Carefully consider how much culture is a factor for an investment to succeed, and invest accordingly. Distance restricts the ability to perform crucial interventions.

Find people and companies who have the right local knowledge and experience and are prepared to represent you and your business in the geographic area of interest. There will be a cost but this is likely to be more than offset by stronger sales of your product or service.