Investors Invest Locally – Can the Myth be Broken – Part 3

Building my network of Israelis in NYC SOOMLA seed round results and the verdict of our attempt to break the local investment myth

I started by setting meetings with pretty much anyone I could. My focus was successful entrepreneurs who raised early stage rounds in the U.S. but I ended up meeting any entrepreneur and even bankers, lawyers and all sorts of middle mans.

Let’s look at the odds for a second.
After all this work I had on one corner:

  • An awesome company
  • The right setup to technically complete an investment process in the U.S.
  • A credible story that I’m moving the company to NY/Boston
  • Target audience that is willing to invest in Israeli entrepreneurs
  • Network of people helping me out

On the other corner I had:

  • One big myth to prove wrong

Round One – no lead investor

I ended up meeting 32 investors in the NYC and Boston scenes. On the more institutional side, 3 of them started a process and with one I made it to the partner meeting phase. Number of U.S. investors willing to lead this round – 0.

Round Two – closing the round in Israel

Of course, while focusing on the U.S. market, I was also meeting any investor I could in Israel. I ended up getting more traction in the Silicon Wadi and SOOMLA had interest from both VCs and Angels. One thing led to another and 2 months into the round we had a lead investor. While it seemed like the longest 8 weeks ever, the round closed about 2 months since the lead investor joined and a total of 4 months from the beginning. By closed, I mean – money was in the bank. If you have another type of “closed” you are making a huge mistake.

Afterthoughts – local investment myth and the value of pitching overseas

While I can safely say that I failed at breaking the myth, I couldn’t have wished for a better round for SOOMLA. Here are some takeaways from the experience:

  • Our lead investor was based in Israel but he was introduced by a U.S. based entrepreneur
  • Some Israeli investors perceived SOOMLA as higher quality due to our U.S. orientation
  • Israeli VCs talk between them to understand your alternatives – having a co-located allowed us to keep our cards closed to the chest.
  • The advice in the U.S. improved SOOMLA’s pitch a great deal
So, the overall result was quite positive and I can almost say for sure that the round was better than it would have been if I would have focused all my efforts in Israel.
This is the 3rd part in a 3 parts post. Click here to read part 2 or Click here to read part 1
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