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"Editor's note: This is a guest post by\u00A0Stefano Bernardi, who is on the founding team of\u00A0Betable, where he heads Customer Development. Previously, he worked in venture capital in Europe. He is a part-time hacker, angel investor, and product advisor, and was selected from more than 300 people to \u201Cshadow\u201D Dave McClure at\u00A0500 Startups. You can check out\u00A0his blog\u00A0and follow him\u00A0on Twitter.\r\n\r\nIf you\u2019re a European and work in tech in San Francisco, every summer you\u2019ll be inundated with dozens of emails from friends, contacts and unknown European entrepreneurs who will ask you for advice and introductions to US investors for their classic\u00A0VC fundraising trip.\r\n\r\nI\u2019ve been in San Francisco less than two years, but I\u2019ve met with countless entrepreneurs during their fundraising trips and I believe I now have a statistically significant pool of data and experiences to analyze, in order to save time and money to the ones who\u2019ll follow.\r\n\r\nHere\u2019s the hard cold truth:\u00A0Your chances of raising money from US investors are extremely low.\u00A0It\u2019s almost impossible.\r\n\r\nBut it\u2019s not all doomed. There is a lot of money in Europe, and if you\u2019re willing to learn from your US trip, it might actually be easier to raise money back home than in the almighty Valley. One of the last entrepreneurs I met on a funding trip, ended up raising a\u00A0$6M round in Italy.\r\n\r\nComing to San Francisco to network, meet interesting people, get advice on your company is a great learning opportunity and the cost is well worth it. But don\u2019t expect to go back with a check.\r\nPut yourself in the shoes of a US investor\r\nInvestors work in pattern recognition mode, and as a European entrepreneur in the valley, the pattern doesn\u2019t look too good.\r\n\r\n\tYou probably haven\u2019t gone to Stanford and MIT.\r\n\tYou probably didn\u2019t work in a major successful US startup.\r\n\tYou probably don\u2019t have many mutual connections with the investor.\r\n\tYou probably have visa problems.\r\n\r\nInvestors worry about these things. As much as you think you can be the exception because your idea is revolutionary, investors have no way of knowing you, in fact, might be, and will turn you down consistently. It really helps to understand the reasons.\r\nIt\u2019s all about the network\r\nAs with every other thing here in SF, it\u2019s all about the network. Network comes into play in every aspect of the fundraising process but also, most importantly, in the process of running and growing a company.\r\n\r\nReference Checks\r\n\r\nOn top of\u00A0deciding\u00A0if the market is big\u00A0enough, most investors only do one type of due diligence for seed deals: reference check the founders. If you have no mutual connections with the investors and thus no credible references, well.. it\u2019s hard to check them. Investors don\u2019t know who you are and have no way to figure out if you\u2019re really as good as you say.\r\n\r\nHiring\r\n\r\nThis applies mostly to EU founders who want to move permanently to the US.\u00A0If you have no network, you will not be able to hire the best people in San Francisco. Startups are made by people, and hiring a killer team is the only way to succeed. If an investor thinks you can\u2019t hire, you\u2019ll not get funded.\r\n\r\nFundraising\r\n\r\nRaising a seed round is one thing, but without a network, will you be able to effectively raise all the money your startup will need to grow? Again, if an investor doesn\u2019t think you can, you\u2019re done.\r\nSo, then what?\r\nIf raising money in the US is so hard, what should a European startup do?\r\n\r\nIn my opinion, the best strategy is to\u00A0raise your seed round in your home country\u00A0and prepare the ground for a future, larger A-round in the Bay. That\u2019s what most startups who come here will have to do anyways, you might as well prepare and execute.\r\nPractice your pitch\r\nMeet investors and angels, and practice your pitch. They will poke holes all over it and you should be glad, as you\u2019ll go back to Europe with a much stronger pitch and deck.\r\nBuild Relationships\r\nMeet investors. Tell them who you are and what your company does. Let them understand at what stage you are and ask them when you should come back to them. Usually this will be for a small Series-A. Building a relationship prior to raising money is crucial and Mark Suster\u2019s article on\u00A0investing in lines vs. dots\u00A0explains why perfectly.\r\nNetwork\r\nTalk to competitors, executives, engineers, recruiters. Find people that did it before and seek their advice and connections, you\u2019ll need them for your next round.\r\nJoin an accelerator\r\nYour best bet as a European founder is to join an accelerator. This will help you develop your network and get the\u00A0legitimacy you need to show bigger investors.\r\n\r\nSome accelerators are more keen to letting European startups in\u00A0than others, but most of them will not discriminate as much as institutional investors. Your best bets are Europe-focused accelerators like\u00A0Mind The Bridge\u00A0(disclosure: I am a board member) and\u00A0international-friendly ones like\u00A0500 Startups\u00A0(disclosure: I shadowed Dave McClure at 500 Startups). A small number of EU companies have also made it through\u00A0Y-Combinator.\r\n\r\nBut as always, the final tip of advice is:\u00A0don\u2019t let this post discourage you. Do what you feel is best for your company and shareholders. If you think you can raise money in the USA, by all means try it.\u00A0A handful of entrepreneurs made it, and I was happy to be a backer. And who knows, maybe you\u2019ll be the next\u00A0Stripe.\r\n\r\nImage credit: Adam Gault / Thinkstock"^^<http://www.w3.org/2001/XMLSchema#string>
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