Forming Your Startup in Silicon Valley
Silicon Valley located in the San Francisco Bay Area is home to some of the top technology companies in the world. It is the headquarters of digital giants and other companies like Apple, Alphabet Inc.-Google, Netflix, Wells Fargo & Co., Facebook, Visa, Inc., and Chevron Corporation among others. The “Big 5” tech companies in the Silicon Valley generate revenue of $802 billion, which is more than the GDP of Switzerland and Saudi Arabia.
Since Silicon Valley is one of the major epicenters of technology, innovation, accelerators, and startups; it presents an ideal business platform to register a Silicon Valley startup. Entrepreneurs and innovators have always favored the Silicon Valley startup ecosystem for launching their new ventures and so have venture capitalists and other investors. Let’s take a look at the fundamental requirements for starting a new business in the Silicon Valley region.
Prepare your startup idea and business plan
If you have a genius or innovative business idea then it’s time to incorporate a Silicon Valley startup. One of the first steps towards forming your new business is preparing and developing your startup idea and drafting a business plan. There are certain aspects that you need to consider while developing your startup idea as the business plan will be created accordingly. The most important aspect is to analyze the relevant market.
If you are planning to register a Silicon Valley startup then it is important to compare the markets in the cities situated in the valley like Santa Clara, Menlo Park, Sunnyvale, Palo Alto, Mountain View, Redwood City, and Cupertino. The next step is to execute a market survey in the chosen city and finally, develop your product, service or solution. Once you have defined your startup idea, it is time to create a business plan. There are some core areas that your business plan should focus on and they are:
- Executive summary: This will include information about your startup and objectives in brief
- Market analysis: This includes information pertaining to industry research, competition, and launch market
- Company Structure: The structure of your startup like Corporation or LLC
- Branding, marketing and sales: This area will focus on modes and plan of advertising, marketing, and selling
- Product or service: Description of what your product or service is and how will it be beneficial for customers
- Financial projection and business model: A broad view of the earning potential of your startup and future financial scope
- Strengths, weaknesses, opportunities and threats (SWOT): A SWOT analysis will provide a realistic view of challenges, bottlenecks, potential threats, and opportunities available.
Networking/connect with industry experts
In this digital age, it goes without saying that the more people you connect with; the better it will be for your business. If you are planning to form a Silicon Valley startup then networking or connecting with industry experts will help further your startup plans or business expansion. Whether your business is currently in an ideation phase or moving towards a minimum viable product (MVP) stage; it is important to connect with industry experts as well as investors through a variety of networking channels and platforms including events, opportunities, coworking spaces, and meetups. The opportunities you can leverage when you register a Silicon Valley startup are:
- Meetups: One of the best options for networking within the Silicon Valley startup ecosystem is by becoming members of various Silicon Valley entrepreneur groups as they organize both events and meetups. Some of the top groups for meetups are Silicon Valley Young Professionals-SVYP (Santa Clara), Silicon Valley Entrepreneurs Toastmasters Club (Santa Clara), SF Tech Ladies (San Francisco), and Bootstrappers Breakfast – Silicon Valley Startups (San Jose) among others.
- Events: One of the greatest benefits for aspiring entrepreneurs or first time business owners in the Silicon Valley is the large number of tech and startup events that take place in the region. Some of these events are attended by executives of the top startup industries in Silicon Valley. The events can be categorized under:
- Inspirational startup events
- Startup Events on Best Practices
- Events focussing on Network and forming a team
- Investor Networking Events
Incorporate and register your startup
In most states including California, all you need to form a business corporation is submitting articles of incorporation to the office of the Secretary of State of the chosen jurisdiction. However, if you are planning to incorporate a Silicon Valley startup or a high-growth tech company then the business formation will require much more than simply submitting the articles and bylaws. Some of the aspects integral to Silicon Valley startups are rapid growth, issuance of equity incentives to employees, scaling your business, and creating the ability to take outside investments. So, how are most Silicon Valley startups formed?
A majority of Silicon Valley startups have been formed as corporations and more importantly, they have been incorporated in Delaware. The primary reason for this is that Delaware laws and management are business friendly as opposed to California corporate laws. When you incorporate a Silicon Valley startup in Delaware, it also increases the chances of finding investors and they are familiar with the Delaware laws. Once you have formed in Delaware, you will not be required to re-incorporate anywhere else, which means you are not required to register a Silicon Valley startup but instead apply for foreign qualification.
IncParadise can not only help you to incorporate a Silicon Valley startup in Delaware but also assist with the process of foreign qualification in California.
Secure funding for startup
Every business requires a startup capital; some require higher investments while others can kickstart their business with minimal capital. If you are planning to form a Silicon Valley startup then depending on the industry the startup belongs to, you may need outside funding. The question is, how do you secure funding for your startup?
The good news is that there is a large number of funding resources in Silicon Valley right from angel investors to seed accelerators. One of the key aspects towards securing funding is a strong business plan that encompasses business objectives, strategies, competition, market research, and product or idea that you want investment for. The early-stage startups can approach Angel Investors once they form a Silicon Valley startup. Some of the top angel investors include Adeo Ressi, Alexis Ohanian, Andrea Zurek, Christine Tsai, Eric Reis, and Zachary Aarons among others.
There are also several Angel investor groups, which is essentially a pool of investors pooling their resources together. Some of the big names include Angel’s Forum, F50, Open Silicon Valley Forum, and Sand Hill Angels to name a few. Some of the top startup industries in Silicon Valley have businesses, which have achieved higher growth by securing funding through angel investors in the initial stages.
The other forms of funding available are Growth Stage Funding and Seed Accelerators. The latter accepts teams and not solo founders and the investment may vary from $15,000-$150,000 in exchange for an equity of 6% to 10%. Growth stage funding involves Venture Capital firms that provide growth equity or startup capital to promising ventures.