Silicon Valley
Geographic Location and Population
The Valley is situated south of San Francisco, starting from the southern tip of San Francisco Bay and sprawling into the valley between the Santa Cruz and Diablo mountain ranges. Silicon Valley is home to 2.43 million residents with a total workforce of 1.5 million; 25 % of them are employed in high-tech industry.
Silicon Valley includes 29 cities, such as Palo Alto, Mountain View, Cupertino, Sunnyvale, San Jose, and many others. San Jose, the “Capital of Silicon Valley”, is approximately 50 miles south of San Francisco.
Origin of the Term
The name “Silicon Valley” was coined in 1971 by a journalist named Don Hoefler in a series of articles he wrote for the trade journal Electric News . It was a clever shorthand way of conveying the impression that this valley was home to the world’s largest concentration of semiconductor manufacturers and computer-related industry in the area (if you want to know more about semiconductor industry, check the web site www.semi.org).
The term “Silicon Valley” originally referred to the region’s large number of silicon chip innovators and manufacturers, but eventually became a substitute name for all the high-tech businesses located in the area. Many high-tech companies got their start in Silicon Valley, and there are many more in the process. All of the big names have a presence here, including HP, Intel, Sun, Google, Yahoo!, eBay, Cisco, Apple, Adobe, and many more.
For further information on Silicon Valley, the NBSO recommends the following links:
www.siliconvalley.com – Website focused on Silicon Valley news, backed by the San Jose Mercury News.
www.siliconvalley-usa.com – This website offers general and specific information about Silicon Valley: its history, high-tech companies, venture capital firms, accommodation, weather, and much more.
Innovations
The region is a growing center for new idea creation. More than 10% of all the nation”s patents are generated in Silicon Valley, which boasts many of the world”s top public and private research institutions. The following research centers and universities are located here: NASA, Stanford University, SRI International, Carnegie Mellon West, UC Berkeley, UC San Francisco. The cluster of high-tech companies and research centers explains the fact that Silicon Valley has a much higher concentration of core design, engineering, scientific, and business management talent than other region. These talented people, including both top-level and key support employees, drive the creation of new ideas, products, services, and business models that produce economic value and prosperity. This group comprises 23% of cluster employment and 14% of total regional employment – well above regions such as Austin, Seattle, San Diego (all 8-9%) and the nation as a whole (2%). New venture capital investment is a leading indicator of the region/s innovation process.
Venture Capital
Venture Capitalist is an investor or organization that invests in businesses with a considerable level of risk. The venture capitalist is willing to invest in a medium-to high-risk business in exchange for a very high level of return in order to accept this level of risk.
The entrepreneurial spirit soars in Silicon Valley. This has always been a place where a risk-taker with an idea can create a global industry that transforms the way we live.
NOTHING BREEDS SUCCESS like success. This old adage has found new meaning in Silicon Valley, crucible of the largest group of successful technology start-up companies in history. As David Lam, founder of Lam Research, pointed out, “Silicon Valley fosters a unique environment that makes starting a company seem like a natural thing to do.
BOLD LEADERSHIP is why most of the nation”s fastest growing technology firms are found in Silicon Valley. These “gazelle” companies thrive in Silicon Valley”s business environment, where successful entrepreneurs can attract the capital necessary to grow their companies rapidly.
Gazelle – innovative companies whose revenues have grown at least twenty percent for each of the last four years, starting with at least $ 1 million in sales.
NO WONDER HALF the venture capital firms in the country are in Silicon Valley – it”s the best place to find new investments. Start-ups in Silicon Valley have always had more rapid access to venture capital than comparable firms elsewhere in the nation. More than 25% of all venture capital in the United States is invested in Silicon Valley.
According to the MoneyTree Report (2006), in the 1st quarter of 2006 Silicon Valley companies attracted 36, 56% of all venture capital, which constituted $2057 M. Please refer to the bar chart below to see Investments by Region in the first quarter of 2006.
You can find more detailed information at: www.pwcmoneytree.com
As you can see from the pie chart below, venture capitalists give priority to the Software Industry: 26% of all investments are made in this innovative field; while Semiconductor Industry is on the second place: it received 15% of VC investment in 2005.
More information on Venture Capital by Industry can be found at: www.jointventure.org
The Bar chart below shows the size of Venture Capital investments in different industries in California for the first quarter of 2006. The data is taken from Money Tree Report.
More information on Investments by Industry can be found at: www.pwcmoneytree.com
Below are the guidelines for people interested in attracting investment for their start-up company.
7 Key Steps to Prepare for Your Investor Presentation
by Linda Huff
- Know Your Audience
Research as much as possible and obtain as much information as you can about the people to whom you will be presenting. It is useful to have the following information: schools, degrees, current and previous projects, hobbies, affinities, business alliances or partnerships, BODs on which they sit, etc.
Any of this information can be valuable in the future to establish rapport and a connection with your key targets. - Be the Expert in the Room. Know the following:
Your technology and your product(s)
Markets and industries in which you plan to compete. - Back up your assertions with data whenever possible when it comes to the following:
Industry size
Industry growth rate
Competitor size and strength
Financial forecasts
Need and demand for your solution. - Competition Never say you do not have any competitors – if you think you do not have any, think again!
Research the competition
Understand and articulately explain how you will be able to compete and win. (answer: How will you differentiate yourselves?) - Know What You Do Not Know – Be objective with self and organization evaluations.
Critically evaluate the skills of the team you have.
Determine what additional skills will be needed for success.
Find those people and bring them on board. - Financial Projections – Accuracy needed and back them up.
Explain your assumptions, and why you think they are attainable.
If you can not show a steep upward curve over several years, figure out why, and how you can fix it. - Learn From Your Experience
Pay careful attention to where your presentation receives the most interesting and the most difficult questions.
Be open to constructive feedback.
Adapt future presentations to improve in areas, which are identified as weak or require more information.
Whether your interests lie in acquiring capital, exploring new business partners, or simply expanding your market horizons, Silicon Valley remains the premier locale for high-tech business opportunity.
Links to Business and Financial Publications
http://www.jointventure.org/ – Joint Venture: Silicon Valley Network. Public-private partnership provides analysis and action on issues affecting the region”s economy and quality of life.
http://www.pwcmoneytree.com/ – MoneyTree Report is a quarterly study of venture capital investment activity in the United States. As a collaboration between PricewaterhouseCoopers and the National Venture Capital Association based upon data from Thomson Financial, it is the only industry-endorsed research of its kind.
http://www.redherring.com/ – Red Herring magazine is an Internet technology and financial news magazine, sponsor of technology business conferences and publisher of financial research papers.
Venture Capitalists and Angel Investors
VC firms in the Silicon Valley Area
Venture Development Firms (American and international)
Angel Investors
Legal companies
Wilson Sonsini Goodrich & Rosati
Auditing, Risk-related services, Tax, and Accounting
Ernst & Young
PricewaterhouseCoopers
Commercial Real Estate Leasing
CB Richard Ellis
Banking
Comerica
Executive Recruiting
Korn-Ferry
Starting a Business in California
When starting a new business, there are many important decisions to make and many rules and procedures that must be addressed. While there is no single source for all filing requirements, the following steps can assist you in starting your business.
It is helpful to begin with a business plan. A business plan is a blueprint of every aspect of your business. Sales, Marketing, Advertising, Promotion and Location are just some of the aspects of creating a plan. Click on the following link to the US Small Business Administration to find a tutorial on how to create a business plan.
If you would like help deciding on a location for your business, visit the Websites of California”s Regional Chambers of Commerce .
Choose a business structure. Select a business entity type from the following list for a brief overview of the principal types of legal business structures available in California. A legal representative and accountant should be consulted before making a determination as to the type of business entity to form.
Sole Proprietorship
Corporation
Limited Liability Company
Limited Partnership
General Partnership
Limited Liability Partnership
Your next step will be to file your tax and employer identification documents.
Most businesses require licenses or permits in order to operate. Please click on the following link CalGold to determine if your business requires any licenses or permits. If you do need a license, you can find, fill, submit, and archive license & permit applications, on all governmental levels at the following web site: http://www.businesslicenses.com/
Resources for Companies Interested in Opening a Business in the Silicon Valley
Government organizations
http://www.sba.gov/ – US Small Business Administration. SBA offers counseling, assisting, and protection of small businesses interests.
http://www.calbusiness.ca.gov/ – California Business Portal. Sponsored by the California Economic Development Partnership, this website provides a portal to a number of resources for starting, growing, financing, expanding, or relocating a business in California. There is also a lot of practical information on foreign investment in California.
Non-profit Organizations
http://www.nacwest.net/ – The Netherlands American Commerce Network provides a common business platform for Dutch/American business. At their web site you can find specific information related to import-export between the countries, contact referral database, and access to Dutch-American business forums.
http://www.svcitd.org/ – The Silicon Valley Center for International Trade Development (SVCITD) provides small and medium-sized businesses with export and import training programs, trade leads and matchmaking, technical assistance and international trade counseling services.
Networking in Silicon Valley
As Porter (1998) describes in his book “The Competitive Advantage of Nations” the companies” critical factor to survive is much more the density of relations among them than any other factor. Software companies included in regional networks in Silicon Valley, California, are more flexible, dynamic, innovative, and have higher turnovers than their counterparts. There are several organizations in Silicon Valley that help high-tech professionals get connected with the resources and opportunities they need to be successful.
TiE
TiE, a not-for-profit global network of entrepreneurs and professionals, was founded in 1992 in Silicon Valley, California, USA. Although its birth name, The Indus Entrepreneurs, signifies the ethnic South Asian or Indus roots of the founders, TiE stands for Talent, Ideas and Enterprise. It is an open and inclusive organization that has rapidly grown to more than forty chapters in nine countries. TiE endeavors to cultivate and nurture the ecosystems of entrepreneurship and free-market economies everywhere, as it sees this to be the single most powerful instrument of prosperity.
http://www.tiesv.org/
The Churchill Club
The Churchill Club is Silicon Valley”s premier business and technology forum. The 5,000-member, nonprofit organization has built a reputation for dynamic, in-the-news programs featuring Silicon Valley CEOs, up-and-coming executives and national business leaders. The events regularly draw more than 400 attendees and give members the opportunity to network with the best of Silicon Valley.
http://www.churchillclub.org/
Joint Venture: Silicon Valley Network
The Organization provides analysis and action on issues affecting our region”s economy and quality of life.Our community has significant challenges to address if we want to preserve our standing as the world”s best platform for innovation and entrepreneurship.In 1992 a group of visionary people decided the best way to solve problems was to create a neutral forum, bringing together leaders from business, labor, government, the universities, and the non-profit sector to think outside the box and build creative solutions.
http://www.jointventure.org/
WorkIt
Jobs are found, deals are made, and money is raised because of the connections people have. WorkIt was created so startup and high-tech professionals can get connected with the resources and opportunities they need to be successful.
Each week subscribers receive an e-mail announcing high-tech networking events in the Bay Area. (You can subscribe here .)
Who Uses WorkIt? Any one involved in startups and high-tech! Entrepreneurs, venture capitalists, engineers, marketers, sales professionals, and people with great ideas. These successful people know the power of networking – that”s why they use WorkIt for their weekly source of event information. To learn about opportunities for sponsorship and advertisement on WorkIt, send us an email at info@workit.com.
