Startups usually begin with a dream… and a mediocre business pitch. While the product offering or service may be innovative, creative, and beneficial for consumers, without knowing the brand’s identity, most start-ups’ will fail before they even begin. Thankfully, there are professionals who specialize in helping international brands scale in the US. Episode 14 welcomes Brian Frumberg, CEO and Founder of VentureOut – a vehicle to help bridge the gap between innovators around the world and the opportunities available to them in the New York and San Francisco technology ecosystems.
ImPRessions Episode #14 Transcript
Jenn: New York City is a melting pot for innovative startups to build a powerful business empire. Entrepreneurs worldwide head to the Big Apple to launch state-of-the-art companies within one of the US’s largest technology ecosystems. However, leveraging a startup from scratch is never easy, and many get lost when uncovering their brand identity. Who will buy the product? What should the core messaging entail? And finally, how do I craft a pitch that will wow investors and get my business noticed? Thankfully, Brian Frumberg noticed a gap in the industry and founded Venture Out, an advanced platform that helps international ideas scale in the US. Brian, it’s a pleasure to welcome you today on our show.
Brian: It’s a pleasure to be here. Thanks for having me.
Kalli: Of course, of course. And Brian, before we dive into the main focus of our conversation today, can you tell us a little bit about Venture Out backstory and what inspired you to start the business?
Brian: Yeah, I would love to. And I’ll warn you, I feel like most people, when I hear that question asked, they spend some type of yarn about, you know, stars aligning. And then a unicorn flew by and inspiration struck and like, I stumbled into what I’m doing now.
Jenn: So no unicorns.
Brian: No unicorns. I mean, my four year old loves unicorns. His favorite color is Rainbow, apparently. Yeah. I didn’t know that it was a color, but it is. So, I was working in venture and at a firm called Gotham Ventures in New York City. And I was trying to figure out how to chart my path and sort of plant a flag and build a career. And I was introduced to some foreign founders in New York. And the more I dug into this world of like, like, startup expansion to the US, the more I learned how challenged it was and how there was really a lot of opportunity, opportunity because US money was not investing at all outside of the US when it came to early stage venture and I came from sort of a public equity research. Thomas Friedman World is flat, like obviously Capital crosses all borders background and so that was really strange to me and seemed like a really good opportunity to, as said, plant a flag. So I started an event series called Venture Out. We launched with an event on immigration reform and the startup visa, which still hasn’t passed because we haven’t passed significant immigration reform in the United States since the 80s and started hosting events, introducing really promising startups that we found outside the US to investors. And that didn’t work out because as promising and impressive and talented as these entrepreneurs were, what they needed wasn’t an introduction to an investor, but training, preparation and education on how to approach the market, how to get ready for raising money, how to start engaging with those investors, and so quickly pivoted to running one week intensive accelerator programs focused on all the things that a startup founder needed in order to break in successfully to the US and sort of start taking that journey.
And that was in 2012, 2013. And then it, you know, pretty quickly grew and morphed into the company that I run today. But that’s how it all started, sort of stumbled into it. And now we’re going to raise a fund early next year and, you know, sort of stumbling back into venture, which is where all of this really started.
Jenn: Right. So, when a company comes to you, an international company, and they’re like, “Brian, I need your help. Like, I want to I want to make it here in the US. I want to make it here in New York City” from most of these companies. What is the biggest issue that you see these startups face in their beginning phases?
Brian: So we are working with companies that are expanding to usually their first new market companies are not doing this in like the earliest founding days of their business. If they are, it’s a mistake. And that’s sort of the information that we share with them. When you’re coming to the US, the US is going to be the most expensive and competitive market that they’ve attempted to launch into. So they need to have some type of semblance of success at home. You don’t want to try to figure this out for the first time in a market where you have limited knowledge, limited network and the costs and risks are the highest. And so we’re starting with companies like our ideal company has some kind of product market fit at home, and then we’re working with them to really figure out how do we replicate that product market fit for the US. Now, I think that the biggest challenge companies face is they come at the wrong time and that’s on both sides of the maturity scale. So either they try to come too early when they’re not really ready and that can really spell disaster not just for the expansion, but for the broader business. But also, I think a lot of the time companies think they need more than they do in order to start really coming to the US. And, you know, like the number one piece of advice that I give to companies that we meet with that aren’t here yet or haven’t started that journey yet, is the US is a very transactional marketplace. New York specifically is like 50% immigrants, both residents and people working in the city. And so selling here, you’re just another New Yorker with an accent and that companies really should start as soon as they can, trying to sell into the US, figure out the time zone thing. Just start targeting customers here and learning from that process because it really is about sort of testing and then learning and pivoting and testing and learning and pivoting.
Kalli: That’s really interesting. And I know that messaging is often one of the first steps in branding company, you know, when they’re trying to figure out who they are and how to say what they do. But it also can be one of the most challenging aspects. What should startups consider before marketing their brand identity?
Brian: So that’s a great question. I really think the answer is, is about the authenticity of their brand identity. Like when a brand is truly authentic. That is what I believe really grabs people’s attention. You know, people want to align with brands they’re working with or purchasing from, and most are just especially the ones that, you know, for startups where there’s sort of this assumption that you shouldn’t invest too much in in marketing and branding, they’re just the identity is shallow and there’s a lack of meaning and authenticity.
And this is something that doesn’t have to be expensive or a waste of time. Think the primary question that founders need to ask is why are you doing this? What is your why? As Simon Sinek is has put it, and then really tried to build the story and the identity around that. That’s something that really can resonate with people. One thing that I talk a lot about is how we want our founders to try to emotionally engage their audience. And this can seem harder for some than for others, right? Like if you’re a consumer brand or your’re saving lives and the health tech space, or you’re educating the underserved and the education technology space, that can seem pretty easy. And for companies that are doing like enterprise hardware or software, it’s like, man, how could I ever have a story or a pitch that will engage emotionally when looking at these others for whom it is a lot easier and honestly like it, it’s always possible. It’s always possible to find real meaning. So like literally last week we were working with a group of companies from Saxony, Germany, which is like one of the semiconductor and silicon like capitals of Europe, like 1 in 3 semiconductors are developed in that region. And we had a company that was developing new innovative chips for like core infrastructure. So think electrical grid and water maintenance, public works. And like unless you work in one of these fields, this is completely irrelevant to you. But what they’re actually enabling is a smart grid and they are bringing current infrastructure which like in the United States, is so far behind.
Jenn: I was just going to say, that is something New York needs so badly.
Brian: Honestly, I don’t think there’s any place in the US that is doing this. Well, it’s a it’s a problem. And when you talk about like the security risks, especially cybersecurity risks of the US, like experts always have on the top of their list the insecurity of our infrastructure. And so what their devices are doing is basically taking legacy systems and making them smart. And like long term, what that helps avoid is blackouts, which like if you’ve lived in New York long enough, you’ve been scarred by one like two.
Jenn: Remember the big one and what was like 2002 or something where what was it like 13, 14 hours of just complete blackout here.
Brian: During Sandy, my building was out of power for over a week.
Jenn: Oh, forget it, Sandy. Yeah, forget it.
Brian: Yeah. Like, I remember sitting in my apartment on the 26th floor with water in our tub so we could boil it and, like, a lot of candles. So what a way. Like, if you can connect with someone that’s ever experienced that or is aware of how bad that can be and wants to avoid experiencing that, that is like emotional, that’s an emotional grab. And so for them, it’s like talk about this problem, talk about how you’re you’re the solution to help avoid that. Now you’ve emotionally engaged your audience. And so I think really focusing on why founders are doing it, trying to figure out how to tell a story that emotionally engages. It’s harder for some than for others, but it’s possible for all of them. And so I think, you know, like brand identity, depth and authenticity is is a big challenge. And it’s one that we work a lot with our companies on even at the earliest phases.
Jenn: Are there any stipulations you have, like if a company comes to you and you can just kind of sense the BS and you’re like, You know what, this is not going to work here in New York, do you ever run into that?
Brian: Like more than half the companies we work with. We are not selecting or choosing because we run sponsored programs in partnership with like 40 different government agencies around the world. And so they’re often I mean, the group from Saxony. Last week we were working with our partner in New York, the German American Chamber of Commerce, and they were connected with Saxony Trade and Invest. We actually had the governor of the State of Saxony, which in Germany is not called governor, it’s called minister. President was actually with us. And I’m not talking about that because any of I didn’t feel that way about any of those eight amazing companies that we had last week. But really more to paint a story that we’re not always choosing who is coming through. And so that does happen a lot. Both companies where the story they’re trying to tell doesn’t work. But also companies where we’re pretty confident the product isn’t going to work here. That product not working is less common and it’s usually not like wholesale, like give up and go home. It’s more this is how we can pivot to make this work here. But people are bad at messaging like we meet. We meet people that are trying to pitch something and what we think is a pretty bad way all the time. I remember in my earliest days working in venture at Gotham, we had a company coming in pitch and I was quiet the whole time and didn’t ask any questions and we had a debrief afterwards with everyone that was in there and listened. And Thatcher Bell, who has become like a mentor to me, asked me what I thought. And I had a lot of critique and I didn’t think the company was going to succeed. I definitely didn’t think we should invest. And then he asked me like, why didn’t share that in the meeting? And I said, Because I didn’t want to hurt the founder’s feelings. And he made it really clear to me that, like, hurting feelings is, is is our job. And that if we know something that can help a company avoid future failure, if we see something they don’t see that for whatever reason means that what they’re doing today won’t work. By not sharing with them we’re that with them, we’re doing such a disservice and that very much our job is to be really transparent, even when that transparency can be brutal. And, you know, for founders of early stage companies like these businesses really are their babies. And so it’s hard to tell someone that their baby is ugly, but it’s kind of the gig. It’s like, right. And for venture, you know, like you’ll meet with a thousand companies you’ll invest in, in, in like 5 or 10. Like most venture funds in New York are meeting with like a thousand companies a year. So mostly you’re meeting with companies that you don’t invest in. Reasons for not investing aren’t always because you don’t think it’s a good idea or that it won’t work like a million reasons beyond that. But sometimes it is and it’s important to share that. And so we always have to say that. And when we’re talking to government partners, a lot of like, we’re not trying to tell this, convince them that we’ll be able to help all of their startups come here and succeed. Very much the opposite. A lot of what we share with them is that the second best outcome with the first being succeeding in the market, the second best is avoiding failure, is meeting a company that’s not ready to come here now and telling them that because if that company does come here and the challenges that they face, you know, sort of like getting stuck in the quicksand of the US and trying to make something work, that that really never had a good probability of working because they weren’t ready. That is our second-best outcome. We’re saving them potential failure of their business by advising them to not do something now, to wait or to not do it at all. And so, like the way the answer to the question is we like, how do we deal with it? We tell them we’re super upfront and like, we’re not telling them that in a brutal, honest way. I think we, you know, sort of explain a lot of the reasoning behind why we think something will or won’t work or why specific kind of message will or won’t work. But at the end of the day, we have to be really clear about how we feel and why we think it won’t work. And it’s just it’s really important. It’s an important responsibility for anyone working in like at accelerators or in venture at all.
Jenn: Absolutely. And you know, Kalli and I deal with that, too, from a PR perspective. I mean, we have clients that might come to us and have this idea or have this particular audience that they’re sure is their target market. And same thing, you know, we would be doing them a disservice to not want to hurt their feelings and just say, okay, yeah, that’s a great idea. We’ll do that knowing it’s going to fail. You know, they hire us for a reason. We’re experts in PR, We know the media, we know the landscape. We know how to drive their product, their brand awareness. So it’s really the same thing from our perspective at an agency. Say, and I know you mentioned before about the acceleration programs. So venture out helps startups and government organizations. I want to know a little bit more about what that entails.
Brian: So yeah, so we have two practices. We have an international practice where we serve foreign governments and agencies, chambers of commerce. Often it’s like a venture capital fund abroad that has a portfolio of companies or a subset of their portfolio that they want to help come to the US. And then we have a startup practice where we build programs and offerings that we offer directly to companies that we want to work with. And I made a decision in the earliest days of venture out and in 2013 that we would not be solely a government service provider. And the reason is because, like what I mentioned before, where in those programs, a lot of the time we’re told which companies we’re going to work with. I don’t need government telling me which areas of tech are going to be trending and important and matter. And I always wanted to be able to make those decisions for ourselves and choose sectors of, you know, within tech and the startups within them that we really wanted to work with as sort of like a sandbox for us to play with and learn. Like every time we run a program in a new area, we learn a ton. You know, like the first time we ran a cyber program or a Smart Cities program, we are assembling like a lot of the thought leaders in New York City, from people working at corporates to startups to to investors in that space, people that are in it 24 over seven and just gleaning as much as we can. Right. In much of the way our startups gain value from our programs, we do as well. And so that’s just a sort of split. We have those two different sort of practice groups within the government. One, every country region within a country wants the next Google or Facebook to come from there, and that’s because of the impact it has economically, because of the impact it has on their innovation ecosystem and inspire a new generation of entrepreneurs. From there, it drives new investment into into that community. And so how do we help these companies grow in scale to be able to to hit that kind of success? And a lot of times it’s coming to the US and that is because the US is the largest capital consumer and enterprise marketplace on the planet. So if you’re trying to raise there’s more capital here than anywhere else. If you’re trying to sell, there are more customers here than anywhere else until, you know, China tips the scale in some industries. So we build programs to partner with these foreign governments to create a bridge, to create a bridge for their companies, to find an easier path to success in the US. And these programs start with us going in market to those countries and running education, slash inspiration programs for larger audience, and then recruiting companies that are ready to come to the US to explore. And for those ready to explore, we have a one week intensive program where the sort of meet all the people and learn all the things they need to learn to go home and start really preparing over the next, you know, three, six, 12 months for that eventual expansion. And then for companies that are really ready, we have a three month program where we’re actually paying as part of that program, we’re paying for their incorporation. We are helping them figure out immigration. We’re getting them a bank account and we’re helping them sell. And for those that are ready, we’re helping them put together a fundraising strategy and start reaching out to investors and really trying to help them hit the ground running and and find their initial traction. That can lead to, you know, the next stage of success for them in the US. The next phase of that for us is a fund is actually being able to put our money where our mouth is and invest in these companies and to help them to do that. Yeah, I’m hoping we’ll launch Venture Out Ventures in Q1 2024, but that’s how we do that.
Kalli: That’s amazing. And you know, speaking of obviously startups need, you know, they need investors and they need capital. Obviously, they have to leverage these opportunities through a pitch As this is your particular expertise, as you’ve helped so many companies launch in the US and raise money, tell us what makes a pitch successful.
Brian: So that’s a pretty big question. There are a lot of answers to that. I’ll focus on one that I talk about a lot. For anyone that like looks at building a startup pitch, there’s like a pretty tried and true format to it, which is you introduce yourself, you talk about a problem, you talk about your product, the solution, you talk about the size of the market, your traction, then your team, and then you have an ask, which is raising money. And we always are telling people, don’t just ask for money, like ask for introductions depending on who the audience is. But that first part is really the critical part. It is problem and solution. The reason why I think this is such an effective way to tell a story and to pitch. An idea, a product is because in the way that it engages your audience to go from not caring about what you do to yearning for the solution you’re supposed to be providing. And so when someone pitching does a really good job of explaining a problem, what they’re essentially doing is creating dissonance. They’re saying, Look at this problem. This is a problem that affects this many people. It affects this many companies. This is how much money it’s costing them. These are like the myriad of issues that come from that. Like this picture of the world is terrible. It needs to be fixed and people are in the audience. And if you’re doing this effectively, they’re thinking, wow, oh my God, that is a problem. Even if it doesn’t affect me. Like for whoever has that problem, that really sucks. And like, man, I really hope that they fixed this right? And that’s them hoping that your solution is good and yearning for it to be right. It’s wanting the resolution of the dissonance and then pitch the solution in a way that solves the world’s problems. And everyone can let their shoulders down and relax and go, Oh, okay, thank God the problem has been fixed. You know, getting also back to sort of like emotionally engaging your audience. That’s that’s why I think that story arc works so well. And then after you sort of give that solution, you just really anchor it with. And this is the size of the market and this is the traction that we’ve already had. So we’re already doing pretty well. So you can trust that we’re actually going to be solving this or we are solving it today, you know, help us solve this problem for more people by giving us money and allowing us to grow. That’s why, like there are a lot of people I’ve seen a lot about people actually saying that that sort of problem solution and no, it’s not clever. Oh, it’s it’s like overplayed and overused. I don’t think that’s the case. I think that if you do it well, it is just a really good way to engage your audience and get them from not engaged or caring about what you do to yearning for the solution that you are providing.
Jenn: I definitely agree. And I think, too, when it comes to a pitch like in PR, you know, we pitch something out to the media. We have to know about that reporter We have to know about the type of people that that reporter write stories for. And we have to get creative sometimes and sort of craft that right message so that they will read our pitch and consider maybe interviewing our client or running a specific story about their product or their brand. So in the case of a startup, what are some ways that you think they can identify their target audiences to properly craft their brand identity?
Brian: Great question. I think the first thing is to admit that a lot of the time they don’t know who their actual target market is. And this gets to this process of trying to figure out product market fit. And so we’re always coaching companies to be lean, which is get like the first version, you know, your minimum viable product, your MVP out to whichever audience that you think is the right audience, and then listen to what they say. I think the answer to the question is like an admission that you don’t know and the market knows. And your job as a founder is to go out and sort of test and listen to what the market is telling you. Where I’m asked a lot of the time, what are the character traits of the founders that we’ve worked with that have been really successful? And it really plays into this. And the answer is humility. And, you know, the humble founders that don’t come saying, I know we know what the solution is that’s needed. We know the problem that the market is facing. And we’ve built this thing in our lab and now it’s ready. And you’re welcome. Those people, like rarely make it all the way. It is people that have the humility to be able to go out and realize that they’re wrong sometimes and to learn, listen and learn and pivot. When you look at like the first version of a pitch deck for any big Silicon Valley tech company that you’ve heard of, it is very different from what they’re doing today and how they’re pitching themselves today. And so I think the first answer is to go out and test and not assume that. You know, the other answer is that I think that most people do an inadequate job of targeting. I think that like, we’re meeting with companies all the time and they think that they you know, what they come to us with is we know we’re trying to meet with people that work at these kinds of companies with this kind of title. The same thing with fundraising mean we equate fundraising to sales all the time. It is you know, you’re selling the equity to your company and the buyer is an investor. But again, that’s not enough targeting, right? When you are running like really mature, sophisticated enterprise sales process, you’re developing true personas. You know, the, you know, average age gender makeup of your audience. You have a sense. Of what motivates them in their position.
What do they get bonus on? You want to know what the pressure points are that you can push on to try to get them on board with the thing that you’re pitching and selling. And so I think, you know, doing that kind of digging is is really important for us when it comes to fundraising. What that means is that we’re not just looking at investors at your stage in the region. We’re looking at, you know, what are the business models those investors are investing in, What are the sectors they’re investing in? You know, what are companies that look like yours but aren’t directly competitive with yours? And who funded those companies? Like that’s the level of of depth that we’re going into it because then you can reach out to somebody like the reason this matters, the reason targeting matters is because you can then reach out to someone with a message that resonates with them. Hey, Mr. Investor. Mrs. Investor, I know that you’re actively investing in smart cities and smart grids and artificial intelligence. Specifically, I saw you invested in Company A, company B and Company C, That is why I think you’re such a good fit for us. Let me tell you about my startup. That is the way we open up outreach to investors. No matter the company or the type of investors they’re going out to, because that in that first sentence, where we’re defining relevance and grabbing them and without doing proper targeting, you can’t actually do that.
Jenn: Oh, of course. It’s the same thing with pitching. I mean, and Kalli and I talk about this all the time because we do not do this here at our agency. But a lot of the bigger agencies, they do a tactic called spray and pray. They just take a pitch, send it out to a massive list of reporters. They don’t vet their work. They don’t even know sometimes what publication they work for. And even me, I’m on LinkedIn and I get messages sometimes from companies asking me to do certain things. And I’m like, did you even look at my profile? I work in PR, I have nothing to do with what you’re asking me. So I totally, totally agree. It’s really the same concept.
Brian: Yeah, and I’m on the receiving end of a lot of those things as well, especially on LinkedIn. Yeah. Um, and I think to like, maybe dial in a little bit more, there are some markets where spray and pray like there are times and circumstances where spray and pray actually is a method that can work like, but it has to be done right. So maybe a good example of that is like the targeting was just explaining of, you know, we’re going to find the industries and the keywords and even some portfolio companies that an investor has invested in, like we do that across a database and mass and then will help a founder reach out to 1000 or 1500 investors. With that outbound, you’ll have a lot of people that will tell you not to do that because you should be digging in and getting even deeper than that with every investor you reach out to and looking at their portfolio and looking at their social media. And I, I don’t disagree with that. I just think that from an efficiency standpoint, that’s really hard to do. And so we will reach out with this sort of targeted spray and pray, right? So we’re going to reach out to 1000 investors, which by definition is a shotgun spray approach. But with at least going out and saying, we know you’re investing in these areas right there.
Jenn: Right, so there is still relevance.
Brian: And it’s not one, it’s always multiple, right? Like the way we do this sort of we build these cascading searches that overlap with the they have overlapping results. And then what comes out of that is like a dedupe list where I can reach out to an investor and say, I know you’re investing in these two industries. These two keywords I’ve identified are related to my company and this one or these 1 or 2 companies, and that’s our version of Spray and Pray. And then when those when those investors that are interested reply right. When they engage, then before that answer, then we go really deep. And so, you know, we sort of spray out with as targeted as we can get. And then when and then when we have someone from that audience comes back and engages in some way, even if all they say is no, they’re engaged. And then we go and we look at their social media presence and we look deeply at their portfolio and we make sure that our follow up from there is really deep. And that’s a lot of the process that we use to help companies with gaining initial traction with US customers and with US investors. But that like broad, mean like I’m getting outreach on LinkedIn, you know, asking about helping me with raising my next round of capital. And it’s like, bro, I’m not a startup.
Jenn: Right, right, exactly.
Kalli: You have to definitely be really targeted with that. And, you know, if you if you put in the work beforehand and again, it comes back to efficiency, even if you’re sending a note to a thousand people, you know, is it a thousand people that like actually might open your email or is it just like a thousand people that have emails like, you know, and that’s really what the difference is. And, like you said, you know, once somebody responds back, you know, that’s when you can take the time to really dig deep and dive into it. You know, you already know that you have that interest. So it definitely is going to be worth your time to do that all that legwork.
Brian: Exactly. Yep, exactly. That’s exactly.
Jenn: Right. Venture Out has helped over 1200 companies, raised over 5 billion in capital and created over 15,000 jobs. I think it’s safe to say you certainly know what you’re doing when helping brands build personas and develop core messaging. Brian, thank you so much for joining us today.
Brian: Thank you.
Jenn: For our listeners, thanks for tuning in. And don’t forget to drop us a line anytime at email@example.com. Bye for now.