In 2014, the start-up Luca, led by the former editor of Afisha magazine, Eugenia Kuyda, became the first Russian start-up participating in one of the most prestigious business incubators of the Silicon Valley – the legendary Y Combinator.  Every year, more than 30,000 companies from all over the world send their application to participate, but only 100-200 are selected for the program. YC has a history of providing a spring board for companies like Airbnb, DropBox, Reddit, and many others. Surely, this accelerator invests small amounts of money for the development, but, more importantly, its support of companies serves as an endorsement for investors from around the world.

Luca, the application that helps users to choose restaurants using Machine Learning technologies, prompted an extensive discussion in the startup community, and stories about the company were featured in Wired and TechCrunch. Y Combinator helped Eugenia Kuyda’s Luca attract more than $4.5 million in investment from several US funds and become a pioneer among Russian tech start-ups conquering the United States. Since then, Russian entrepreneurs have been taking part in these prestigious American accelerators, 500 Startups, and Y Combinator: Wakie, Chatfuel, EasyTen, Visabot, Coub and many others.

Most Russian startup founders do not view Russia as a key market. The reason for this is simple, the volume of the Russian market does not allow companies to grow exponentially, and the consumer power of the population is small compared to the West and the USA. Entering the American market becomes a pivotal step for many Russian start-up founders, and showing good results in a highly competitive market in the states means almost guaranteed success on the way to international expansion.

But entering the American market requires substantial funding. According to Maxim Chebotarev, the head of the Internet Initiatives Development Fund (IIDF) and co-owner of Techmafia, a California-based equity free soft landing program, a full-fledged launch in the US costs about $1 million. This money goes to relocation, legal expenses, accommodation, team building, testing of hypotheses and marketing.  But, as a rule, at early stages (Preseed and Seed) entrepreneurs do not have even half the sum recommended by Chebotarev, so the issue of attracting American investments often becomes the most important one.

As Dmitry Zaruta, the founder of the EasyTen application, and a graduate of the 500 Startups accelerator, says: “Attracting investments is selling a stake in your company. Usually, sales are divided into B2B and B2C. Since your company is a business, and an investor is a professional (if not, run away), in search of earning a profit on your company, then the attraction of investments can be classified as a typical B2B sale. There is a ton of literature written on this subject, so let me focus on several of the most distinctive aspects of fundraising in the US:

1) All investors are on LinkedIn. Buy the PRO account – it will pay off.

2) For the Pre-Seed round (the earliest stage of the start-up is a prototype or the first revenue), a B1-B2 visa is enough, for later stages, you will need O1, L1, H1B.

3) Participation in one of the top accelerators (Y Combinator, 500 Startups, Tech Stars) is a good way to enter the market.

4) Your company must be registered in Delaware and be a C-corp

5) Communicating with the investor, remember: everything which is not “yes” is a polite “no”. If they want to invest in you, you will definitely feel that they are selling themselves to you. If you do not feel that, don’t waste your time and move on.

6) Do not ask for an introduction (to organize an acquaintance) with an investor from an entrepreneur whose company didn’t bring money to this investor. Especially do not ask for an intro from an investor who has refused to invest in you.

7) Raising the round in the US is a full-time job of one of the founders for at least six months. Be ready for this.”

Not all Russian companies manage to raise funding round in the US. So, in the spring of 2018 Maxim Kolpakov, the founder of the Wachanga application for young mothers, armed with a pitch-deck (a presentation about the startup) and growth indicators went to conquer the investors of Silicon Valley. After spending 2 months in California, meeting daily with potential partners, Maxim has so far failed to attract any US investments. “The main barrier for investors in the early stages is that we are not Americans. If you do not have an impressive technical advantage, then investors will prefer local players. In order to join a Silicon “tribe”, you need to move there for at least six months to develop a network.” 

Maxim Chebotarev agrees with this idea: “In the United States, it is necessary to change the positioning from a “Russian company” to a “global company.” In fact, nobody cares where you are from – the main thing is what kind of product you are making. An important factor of success is gaining media coverage, even several types of media depending on the purposes. Getting into the prestigious TechCrunch can help with the search for investment, but it will yield zero results in terms of sales of B2C and B2B. At the same time, the more publicity you have in American media, the higher the credibility among all market participants. There are a lot of startups and the first filter is the Google search for news. Traditionally, letters to partners and clients should have the phrase like “here are links to several stories that have been written about us.”

Making the best choice of PR agency to help a start-up enter the US market is a key task of the founder, and the price of an error in choice can be very high. We know a start-up that hired a Russian PR specialist from Silicon Valley to help implement the media launch strategy. The founder dreamed of being featured in TechCrunch, and the contract had a separate paragraph on the target media, and the price of services exceeded 100 thousand dollars. As it turned out, the PR specialist came up with a cunning move; she paid for custom articles to the contributors, and did not work with journalists and editions of target publications. So, the publications were there, everything looked beautiful in the reports, but in fact, the views rarely exceeded 5 thousand people, instead of the standard 600 thousand – 1 million views expected from an article written by TechCrunch.

Artem Goldman, a Russian entrepreneur included in the Forbes list “30 under 30” and the founder of start-ups Visabot and Legal Space, also doesn’t like to recall his experience of working with PR agencies in the US. “We hired the agency based on the recommendation of our friends, spent 30 thousand dollars, and did not receive anything. In the end, we lost money, time and finally did everything ourselves.”

What should Russian startups do to achieve their business goals through effective PR in the US?

According to Natalia Belkova, the director of the 4D Business Communication Agency:

Entrepreneurs usually don’t have enough time to do PR themselves. Moreover, it is quite a difficult task to research the market, offers, conditions, set goals in different time zones, and there is the language barrier. It is essential to find the time and energy to work with foreign consultants. According to our experience I can recommend to find the local partner who will fully make this communication. The best way is when a PR company is a part of international network. For example – GlobalCom PR Network unites 70 offices around the world. Its representatives are fully responsible for providing quality services to their partners in all markets, including the US and China. This means that you will be able to communicate with the Russian office, jointly develop a strategy, and set goals without wasting your time understanding the local mentality.

A successful PR case worked out by a high-quality agency solves a number of strategically important tasks in the field of positioning, forms attitudes and helps to achieve business goals. For example, the story of SimpliVity Corporation, a privately owned company that spent four years in stealth mode. The company provides simplified IT infrastructure solutions for virtualized environments. Smart Connections PR was charged with organizing and executing a public relations launch to bring the company out of stealth mode.

With a deadline of less than eight weeks, Smart Connections PR identified core messages about SimpliVity and its flagship product, an all-in-one data center in a box and planned a debut the week prior to VMworld, followed by a heavy media and PR push at the show. Smart Connections PR identified the core messages about SimpliVity and its flagship product, an all-in-one data center in a box and contacted relevant media and analysts to schedule three weeks of pre-briefings leading up to launch date. 

The company was introduced with five analyst quotes and a strong media presence. CEO Doron Kempel’s name was seen in articles including as Computerworld, Network World, InformationWeek, Infoworld, InfoStor, CRN, The Register, EETimes, SearchVirtualStorage, The Boston Business Journal,, CNNMoney, and in blog entries from Om Malik in Blogo Wogo, Cormac Hogan and Duncan Epping’s Forty pieces of stand-alone coverage along with hundreds of mentions in press release pick-up coverage followed the company’s launch.

What are the main reasons for such a successful campaign? Smart Connections PR set very exact goals: targets chosen carefully, and executing and securing coverage where it mattered, fine-tuning the content marketing & message to ensure it speaks to the audience. The quality of coverage was very high, with a majority of the articles about the company being published in tier-one publications and key influencer sites such as The Wall Street Journal, Dow Jones, InformationWeek, Computerworld, CRN, and The Register. Articles were focused on news, but also included analysis and discussions on trends, quotes from third parties, product images and headshots. 

Joanne Hogue, Partner & Co-Founder of Smart Connections PR:

We take a deep look at the startups with which we work and develop a plan to target key journalists and media outlets. We develop a pitch that outlines the value our clients are bringing to the market and reach out to the media; some journalists we have known for years. Relationships, a good pitch, and knowing the target media to reach, are key pieces in an effective PR campaign.

Setting goals and providing significant media results in all markets, including the USA, is a key task for all agencies that are members of the Global PR Network. 

Every year, thousands of start-ups from Russia are trying to conquer the US market, but only dozens are achieving positive results. Before deciding on the expansion, ask yourself the question “do you understand the market well enough, and if not – can you find those who understand?”

This post was published by Victoria Evdokimova for Business Communication Agency 4D, Russia