Silicon Valley is known as the high-tech capital of the world, and deservedly so. The region is home to many of world’s largest high-tech companies and thousands of startups. It accounts for one-third of all of the venture capital investment in the U.S., and that attracts hopeful entrepreneurs from around the globe.

“It’s like some sort of a Darwinian natural selection process because only the best entrepreneurs will succeed,” says Enis Hulli, Associate Partner with 500 Istanbul, an early-stage VC fund within the 500 Startups network. “Once you’re there, there’s unlimited access to capital and other resources vital to build a global business.”

Silicon Valley may be geographically located in the U.S., but it’s a truly international community.
A study released by the National Foundation for American Policy (NFAP), a non-partisan organization which does research on trade and immigration, found that over half of $1 billion startups are founded by immigrants. Collectively, these companies are worth $168 billion and employ over 33,000 people.

“Entrepreneurship is all about passion and perseverance, and immigrant entrepreneurs are the most hungry for success,” adds Hulli. “That’s why many of the big companies in the U.S. are built by immigrant entrepreneurs. 500 Startups launched microfunds in countries like Turkey,  Canada, Japan, and Mexico to find these entrepreneurs and become the bridge connecting them to Silicon Valley.”

500 Istanbul is part of the 500 Startups global venture capital seed fund that has invested in 1,800 technology startups all over the world since its inception in 2010. It manages over $350 million in committed capital out of four main global funds and 13 region-specific / sector-specific microfunds, including Istanbul.

However, Hulli’s mission is not just to connect entrepreneurs to VCs in the U.S. He says there are a number of entrepreneurs and startups throughout Eastern Europe that do not have the resources, or desire, to relocate to the U.S.

“An entrepreneur should go wherever the biggest market is, whether that is India, China, Africa or Europe,” he says. “That’s why our bigger vision is to help make Istanbul the startup hub of the region. Istanbul is a great place to build a product and conduct angel tests with different segments at scale.”

Achieving that vision means Hulli spends about six hours every day in meetings. In just over a year since the Istanbul office opened, he’s sat through over 800 meetings and looked at more than 2,500 potential deals.

It is notoriously difficult to strike a deal with Startups 500. The company’s web site boasts that “it’s tougher to get into 500 Startups than Harvard, MIT or Stanford,” and entrepreneurs who meet with Hulli will find he is just as selective. Of those 2,500 deals presented by entrepreneurs and executives with early stage companies, only 25 have struck deals with 500 Istanbul.

“Fundraising is a priority for us, but even more critical is managing that capital and investing it wisely,” says Hulli. “Generating good returns is vital can be a turning point in building our ecosystem and attracting investor appetite.”

Hulli divides all companies he meets with into two categories: Red Ocean and Blue Ocean.

Those in the Red Ocean are trying to enter an established market with lots of strong competition. They see an opportunity because they’ve come up with a new approach to solving a problem. Those companies need to demonstrate to Hulli that they have already achieved some traction with customers.

Blue Ocean companies are those that are trying to create a new product category or market segment.

“Here we are taking a bigger market risk, but these companies can become a category or even market creators, and these are the exciting ones,” explains Hulli.

Hulli cites Whole Surplus as an example of a company creating a new market: food waste management. The company’s founders want to reduce the enormous amount of food that ends up in landfills every day. Globally, one-third of the total food produced goes to waste, which creates environmental and social problems, and leads to 2-5% margin loss for retailers, wholesalers and manufacturers. Whole Surplus not only coordinates the collection and donation of food that can’t be sold, it provides real-time data analytics solutions to help companies more efficiently manage surplus and save money.

Sitting through 800+ meetings means it’s going to be hard to show Hulli something he’s never seen before. So, I asked him how a company can make its presentation really stand out in his mind. He says he’s still amazed by the revolutionary ideas he sees. But just as important as having a great idea is demonstrating self awareness.

“If your company is in the Red Ocean, but you think you’re in the Blue Ocean, that’s a red flag,” he wants. “You must know your market and any competition so you know all of the challenges you will have to overcome,” he says. “As a venture capitalist, those are the key factors I consider. The entrepreneur should do much more research than us, and should know better.”