How International Founders Can Swoon U.S. investors
What you need to consider to scale in the U.S.
It is no big revelation that U.S. investors want to see potential growth and scalability in the businesses they invest in. Yet, it is deeply connecting with those businesses, their solutions, and their founders, that may make the difference in where they decide to invest. For international founders that have not had a chance to build a reputation and revenue in the U.S., they may want to put in the extra work to establish authenticity and integrity in themselves and their business. If they want to win the hearts, as well as the minds of U.S. investors, they need to structure their business, their pitch, and communication all in a way that will surely grab their undivided attention.
Preliminary Considerations
Before trying to secure funding overseas, international founders should ask themselves whether they really even need U.S funding to begin with. Globalization is the state of the world. There are funding opportunities that span far beyond Silicon Valley and N.Y. It may be easier to secure funding at home, even if a founder is seeking to do business in the U.S. some day. Why?
- It is easier for international founders to show revenue growth in their local markets. With this evidence and understanding, local investors may be more willing to invest.
- This applies to non-anglophones: it may be easier for international founders to pitch for funding, as local investors share their same language and communication style.
Legal Structure
After these considerations, an international founder may still want to secure funding in the U.S. This may open them up to opportunities to learn from and interact with experts from big U.S. start-up hubs that teach them how to scale even further. If this is the case, one has to consider the legal structure of their business.
U.S. investors are more likely to invest in U.S. based legal structures given the tax process is made easier. It is recommended that international founders structure their company as a Delaware C-corp, in order to exchange shares with its foreign entity. (Kan 2021) They also have to consider the legalities around what this means for their business: tax obligations, IP ownership, contractual obligations, share ownership, leadership structure, etc. They will need a lawyer who has expertise in U.S. corporate law. This will definitely be an added expense before moving ahead in securing U.S. funding.
Tell A Great Story
International founders need a great story about their businesses to compel U.S. investors to want to invest. These are some of the things they might want to consider when developing that story:
1) Include a unique selling proposition (USP)
International founders need to demonstrate that their solutions provide more value than what is already being offered in the U.S. market.
2) Find out whether the solution is needed / wanted
International founders need their product / service to respond to the needs of the customers in the U.S. This may sound like an, “uhhh duh,” type of statement. However, so often founders, in general, don’t ask, or tailor their solutions, to their customer base’s needs. International founders need to understand exactly what those are, before pitching a solution that no one in the U.S. wanted, asked for, or doesn’t quite fix their problems. Testing and simply asking what their potential U.S. customers might want from their businesses’ solutions may give them a better insight.
3) Create a great narrative
Great stories come with great narratives. International founders should take some time to think about their brand identity as it relates to the U.S. market. Particularly, they should think about whether their goals, values, mission, purpose, etc. matches those of their potential U.S. customers. This can be more complicated than what it looks. There are a lot of cultural differences in how an international founder may communicate their brand identity and story vs. how a U.S. founder would (refer to differences in the U.S. vs. France). It may be worth an international founder’s while to work with a content creator, familiar with the U.S. market, to tweak their story and communication to appeal to a U.S. perspective.
4) Include great projections
In addition to telling a great narrative, an international founder needs to provide U.S. investors with great projections. Given the founder wouldn’t have necessarily been selling yet in the U.S., these projections don’t need to be reflective of actual revenue. But, they do need to be realistic and show that one’s product / service can be financially viable.
Connect with U.S. Investors
International founders have done their research, picked the right investor(s) for their product / service, gotten an introduction, and now have a meeting with them. Now what?
Create a human focused, empathetic pitch that makes U.S. investors’ hearts melt.
U.S. investors ears will perk up if the “great story” that the international founder tells about their business, is shared with passion and honesty. International founders should want to build a connection with U.S. investors through the storytelling of their pitch. U.S. investors want to feel good about the product / service they could be potentially investing in.
International founders need to reflect honesty and integrity too!
U.S. investors don’t exactly need to know that an international founder has an answer to everything. It is more important to U.S. investors that they know that they can trust international founders. It is ok to reach back out with the answer to an investor’s question, after the fact, as long as the founder actually does that. It doesn’t matter whether they decide to work with that investor again. Having integrity is incredibly crucial to maintaining an international founder’s reputation amongst U.S. investors.
Close Funding
Reach out to U.S. investors with dates to follow up, or go over contracts. This needs to be done with a bit of finesse, otherwise investors might misperceive this action as pushy. International founders should follow up with their own goals, i.e. the date they would like to secure funding, and ask whether that aligns to their potential investor’s goals. That way, it makes it seem that the founder is working with the investor, instead the investor is working just for the founder.
