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Introduction

Before you seek venture capital in your home country think about the U.S. First. Too often foreign start-ups find themselves at a great disadvantage when they finally decide to expand to the U.S. That disadvantage comes in the form of little or no equity that remains to be available for U.S. venture capital.

The usual path for foreign start-ups begins with local angel investors that enable the start-up to develop the basic framework of its applications. Generally the start-up then seeks additional funds in further rounds of capital infusions to continue and develop itself. Generally by the end of round 3 or sometimes even earlier at the end of round 2, all available equity has generally been distributed between the founders and financiers. Rounds two and three are the time that the start-up achieves operational maturity and begins to grow itself. Traditionally, this is the time foreign start-ups express interest in entering the U.S. Market. This however presents a difficult proposition for the start-up.

In order for a foreign company to successfully enter the U.S. market two things are needed: plenty of available capital and local knowledge of the market. Different from an established foreign company that wishes to enter the U.S., the issue of available additional capital is even more important to a start-up which may not yet be profitable or even have a considerable measure of revenue.

The foreign start-up would then have to make one of several difficult choices. The first choice would be to request additional funds from the start-up’s current financiers. That may prove difficult or even impossible as requests for additional capital from existing investors are almost always a problematic issue and almost always meet reluctance from current investors. To resolve this, the start-up’s founders may find themselves selling the little equity they have left or giving up a majority stake if they managed to retain one. But that would only solve the capital issue. The issue of local know-how remains and would something the start-up’s foreign invesotrs will not be able to assist.

An alternative to the sale of additional equity is the dilution of current equity and issuance of additional stock in exchange for U.S. Based venture capital.

As a start-up your challenges are different than those of an established company. Our host of practice areas and services are geared specifically towards your needs as a start-up. You may think that as a start-up you cannot afford world class legal and business advise or you may think that it is too early to start thinking about these issues. This is where we step in and provide you with these essential services early on in your existence as start-up.

This allows you to address important issues that otherwise would have gone unmet, get assistance with the procedural technical aspects of operating a start-up to us so you can focus on building up the start-up instead

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