Stop half-measuring: why day-one U.S. presence is your only shot at building a global winner
Most advice about U.S. expansion focuses on timing: “When should you enter the U.S. market?” This is the wrong question. The data shows that in today’s global technology market, you’re either born with a U.S. presence, or you’re fighting an uphill battle that becomes steeper with each passing month. The success stories are clear: companies that treat the U.S. as their home market from day one build category leaders. Those that delay build acquisition targets.
Market Velocity: Speed Kills Competition
The raw numbers tell a compelling story. The U.S. software market stands at $315.24 billion versus Europe’s $230 billion. But this surface-level comparison misses the crucial point. The real story is in the growth rates: for the next 4 years alone, U.S. enterprise software spending increased at 13.5% annually, while Europe should be lagging at 5.0%. This differential isn’t just a statistic — it’s a kingmaker. And that’s even before you incorporate the geographical/cultural complexities of expanding throughout Europe.
Consider what this growth gap means in practical terms. A SaaS company starting in the U.S. market enjoys access to 50% of global SaaS revenue, while their European counterparts compete for a very fragmented 26%. But the implications run even deeper than market size. U.S. enterprises make purchasing decisions in weeks rather than months. They sign larger initial contracts. They’re willing to bet on innovation rather than waiting for proof in smaller markets.
The U.S. market’s superiority manifests in three critical ways:
- First, in sales cycle speed. U.S. enterprises have standardized purchasing processes for technology. They understand SaaS. They have dedicated software procurement teams. A sale that takes six months in Europe often closes in six weeks in the U.S.
- Second, in contract values. From previous experience in enterprise sales, I would say that average enterprise SaaS contract in the U.S. is at least 2x larger than its European equivalent (not perfect statistics). I wouldn’t say this is because U.S. companies are richer — it’s because they understand the value of moving fast and committing resources to digital transformation.
- Third, in market feedback velocity. U.S. customers give direct, immediate feedback. Most business users will put in their credit card to try your product and cancel quickly (one or two months top) if they’re not satisfied. This implied feedback loop accelerates product-market fit in ways that polite European rejection emails never will.
Capital Advantage: The Multiplier Effect
The velocity advantage directly translates into capital superiority. In 2023, U.S. venture funding reached $170.6 billion compared to Europe’s $45 billion. But focusing on these totals misses the structural advantage U.S.-present companies enjoy. The average Series A in the U.S. reached $18M in 2023, while European Series A rounds averaged just $8.5M (Q4 2023). That’s also an amazing opportunities for investors of European seed startups that then raise in the US.
This capital gap creates a compounding advantage that few founders understand until they’re suffering from it. Remember my article on trading the stock market last week? Well according to Bessemer Cloud Index 2023, SaaS companies in the U.S. trade at 12x revenue multiples versus 6.8x for European peers. This isn’t market inefficiency — it’s rational pricing of growth potential and market access.
Monday.com’s journey illustrates this perfectly. By establishing their commercial headquarters in New York while keeping R&D in Tel Aviv, they didn’t just access U.S. customers — they accessed U.S. valuations. Their public offering valued the company at $7.5B despite their Israeli origins. Compare this to European companies that often struggle to break $1B valuations even with similar revenue.
The fundraising advantage manifests beyond just amounts and valuations. When Israeli tech companies raise funding, 71% include U.S. investors. These aren’t just any investors — they’re the ones who understand specific verticals deeply and can make valuable introductions to potential customers and acquirers.
The implications extend to exit opportunities. In the last five years, U.S.-based tech acquisitions have averaged purchase prices 3.2x higher than European acquisitions in similar verticals. This isn’t coincidence — it reflects the strategic value of having an established U.S. presence and customer base.
Talent & Organization: The Winning Formula
Here’s where market velocity and capital advantage come together to create organizational imperatives. Most European companies make a critical mistake: they try to run U.S. sales from Europe, or they wait too long to establish senior presence in the U.S. The Israeli ecosystem, with 94 unicorns from a country of just 9 million people proves there’s a better way.
For us, the winning formula is clear: Keep R&D in Europe, where deep technical talent is abundant and efficient, but move commercial operations and key decision-makers to the U.S. immediately. The data supports this approach: 86% of Israeli software companies that reached >$100M valuation had U.S. operations within their first two years.
This split structure works because it leverages the best of both worlds. European engineering talent is exceptional and often more cost-effective. European R&D teams show higher retention rates and deeper technical expertise. But U.S.-based commercial teams understand the market innately. They have the networks. They speak the language of U.S. enterprises not just literally, but culturally.
This isn’t just about sales — it’s about building a U.S.-native go-to-market motion. When product decisions, customer development, and go-to-market strategy happen close to your largest market, velocity increases exponentially. You start building what U.S. customers will buy, not what European engineers think they should use.
The Path Forward: Time is Your Enemy
The market is moving too fast for half-measures. Every month spent “preparing” for U.S. expansion is a month your future competitors spend building their lead. Every quarter focused solely on European customers is a quarter you fall behind in the market that matters most.
The evidence is irrefutable: Market velocity creates capital advantages, which in turn enable the right organizational structure. The Israeli ecosystem didn’t just stumble upon success — they engineered it by understanding this chain reaction. During the time European founders spend debating when to enter the U.S. market, their future competitors are already building there. During the months spent “preparing” for U.S. expansion, American companies are closing deals, raising capital at higher valuations, and building insurmountable leads.
This isn’t about expansion — it’s about survival. Your choice today determines if you’re building the next category leader or its future acquisition target. The U.S. market moves too fast, the capital gap is too wide, and the talent advantage is too significant to overcome with a delayed entry strategy. The next Monday.com, Wiz, or SimilarWeb won’t start as a European company that eventually succeeds in America. They’ll be born as an American company that happens to have exceptional European DNA. The only question is: will that be you?
OVNI Capital specializes in bridging the gap between European deep tech innovation and U.S. market leadership. We partner with visionary entrepreneurs to build global category leaders by bringing their breakthrough technologies to the U.S. from day one. Our investment strategy is rooted in systematic co-investments with leading U.S. and European funds and leveraging our extensive network of LPs in North America.
At OVNI Capital, we don’t just fund companies; we empower them to transcend borders and redefine industries.
