Your startups wants to operate in the United States, who should move first?
This article was originally published on the Jamae Law Group blog.
Many non-U.S. based startups decide to move to the U.S. In fact, it was recently reported that immigrants founded half of the top U.S.-based startups.
There are a lot of good reasons to at least have a presence in the United States. The talent pool in cities like San Francisco, New York, Austin, and Boulder are amazing. U.S. investors are savvy and have a ton of investment money. The US has a huge potential base of consumer and business customers with money to spend. And, the startup ecosystem, especially in the San Francisco Bay Area, is unsurpassed.
After deciding on whether the move to the U.S. is right for you, you have to decide who within your company is going to move over first. Whether you have a small two-person startup, or a 200-person scaleup, this can be an extremely difficult strategy decision.
In talking to a number of startups, I’ve seen three primary strategies:
- Hire someone in the United States
- Send a sales or marketing person to the United States
- Send an executive or founder to the United States
Each strategy has its pros and cons, so let’s take a closer look at each one.
Strategy 1: Hire someone in the United States
One thought that some people consider is to hire a U.S.-based business development or operations person to get things going there. The idea is that since they’re from the U.S. and they know the culture, they will know how to build out the organization.
Unfortunately, from my observations, hiring a U.S. representative is generally a really bad idea.
Unless the U.S. hire has spent a significant amount of time with your executive team and has a deep understanding of the business and the company DNA, this is often a recipe for disaster.
This person will be talking to customers, talking to the press, hiring people, and brokering deals. If they misrepresent your company, make bad decisions, or define the wrong culture, you might be spending a lot of time and money trying to rectify the problem.
In the worst case, it can cause the death of your death of your company.
If you choose to go down this route, make sure that the U.S. representative works with you for at least 6 months and make sure you have a solid plan of action for everything they’re going to do in the U.S.
Ideally you should consider hiring them as an executive in your business. If you’re not willing to hire them as an executive, then you might want to reconsider allowing them to make executive decisions on your behalf halfway across the world.
Strategy 2: Send a sales or marketing person to the United States
Another common strategy companies use is to send a non-executive, such as a sales or marketing person who is capable of running meetings, sales, press, partnerships, etc. Often times, this person has an engineering or computer science background, knows the product inside out, and can communicate effectively with clients.
Sending a business-focused person to the U.S. first makes sense from a business perspective. For example, a technical sales lead can spend a few weeks setting up the business infrastructure and then dive into doing business development.
Having a salesperson move also allows the company to gauge the ROI of opening up a U.S. office, or to test whether it makes sense to relocate the entire operation to the U.S.
The other benefit is that the technical sales lead doesn’t necessarily have to fly back and forth to the home country frequently. If their sales territory is the US, they can mostly stay in the US and do business development there.
The downside of moving any non-executive role first is that they don’t necessarily have the skill set or leverage to do all the tasks that you might need to get done. For example, they might not be able to help with raising money, discussing strategic partnerships, doing media interviews, or hiring key people from other departments. Those activities are often performed by a founder or executive team member.
Even if the sales lead is capable of accomplishing those tasks, a founder or executive team member would have to review every decision, making it difficult for them to be efficient and effective.
Strategy 3 —Send an executive or founder to the United States
Another strategy that many startups explore is to move an executive over first. This is often the CEO, but sometimes it is another executive team member.
An executive can also set up the operation and start doing all of the activities necessary to start a new operation in the US. They can meet with investors, press, partners, etc.
The challenge with moving any executive over is that it will split the executive team. There has to be a tremendous amount of trust and communication in place for that to be a successful strategy. The executive will almost definitely have to fly back and forth to make sure they’re getting enough face-time with their team.
So what’s a startup to do?
Before you decide, there is one more thing to consider: U.S. immigration challenges. It’s not quite as easy to send a technical sales lead over to the U.S. as it is to send an executive.
Immigration challenges of sending a non-executive to the United States
I spoke with U.S. Immigration Lawyer Elizabeth Jamae about the challenges involved in moving different roles to the U.S. She said that a popular visa for moving people over is the L-1 visa, but that moving a non-executive over on this type of visa can be tricky.
The U.S. Citizenship and Immigration Services website tells us:
“You may be eligible for an L-1 visa for “intracompany transferees” if you are an executive, manager, or a worker with specialized knowledge who has worked abroad for a qualifying organization (including an affiliate, parent, subsidiary or branch of your foreign employer) for at least one year within the 3 years preceding the filing of your L-1 petition (or in some cases your admission to the United States). The organization must seek to transfer you to the United States to work in one of the capacities listed above.”
There are two types of L-1 visas:
L-1A — Intracompany Transferee Executive or Manager
L-1B — Intracompany Transferee Specialized Knowledge
The L-1A visa is generally available to an executive/manager who can “make decisions of wide latitude without much oversight” and who can manage people or divisions.
Elizabeth tells me, “A founder can pretty easily qualify for an L-1A visa, but a sales or marketing person who is not a manager or executive wouldn’t qualify.”
So how can you get a sales or marketing person over to the U.S.?
Unfortunately, it isn’t so simple, unless they have a fairly technical background.
The L-1B visa is reserved for people who have some sort of specialized knowledge around your company’s product, service, or other interests. These are usually employees with some sort of technical expertise or knowledge.
Elizabeth say, “It’s more challenging getting a sales or marketing person over on an L-1 visa. USCIS has traditionally ruled a sales or marketing role as inherently non-technical. Your immigration attorney will need to structure an L-1B application to accentuate the technical background of the applicant. They’ll also need to demonstrate that the applicant’s technical knowledge is directly linked to the company’s financial growth in the United States.”
Summary
While moving a founder or executive to the U.S. can introduce more complexity and create a split management team, from both a strategic and immigration perspective, it’s probably the easier and better choice.
Of course, every situation is different. An experienced immigration attorney who is focused on working with startups and entrepreneurs can help you examine your unique situation and guide you on how to move forward.
If your company needs immigration help, contact Jamae Law Group and one of their immigration attorney will be happy to discuss your needs.
