U.S. Expansion, Fundraising, and Exit: A Comprehensive FAQ
Introduction by Michelle Wilk, Investment Manager at Pi Labs
Our portfolio at Pi Labs hails from across the world, united by a shared ambition to build outsized global businesses
For European start-ups, the US is often seen as the holy grail for international expansion. It promises a large addressable market, access to deeper pools of capital and talent, and the potential to land a land grab before competitors. The shared language can also make cross-state expansion more seamless once a foothold is established.
Yet chasing the American dream is also time-consuming and expensive. It requires navigating unfamiliar laws and regulations and, often, a founder on the ground to ensure company values and culture are embedded from the start. The upside is huge, but so are the risks. Timing is everything—expanding prematurely can be a distraction while expanding too late leaves opportunity on the table.
So, how do founders set themselves up for success? Last month, we hosted our inaugural US expansion dinner for portfolio founders in partnership with Wilson Sonsini. Read below for some of the key takeaways from Daniel Glazer (Partner):
For many high-growth UK/European and Israeli tech and life sciences companies, U.S. expansion, fundraising, and exit are key steps in the journey. The U.S. offers the promise of massive commercial opportunities and plentiful capital, but doing business, raising money, and maximizing enterprise value in an unfamiliar, highly competitive environment requires thoughtful advance planning and clinical execution.
Based on our discussions with UK/European and Israeli startups and scale-ups over the past decade, below are over three dozen frequently asked U.S. expansion, fundraising and exit questions (with linked answers).
We intend to make this a living resource for the UK/European and Israeli tech and life sciences communities and will update it as appropriate. If there are key questions you would like to see addressed here, feel free to send me suggestions at daniel.glazer@wsgr.com.
U.S. Expansion
- When should our company consider expanding to the U.S.?
- How do we determine the optimal U.S. expansion strategy?
- What are the unique U.S. expansion considerations for B2B companies?
- What is the simplest way to expand to the U.S.?
- What are some of the most common mistakes made by companies expanding to the U.S.?
- What are the sales tax considerations associated with selling into the U.S.?
- When do we need to create a separate U.S. company?
- Why are so many companies incorporated in the U.S. State of Delaware?
- What are the new beneficial ownership reporting requirements for U.S. companies that come into effect in 2024?
- Where is the best place to establish U.S. operations?
- How is hiring employees different in the U.S., and what are the most common mistakes made by non-U.S. companies when hiring a US-based team?
- Where can we find a guide to hiring U.S. employees?
- How do we provide equity to U.S. employees and how does it differ from providing equity to employees in our home market?
- What does it cost to set up and scale a U.S. business?
- What are the primary legal considerations when setting up and scaling a U.S. business?
- What are the primary tax considerations when setting up and scaling a U.S. business?
- What are the primary immigration considerations when relocating to the U.S. to set up and scale a U.S. business?
- What are the other key administrative and logistical considerations?
- What should we consider with respect to U.S. patents and trademarks?
- Why do lawyers attend the board meetings of U.S. startups?
- How do we manage the risk of U.S. litigation?
- To what extent do we need to work with U.S. lawyers and other U.S. professional advisors?
- What are the key considerations when expanding through M&A?
- What are the unique considerations for health tech companies expanding to the U.S.?
- What are the unique considerations for fintech companies expanding to the U.S.?
- What are the key considerations when offering payment services in the U.S.?
- What U.S. and UK government resources are available to assist companies with U.S. expansion?
- Where can we learn more about U.S. expansion?
U.S. Fundraising
- What are the key differences between U.S. and UK/European VC investors?
- When should our company look to raise capital from U.S. VC investors?
- Will U.S. VC investors invest in early-stage non-U.S. based companies?
- Does a non-U.S. based business need a U.S. parent company to raise money from U.S. VC investors?
- How does raising capital from U.S. VC investors differ from raising capital outside the U.S.?
- What are the growth rate and exit expectations of U.S. VC investors?
- How do we meet U.S. VC investors?
- How do we pitch to U.S. VC investors as a non-U.S. team?
- What should we look out for in term sheets from U.S. VC investors?
- How do we structure a financing round with a cross-border investor group?
- How do we use a Y Combinator-style SAFE as a UK company raising from U.S. investors?
- What are the primary tax considerations when U.S. investors invest in non-U.S. companies?
- What is the typical cost of a U.S.-led financing transaction?
- Where can we learn more about U.S. fundraising?
U.S. Exit
- What should non-U.S. companies consider when preparing for a U.S. exit?
- What are the particular considerations for an acquisition by a U.S. acquirer?
- What are the particular considerations for SaaS companies being acquired by a U.S. acquirer?
- What are the particular considerations for a U.S. IPO?
- What are the legal and regulatory considerations associated with being a U.S.-listed company?
Daniel Glazer is the founding and managing partner of Wilson Sonsini’s London office and U.S. Expansion Group. He can be reached at daniel.glazer@wsgr.com and through Linkedin. The linked resources above do not constitute legal advice and should not be relied on for business or legal decisions.
