STRATEGY

Are U.S. venture capitalists willing to invest in tech entrepreneurs who target foreign markets?

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Finance & Capital mentor Guy Kawasaki's response:
The advice varies and depends on the country in which the start-up is located. U.S. companies seeking funding from U.S. VCs and hoping to operate abroad should have few problems. In fact, most VCs like to see that a company is considering international opportunities. If your U.S. company is planning to target foreign customers exclusively, VCs will probably want to know more about the market opportunity and general economic conditions in the country or countries in question than they would for a company targeting the more familiar U.S. market.

For companies that are based outside the United States and that are not prepared to incorporate here, raising U.S. VC capital will be more difficult. Because investment regulations, laws, accounting standards, and customs vary from country to country, most VCs expect foreign transactions to take longer and be more costly than domestic investments. In addition, U.S. VCs often hesitate to invest money in a company whose progress they are not able to track closely. Some U.S. venture funds have established overseas affiliated funds, so international start-ups could target those.

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Last updated: Nov 30, 2000




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