Question the Questions
Applying some Socrates to your US expansion plans
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4. Then Do
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Then Do
Who is leading your team?
Who is on your US advisory board?
How do you set up in the US?
How do you protect your IP?
Where will your office be?
Which taxes are you liable for?
How do you build a talented team?
How can you successfully fundraise in the US?
Who is leading your team?
If the US is your most important market, it merits a key member of the
core team. Who will you send over from Europe to build up culture?
"Americans love an underdog story, but they want to hear it from the hero's mouth."
The choice of US lead is critical: You need someone trusted by the CEO to build, sell and have complete dedication
to the effort. We've written before about the various lessons learned by over 50 VC-backed CEOs in the US, and the
consensus around one particular issue is clear: CEO and/or Founder
DNA is a necessary - if not sufficient - condition for success in the
US. When asked about the #1 insight the CEOs tell other
entrepreneurs about entering the US, the most cited phrase was
a variation of "a founder has to move to make it work."
It's a point worth emphasizing, given its importance to your
success at home and abroad: If you cannot spare a key member of the team, the domestic business is likely not
ready for the expansion; if you cannot have a key member of the team on the ground, the US operation is likely to
suffer on a variety of fronts:
US customers will be less likely to trust
your commitment to this market.
Market credibility and signaling commitment are
important given the level of competition in the US.
purchase products and services from local companies.
The internal culture is likely to diverge -
and suffer.
Culture is critical for hiring, retention and brand
identity - and consequently critical for your success
as a company.
" If it is your most important market: send a key member of the core team.
Don't hedge. Commit." - Rhodri Thomas, Swiftkey
Confessions of ventures
who launched in the US
Category
Good
Best
LTV
$50
$200+ (repeat spending)
Market Size
$5bn
$100bn+ (growing market)
Revenue Growth
100%+
300%+ (organic growth)
4. Then Do
Just click on logos at the end
of each testimonial to check out
the companies that have already
expanded to the US.
Confessions of ventures
who launched in the US
The resource buttons direct you
to the relevant references and you
can instantly find out more.
Just click the icon to be
redirected to the section
you'd like to explore.
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each section you'll find a
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Each section is presented
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Introduction

7 What makes the US so attractive?

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2. First Ask
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Should you expand abroad?

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Should you enter the US?

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Is the timing right?

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What milestones and timelines must you meet?
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What are the industry dynamics in the US?
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Who is your competition?

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How do you know you have product-market fit?
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What is your US ideal customer profile?

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What is your regulatory burden in the US?

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What legal considerations are key?

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Which visa do you need?

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What is your budget?
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3. Then Test

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How much do you like flying?
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Have you built a local network?

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Can the industry name your brand?
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Can you sell like an American?

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How will you price your products?

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4. Then Do
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Who is leading your team?

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Who is on your US advisory board?

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How do you set up in the US?
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How do you establish a US corporate entity?
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What is the right banking solution for you?

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How do you choose the right business insurance?
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How do you protect your IP?
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Where will your office be?
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Do you need capital?
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Which other US metro areas are worth exploring?
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Which taxes are you liable for?
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How do you build a high performing team?
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How do you hire for a remote role?
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What is your remuneration strategy?
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How do you determine stock options for
your US employees?
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What benefits do you offer your team?
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How are you managing your culture?
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How do you successfully fundraise in the US?
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- Snapshot: Successful European companies with
European-only investor base
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- Snapshot: US Investors increasingly investing in
European Companies
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What are important considerations in fundraising
from US Investors?
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The US VC perspective
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Guidance on baseline metrics
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The founders' perspective
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5. Wrapping Up

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"Could the land of the free cost you the Earth?"
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Where to go next
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About Octopus Ventures
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6. Toolkit

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Guiding questions
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Irrational "inevitability" & other confessions
of venture backed European CEOs who
launched in the US
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Coming to America: relocation tips
from the (street) wise
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Specialists in the field
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Sample market entry timeline
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The 4Ws of product-market fit
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Building your US ideal customer profile
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Relevant visas
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Budget
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Sample budget for new ventures
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Conferences
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Advisor compensation
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Incorporating a US entity
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Recruiters in the US
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Metrics for fundraising
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Software tools for people/talent functions
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1. Prologue
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4. Then Do (cont.)

54
Question the Questions
Applying some Socrates to your US expansion plans
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1. Introduction
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Prologue
The Question the Questions report
first appeared in October 2017.
It captured the attention of many,
so here we present it again with a few
more questions and plenty of answers.
The intention however remains the same:
by feeding these questions through your
planning process, you will emerge clearer
about your intentions, your ambitions
and your readiness to cross the Atlantic.
Introduction
The most famous of all philosophers wasn't into preaching.
Socrates just asked disarmingly, devastatingly simple questions.
(They killed him in the end, but that's another story).
Applying just a bit of his technique to your preconceptions,
hopes and plans for US expansion could save you
months of work and possibly even your business.
The US is a massive market and requires a commensurate
amount of dedication, resources and time. In some
cases, the cost will be too high, or the timing won't be
right; in others, the rational choice will be to accelerate
the US expansion. Ultimately, we'd like to help you
arrive at the strategy that is right for your business.
If you're looking for simple encouragement, this
won't be the guide for you. International expansion
adds a significant amount of complexity and
risk to any business, and there are no single right
answers. We've seen companies succeed (and fail)
by being fast or slow, first or late, big or small.
That's not to say there are no patterns to success.
While we're not offering you silver bullets, there is
a lot you can do. Successful US expansion cases
were extensively planned; failures succumbed
to a sense of "inevitability" and rushed to
market entry without robust validation.
The framework of this document is not intended to
be exhaustive; rather it is a starting point to drive
and focus your discussion and help you interrogate
your US ambition: Could the land of the free cost
you the Earth? If the risk is too high, slow down and
focus at home. If the strategy is sound and the
time is right, we'll help you take the US by storm.
Joy + hustle from New York,
Team Octopus
Disclaimer: We consider this work a living document. As technology, cultures and market
dynamics shift, we are ready and eager to evolve with them. After reading this guide, let us know:
Did we miss something here? We welcome your experiences, counterexamples, additional learnings
and input - let's make version 3.0 together.
" The secret of change is to focus all of your energy not on
fighting the old but building the new." Socrates
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1. Introduction
What makes the US so attractive?
While its dominance in global VC funding is being curtailed, the US is still
a leader in innovation investments. In 2017, 53% of the $160 billion venture
capital invested globally was invested in the US.
Globally, the sum of capital invested into the venture asset class continues to accelerate.
Global venture capital invested (10 years)1

1 Pitchbook
2 Ibid
Capital Invested
Deal Count
Capital
Invested
($bn)
United States
Europe
China
ROW
Total
United States
China
Europe
ROW
Capital
Invested
(%)
4%
3%
2%
6%
8%
11%
7%
11%
8%
9%
4%
3%
6%
9%
5%
4%
12%
19%
27%
27%
13%
16%
21%
14%1
8%
15%
13%
13%
13%
11%
79%
78%
70%
71%
69%
69%
68%
57%
53%
53%
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
0
20
40
60
80
100
120
140
160
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
And while the US is still a critical player, its dominant position is falling relative to, with investments
growing in other world geographies.2
Global venture capital invested (10 years)1
2008
$53.3bn
6,990
2017
$159.8bn
14,727
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1. Introduction
United States
China
Europe
ROW
Capital
Invested
(%)
Capital
Invested
($bn)
United States
Europe
China
ROW
Total
0
10
20
30
40
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
50
When you combine the proven expertise and availability of capital in the US with a population of
324m4, internet penetration at 89%5, mobile phone penetration at 81%6and smartphone penetration
at 67%7, the US is a prime market for new technologies. As of 2017 the US GDP stands at $19.39T8
(versus the UK at 1.98T9, or $2.5T10). According to Gartner's 2018 assessment, annual IT spend of
Fortune 2000 companies tops $3.7T 10.
Total amount raised in Early Stage VC deals $1M-$25M:3
3, 12, 13 Pitchbook
4 World Bank
5-9 Statista - Internet usage in the US
10 Converted from to $ using the December 31, 2017 conversion rate of 1.289 from OFX
11 Gartner
Nonetheless, the US still leads in total capital investment into early stage venture deals.
Global Early Stage VC deals $1M-$25M:13
Capital Invested
Deal Count
2008
$29.7bn
808
2017
$50.7bn
1,570
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1. Introduction
United States
ROW
Europe
China
Total
0
20
40
60
80
100
120
140
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Capital
Invested
($bn)
United States
China
Europe
ROW
Capital
Invested
(%)
The US benefits from strong positioning in certain sectors14
These headline fundamentals, combined with a robust business infrastructure and openness to innovation, make the
US seem like a logical next step. That said, succeeding in the US means overcoming substantial risks. Launching and
scaling in the US market is hard, and even when it is the right answer for your business' expansion, winning here is far
from certain.
13 Pitchbook
14 A special thank you to the UK Department of International Trade (DIT) (https://www.gov.uk/government/organisations/
department-for-international-trade) for their contributions. Aside from developing, coordinating and delivering new trade policy for the UK, the DIT
helps UK businesses export and grow into global markets as well as expand in the UK
15 www.idc.com
16 Statista
US Corporations are acquisitive: 55% of the 1,570 acquisitions of VC-backed
companies in 2017 were made by US companies.
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Subsector
Potential
Semiconductors &
Electronic Systems
The US boasts 50% of the global market for semiconductors.
Cyber-security
US is home to 2/3 of the world's privately-owned cybersecurity companies.
Cloud computing
The US will be the largest market for cloud services, accounting for $163bn by 2021
which is 60% of worldwide revenue.15
SaaS
Fastest growing segment of cloud-based market. 28 states in the US do not levy sales
tax on SaaS products including California, Illinois, New Jersey and Maryland, making
these great locations to consider.
Autonomous Systems
& Machine Learning
The West Coast of the US has attracted over 40% of all global investment in Artificial
Intelligence and Machine Learning.
AdTech
There's a very large advertising industry in the United States - $216bn in 2018,
accounting for 39% of global ad spend.16 New York is an innovation hub for the industry.
2. First Ask
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US Corporations are acquisitive, 55% of the 1,570 acquisitions of VC-backed
companies in 2017 were made by US companies.
Deal Count
Expansion abroad is unlikely to solve a lack of product-market fit (and might require new products),
so watch out for expansion rationales that change the geography of an underlying problem.
" Our trigger to go to the US was competitor related; someone else was going to
take the opportunity and it was quite unusual to be in a situation as a consumer
business where, in the US at the outset, there weren't any peer models."
Ed Boyes, Hello Fresh
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First Ask
Should you expand abroad?
Should you enter the US?
Is the timing right?
What milestones must you meet?
What are the industry dynamics in the US?
Who is your competition?
How do you know you have product-market fit?
What is your ideal US customer profile?
What is your regulatory burden in the US?
What legal considerations are key?
Which visa do you need?
What is your budget?
Should you expand abroad?
Before making the leap to go international, it's worth starting from square
one. Why is expansion abroad critical to your company versus focusing on
your home market?
Without a well-developed, strategic rationale for international expansion, companies risk under resourcing their
foreign entry, under-committing executive time and focus, and struggling to scale operations abroad. Stress-testing
your answers to these questions can help ensure your team and Board are fully committed to the success of the
international expansion.
Revenue limitations
What is the potential in the home market?
Is success in the home market sufficient for
continued growth or an IPO?
What are the limitations on the home market?
- Is it a team constraint?
- Is it a product constraint?
- Is it a market constraint?
Sustaining competitive advantage
Is presence in a single geography detrimental
to your competitiveness?
Do customers demand global services?
Must you look abroad in order to access specialized
talent needed to grow the business that is otherwise
not available in its home market?
Do you need access to foreign capital that is not
available in the home market?
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2. First Ask
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Should you enter the US?
If you've decided the US is a critical market relative to other international
expansion options (i.e. other European markets, Asian markets), it's valuable
to test its fit to your product.
Have you validated the US market?
Do you have a deep understanding of product-market
fit in the US?
Do you have a good understanding of sales cycle
differences in the US relative to your home market?
Have you closed multiple reference customers in the
US from Europe, or have you run representative
consumer pilots?
Do you have ROI / use cases from customers in
the US?
Do you have organic inbound leads from the US?
Do the financials work?
Does the business model work under US constraints?
Have you stress-tested your financial requirements
against US costs?
What is the competitive landscape in the US, and
how does it affect your customer acquisition cost
and positioning?
Will the investment and growth required to make
the US entry a success hurt the domestic business?
Most companies are drawn to the absolute size of the US, unaware of how it is fragmented and
regional. Differences in consumer preferences, regulatory environments and regional costs can all
pose challenges to achieving scale in the US.
Is the timing right?
Timing is key. In our work with European companies, we've seen a pattern of
success and risk mitigation emerge: companies enter the US either very early in
their life or later on, when they have a strong business in their home market.
Go early
Is the US the Company's primary market?
Is your primary distribution channel global in nature
(i.e. via app marketplaces and platforms)?
Are you focused on digital health or education (or
another market where the US is substantially larger
than European markets, and a complete move can
be a strategic decision)?
Often European entrepreneurs start building their startup
in their home territory and then recognize that the market
opportunity there pales into insignificance compared to
the market opportunity for the same problem in the US.
The early US entry is in effect a company move, whereby
the European home market will be sacrificed in the near
term. At an early stage, having two offices is often
unrealistic from a funding, culture and operations
standpoint. The founders elect to sacrifice (or at the very
least substantially reduce activity) in the home market
and commit to the new market completely.
The benefit of this approach is that the team will build
only one product or service and it will be entirely focused
on the new market. The startup's stage, funding raised,
and customer traction then aligns with an early
company in the US.
Go late
Have you saturated the local market?
Have you gone through renewal cycles?
Is the domestic management team sufficiently
strong to manage and grow the business in the
absence of the CEO?
Once a sustainable core revenue and operating base
has been built in the home market, the CEO or a core
founder will be able to leave the home market and focus
on the US with less risk of disruption. Many entrepreneurs
who have successfully entered the US have chosen to do
this much later in their company's evolution, often post
Series C and when the core business is cash-flow break
even. The Company's internationalization is less of a
make-or-break move with a self-sustaining business at
home. Teams can then afford to be measured and
somewhat clinical, testing, iterating and only recruiting
behind success. By having a stable core business, the
pressure on the founder to make the new market work
is greatly reduced.
Many companies enter the US at the wrong time: When they have initial traction in the
home market, but before repeatability and scale have fully taken hold. That can put strain
on a vulnerable position.
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2. First Ask
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6 to 9 months
planning phase
6 to 12 months
deployment phase
Beware of the in-between
Those founders who launched an international market before reaching scale in their home territory
found both markets hard to deliver. The home territory was required to continue to be the engine of
growth for the business, but with focus and resources now strained, the company now deals with double
the level of complexity without operational scale. In many cases, those founders had to make the painful
decision to retrench one to two years later. The knock-on effects of this can also be very painful: a
business that is subscale in its home market and unproven internationally may struggle to raise
additional fundraising and may be forced to seek several rounds of potentially dilutive internal funding.
" It's easy to go too fast or be too early with the US launch before the company
is prepared to take this challenge. It's a differently structured and
hyper-competitive market; therefore, European entrepreneurs might benefit
from considering soft launching there first." Rytis Vitkauskas, YPlan
What milestones and timelines
must you meet?
Having milestones and hurdles will help in qualifying your budget and in
focusing your spending on high performance. What goals do you want to
set yourself?
A lot of preparation for a move to the US can be done from Europe. Expect to have a 6 to 9-month planning phase,
then a 6 to 12-month deployment phase where you establish operations on American soil and build out your team.
Graze wanted to test if its proposition resonated with US consumers. It
allocated an initial budget to build a campaign and serve the US from Europe.
The team created a landing page to collect US emails and started mailing
snacks to the US directly from the UK. Once they had established that their
proposition wouldn't change, they invested in New York operations.
" For six months, we went into NYC for one week at a time monthly before launch
(until we made our first hire). We wanted to talk to the key people and get to know
all the players in the podcast market; I invited people to breakfast the key NPR
and WNYC podcasters and became friends with many of them. That helped us
very much" Karl Rosander, Acast
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2. First Ask
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Sample market entry timeline
5%
US opportunity analysis
Initial product analysis
Initial market analysis
Initial budget analysis
Product-market fit
Legal/Financial Considerations
Visas, legals, tax
Budget proposal
US Leadership
Set US team leader
Regular travel to US
Brand Building
Conferences
Build advisory board
Office Set Up
Office location

Office location
Administrative preparation

Administrative preparation
Incorporate in the US
Talent
US employees
Remuneration / options
Benefits
Culture and communication

Regular travel to US

Regular travel to US

Regular travel to US

Regular travel to US
Ideal US Customer Profile

Initial product analysis

Product-market Fit
Home business analysis
1. You're ready to consider whether or not the time is right for expansion to the US
2. On balance, it is clear that your business has more to gain than to lose by exploring further
3. You have referenceable US customers and a growing pull from the US market
24-21 months ahead
12-9 months ahead
21-18 months ahead
9-6 months ahead
18-15 months ahead
6-3 months ahead
15-12 months ahead
3 months - D-Day
Planning phase
Implementation phase
Timing of Entry
Set entry milestones
Support Resources
Banking
Insurance
Relevant service providers

Banking
Insurance
Relevant service providers


Relevant service providers


Relevant service providers

US employees
Remuneration / options
Benefits
Culture and communication

US employees
Remuneration / options
Benefits
Culture and communication

US employees
Culture and communication
Conferences
Build advisory board
Conferences
Build advisory board
Conferences
Build advisory board

Regular travel to US
US Opportunity Analysis
Visas, Legals, Tax,
Budget Deep Dive
Visas, legals, tax
Set entry milestones
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2. First Ask
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17Statista - total ad spend in country/population
What are the industry dynamics in the US?
Often the industry dynamics in the US are very different from your home
market. It's worth validating that you are well placed for sustained growth.
Many European entrepreneurs see the US as an incremental progression from the work they've done in the home
market, when in most cases, a US operation is a return to square one. The expertise you've amassed at home could
lead to blind spots in this new environment, if it steers you to make unfounded assumptions. Successful entrants
question what they know.
Key questions
What are the existing market restrictions?
How easily and how frequently can your consumers switch between different companies that sell similar products?
Why will it be easy for you to enter this industry, but difficult for others to follow in your footsteps?
How many companies can the industry reasonably sustain?
What is the value chain for your product/vertical in the US? Who is currently capturing value and how are they doing it?
Do industry participants in the US control any proprietary methods or processes that are crucial to your expansion?
A cautionary tale is that of London-based ridesharing
app Hailo. Hailo invested heavily and then spent less
than six months in the US before it realized there were
almost no margins to be made due to the price war
between Uber and Lyft.
When Hailo arrived in New York in 2013 it tried to use the
same go-to-market strategy it had for London working
with local cab drivers to launch its service. It failed to
build a close relationship with New York cab drivers and
since Uber dominated the more expensive town car
market, Hailo was left to try and make money from
inexpensive rides. It didn't work.
Hailo was forced to lay off 40 employees in New York,
and the undertaking eventually led to CEO Jay
Bregman leaving the company.
Despite raising more than $77M from high profile
investors in the US and Europe, the company pulled
out of North America in October 2014, shutting its
operations in Washington, Chicago, Boston, Toronto
and Montreal.
The Full Story
" In the US, you can build to $10M in revenue and not have product-market fit
we treated the first customer as beacons and to prove the fit of our products."
Tim Robertson,Vium
Who is your competition?
With a large opportunity comes more competition. A detailed competitive
analysis is a cornerstone of a sound decision-making strategy.
In 2017, US per capita advertising spend was $610, compared to $365 in the UK, $276 in Germany and $184 in France.17
Most Europeans underestimate how crowded and loud the US market is, and the sophistication of the marketing and
lead generation efforts of the competition. A great product, crisp value proposition, and effective differentiation are
paramount to traction in the US.
Current competition
Who are your competitors direct, indirect,
adjacent, up and down the stack?
What are their growth rates?
Where will they be in one year when your US
operations are up and running?
New entrants
What are the barriers to entry in your industry?
If you do well, are you going to be hit by a wave of
new entrants - all chasing after the same market?
What moats can you build around your offer?
What are your key differentiating factors? Are
these sustainable?
Want insights on your competition? Head to the library
When it comes to evaluating the competitive landscape or conducting bottom up market sizing, you should
explore the many resources available behind research paywalls.
University libraries: University libraries hold a treasure trove of resources for conducting market or competitive
analysis. Many offer free access to otherwise costly research databases such as IBIS World, Gartner, and Frost
and Sullivan (though subscriptions may vary across universities). In most cases, one can access these resources
remotely if affiliated with the university.
University libraries can also provide access to pricey equipment, such as Bloomberg terminals.
A formal affiliation with the university typically grants you access to these resources. However, having
members of your team that are students, faculty, researchers, or alumni could also grant you access.
Public libraries: Many city or county public libraries similarly offer access to a variety of databases, though
access can be more limited than that of university libraries.
If you're in New York, a great resource is the New York Public Library's (NYPL) Science, Industry
and Business Library (SIBL).
If you're in Boston, the Boston Public Library (BPL) also offers industry research articles and
abstracts from over 600 leading trade and general business periodicals from over 30 countries.
In order to access public library's resources, you usually need to sign up for a library card by presenting ID and
proof of residency in the area covered. In some cases, merely visiting the library and accessing/requesting the
data from a librarian is an option.
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2. First Ask
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How do you know you have
product-market fit?
Tesco who? Carrefour what? European reference customers will not mean
much to a US audience. Unless you have local reference accounts and local
traction, beware of assuming you have or will get fit.
Many European brands - even household names - will be
unknown to American customers. Your list of European
references will carry little to no weight with Americans,
who in many cases think of even international operations
of the same company as different businesses.
Customers will expect you to prove that your product
addresses a local pain point. Doing this will also help you
understand how to position, localize and in many cases,
redesign, your product for the US.
To be successful it is not enough to have good technology you also need to overcome your
prospective US customers' reluctance to buy from non-US firms: risk and politics. This means being
hyper-focused on target prospects that you can impact more significantly than the local competition.
Given differences in the retail industry in the US, Conversocial's success with retailers in
Europe did not translate to the US; instead it found traction with telecommunication
companies among other sectors.

Before you take your product to the US,
do your research and find out if your
customers like what they buy. Do you
have significant inbound requests from
customers? What do they want your
product to look like? Just as you did at
home, you'll need to test your value
hypothesis. What are the features you
need to offer in the US? Who is the
audience that is likely to be interested?
How will they buy your product?
The US is BIG and that can be misleading
The size of the US market, and its consequent share of
"innovator" customers, who want to be at the forefront
of new technologies, allows for companies to hit millions
in revenues without proper product-market fit - and
that can be dangerous.
Your company might be lulled into believing you've
found a repeatable formula for scale, right until renewals
slip, churn increases, and growth slows.
A study conducted by Startup Genome concluded:
" Startups need 2-3 times longer to validate their market than most founders
expect. This underestimation creates the pressure to scale prematurely In
our dataset we found that 70% of startups scaled prematurely along some
dimension. While this number seemed high, this may go a long way
towards explaining the 90% failure rate of startups."
More importantly, if you don't have product-market fit in Europe, moving to the US will compound your problems,
not solve them. What "tells" can you see that demonstrate that fit is real? Is your product growing in the US with
no marketing?
" We took recipes from the UK and things
like curry and lamb just didn't translate,
which we quickly adapted."
Ed Boyes, Hello Fresh

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Case study: Spotify
In Spotify's case, customer demand for a US version was evident. European adoption had
been explosive and soon after, there were "breathless blogs and fan sites dedicated to
discussing the service's US potential." But even this demonstrable demand and growing
knowledge of US music listener preferences was insufficient in justifying a US move.
Who - The customer
Customer preferences: What are the US customer's preferences? Is my customer's behavior aligned with
her preferences?
Customer acquisition: What is the CAC in the US market?
Competition: Who are the domestic and foreign alternatives? What is my competitive advantage?
Spotify's business model relied on securing the music rights held by the major US record labels. This would require
building the right relationships within the US music industry. The company's decision to expand ultimately hinged
on the reality of securing these relationships and aligning them with their knowledge of customer preferences.
What - The product
Product value: What value does the US customer extract from the product?
Product features: What features of my product are context-specific and need to be revised for the US?
Product economics: What is my predicted ROI? What are my projected costs, revenues, and breakeven point in
the US? What new revenue-generating opportunities exist in the US?
In Spotify's case, though its value in Europe free, legal access to vast amounts of music was indispensable to
success in the US as well, it made negotiations with US record labels particularly slow and challenging. Critics within
and outside the labels expressed skepticism at the company's ability to convert free users to premium users under its
"freemium" model. To assuage the labels concerns, the company tweaked its business model for the US, introducing
a mid-tier premium customer category and several new features based on US listener preferences.
Where - The local context
Regional opportunities: Which regional markets in the US best optimize ease of access, speed of product
adoption, profitability, and sustainability?
Local restrictions: What US restrictions (legal and regulatory) exist for producing, marketing, distributing, and
selling my product? How can I surmount them?
Distribution outlets: Through what media could I develop customer interest in my product? Where could I best
sell my product to my target customer?
Acquiring licensing rights in the US did not require regional relationships, but Spotify did need to map out alliances
with regional advertisers yet another subset of customers. In so doing, the company developed new revenue streams
by delivering ads filled with local content to "free users" based on their locations. Thus, Spotify's regional strategy
helped it retain its crucial freemium model and justify its expansion plan.
When - Market timing
Developing demand: How long does my target US customer need to be educated about my product?
Adoption time: How long do customers take to adopt novel offerings in the target market?
Necessary partnerships: How long would it take to build essential partnerships? When do these relationships need
to be developed relative to my market entry?
Perhaps because Spotify took two and a half years to prepare and launch in the US, demand for its product was at
fever-pitch when it launched. Notably, the company entered at a time of uncertainty in the US industry: physical
album sales numbers had been falling dramatically, and streaming competitors like Rdio had failed to capture popular
demand. The industry climate, hype around Spotify's product, and the minimal effort needed for customers to test
the free product accelerated the time between market entry and mass adoption in the US.
The missing "magic metric"
for customer success
is the Coolest Music Service
You Can't Use, Wired
?
?
?
?
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What is your US ideal customer profile?
All companies claim that their strategies are customer driven these days.
Your ideal US customers may look different from their European counterparts.
You have grown in your home market and are now eager to expand your sales in the United States. However, what
was valuable to your customers at home might not translate seamlessly to US clients. Validating your Ideal Customer
Profile and testing your sales process within this new cultural context will be crucial to ensure your scalability in the
new market.
Identify a primary customer
Founders sometimes sidestep difficult choices by not
singling out a definitive group as the primary customer.
But companies who do that risk not being focused
on anyone.
Define your product or service from the American
customer's point of view. A frequent comment from
founders is that the US market is saturated and
competitive. How do you stand out from what your
customers already have?
Many customers expect a local presence and local
services, but not all. You can get started building a
book of business before you establish operations on
the ground.
Direct-to-consumer
Direct-to-consumer companies can often acquire their
customers without a physical presence in the US, since
digital marketing can drive the sales process.
Having a transferable marketing strategy is important
here does your message translate well into American?
" Interestingly for us, there were two clear learnings
early on first, US customers were more willing
to try new products and were easier to convert,
so CAC was much lower than in Europe. Second,
even with the same level of customer satisfaction,
willingness to refer the product to new customers
was far higher in the US. Our marginal dollars in
the US were therefore going a lot further and this
created an incredibly appealing proposition as it
was going to be so efficient to grow the business."
Ed Boyes, Hello Fresh
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Building your US ideal customer profile
Determine the customer's needs

What pain are they trying to solve?

How does that pain impact them?

How do they value that impact ($)?

What results would they like to achieve: on an individual basis, and if B2B,
a department and company-basis?

What are the potential outcomes of those results?

How will those outcomes impact them, on an individual basis, and if B2B,
a department and company-basis?
Define the ideal sales target within the customer profile

B2B:
i. Who are the executives that own the pain point and are empowered to act?
ii. What other roles within the target company (between one and three)
would be productive entry points for outreach?

B2C:
i. Who are the individuals most likely to seek a solution that addresses the pain point?
Identify how competitors service the customer's needs

Are they considering other vendors or using an in-house solution?

On which criteria are you being evaluated?
Define the best process for connecting with the customer

What is their typical buying process for a product such as yours?

Can you realistically engage your ideal customer directly or do you need the help
of a partner with pre-existing relationships?

Where is a critical mass of your ideal customers concentrated?

Does the customer have to be sought out, or would they come to the service?
Understand the customer's ideal timeline

How long does their typical buying process take? How satisfactory is this to the customer?

What can complicate/extend their buying timeline? When do they plan to buy?
Validating your US ideal customer profile
Test your product on the new customer

How do these leads respond to your solution?

What objections do they raise?

What characteristics of those who respond validate your ideal profile?

What lessons can you learn from those who reject your sales outreach?
Compare your new customer profile to your existing customers

Did you discover significant differences between the US leads and your existing successful customers?

How do these differences affect your sales process?

How do these differences affect your product development roadmap?

Is the competitor group you are up against the same as that of your home market, or are there
significant local players you haven't yet faced? What is your key differentiation?
Tweak your new customer profile based on the feedback

How do access to leads and conversion rates increase after you make changes to your ideal
customer profile?
Resources


Blueprint for sales growth
Expanding your B2C business
into the US
Choosing the right customer
How do I get the biggest bang
for my new investment buck?
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" In enterprise sales Americans will buy from domestic
vendors unless you can prove you are two to three times
better, or you have US marquee clients that you can
showcase." Ian McCaig, Qubit
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18 Source: Law360, Acritas Research
What is your regulatory burden in the US?
Many registrations, licenses, oversight bodies and regulations vary on a state-by-
state basis, so local counsel is key to assess the business impact of compliance.
Is your business operating in a regulated sector? If so, you'll likely be subject to the rules of a number of regulatory
agencies. Applying for licenses is straightforward, if time-consuming. You'll need counsel to establish which licenses
you need and what regulation you'll be subject to. The days of entering a market, gaining market share and getting
regulator blessing retrospectively are ending regulators are taking an increasingly harder stance on this front and
want to be approached pre-launch. A significant regulatory variation between states is in taxes, which we will
cover separately.
Data privacy
Unlike the EU, the US does not have a single overarching
privacy law. On a federal level, the United States maintains
a sectoral approach towards data protection legislation
where certain industries are covered and others are not.
This has significant commercial implications for
direct-to-consumer digital marketing, for example. If you
are purchasing Facebook ads in the US, you have a much
more expansive set of targeting criteria and tools than in
Europe, where there are more extensive limitations on
what customer data can be made available. Given the
current privacy regulation landscape, your ability to use
these tools may be further restricted in the near future.
At a state level, most states have enacted some form of
privacy legislation. This may have an impact on where you
want to locate your HQ.
Resources
Specialists in the field
Legal challenges after expansion
Applying for licenses and permits
General Data Protection
Regulation (GDPR)
Cheryl Young - Securities Compliance
Advisors (SCA), focus on fintech
Ingrid Brydolf - Davis Wright Tremain,
focus on healthcare
Ashford Tucker - Fross Zelnick
Lehrman & Zissu, focus on healthcare
Heidi Lawson & Greg Hoffnagle -
Cooley LLP, focus on insurtech
What legal considerations are key?
The American approach to law is very different from Europe, and legal counsel
is part of the cost of doing business. 'Lawyer up' during the planning phase or
you risk falling over the complicated laws in place across the US.
Companies in the US spend nearly triple the amount
on legal services for every dollar of revenue than their
counterparts around the globe: On average, 0.4% of
every dollar of revenue versus 0.15% for the rest of the
world.18 The substantial difference stems from both
higher legal costs and requirements for more services.
In the US, each party to a lawsuit bears her own legal
costs. If you're sued, you'll have to pay your legal bill
regardless of the outcome of the case. Given the
high costs of litigation, the opposing party knows
you're likely to settle instead of fighting the case in
court. This practice leads to a much more litigious
culture, and the threat (and fact) of litigation is used
more extensively to further business outcomes.
Extensive employment regulations at the federal
and estate level will influence every step of hiring,
managing and terminating employees. Employment
discrimination claims are common and expensive.
Because states treat business regulations so differently,
it's important to have experienced, localized counsel
to evaluate the different regulatory requirements.
States will differ on legal requirements for setting up
operations, hiring talent and business reporting.
The upfront cost of expert advice aimed at avoiding
potential problems and crafting well-worded contracts
is well invested, considering the price and disruption of
a lawsuit.



Specialists in the field
" In the US, lawyers are part of the competitive dynamic, whereas in Europe
they confirm agreements." Chris Wade, Isomer Capital
Daniel Glazer -
Wilson Sonsini Goodrich & Rosati
Victor Boyajian -
Dentons
Ed Zimmerman -
Lowenstein Sandler
Ted Rosen -
Akerman
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Business visitor visa
This is an easy visa to get but be careful the restrictions
on it are quite tight. You can use this visa for visits during
your planning process; some allowed activities include:
Merchants taking orders for goods manufactured
abroad;
Negotiating contracts;
Consulting with clients or business associates;
Litigating; and/or
Undertaking independent research.
Bottom line
When it comes to American work visas, there are many categories to choose from. Immigration policies often change
with each new Administration and new legislation.
Keeping up with those changes is a full-time job in itself; our advice is to start early and maintain regular contact with
a reliable immigration attorney.
Specialists in the field
" The visa process can be a huge battle you've got to be mentally ready for. A good
immigration attorney will know the details of your various options and can set
expectations and plan accordingly." Danny Hakimian, Onfido
Which visa do you need?
Visas and immigration are complex subjects in the States, especially in the current
political climate. Seek professional counsel and consider your options at the
beginning of your planning process it could determine who you send to the US.
A straightforward VISA you can get is an E-1 visa, issued
for a company that is trading internationally with the US.
Importantly, the employees of the company must be of
the same nationality as the company to be eligible for
E-1 visas.
Otherwise, an L-1 visa (intra-company transfer) is the
most likely to suit your needs.
If you're a successful entrepreneur, or have extraordinary
credentials, you could apply for an O-1 visa (applies to
science, education, business or sport).
Finally, if you are ineligible for or unlikely to get those visas
then you could apply for an H-1B visa. This is a capped
visa companies apply at the beginning of April for a start
date of October. It is essentially a lottery, with your
chances of success at roughly 1/3, because a limited
amount of H-1B visas are provided each year.
Australia, Singapore and Chile have specialist visa treaties
with the US that grant nationals of those countries
additional visas to work in the US. If you are of one of
those nationalities, research these additional options.
Coming to America: a primer on visas
for foreign entrepreneurs
Paul Samartin -
Ganguin Samartin
Daniella McGuigan -
Ogetree Deakins
Gloria Lin -
Immigration Law Group
Dana DiRaimondo -
D&S Boutique Business Immigration
E-2 visa
E-1 visa
H-1B visa
L-1 visa
O-1 visa
You are planning
to start a company
in the US
Your company is
actively involved
in substantial
trade with the
US (at least 50%
of volume)
You are an
employee
You have been
employed by your
company for at least
one year out of the
last three years
You are an
individual or
entrepreneur who
can demonstrate
extraordinary
abilities
You are planning to
invest a significant
amount of money
in the US
You are a citizen of
a "treaty country"
The US based
position requires
a bachelor's
degree or a foreign
equivalent
You are in an
executive, manager,
or "specialized
knowledge" capacity
-
You are a citizen of
a treaty country
Your company is at
least 50% owned
by citizens of a
treaty country
Your employer is
willing to fill out a
Labor Condition
Application
The foreign company
will remain open and
operational during
the period of your
L-1 employment
in the US
-
Employment visas: changes
and what to expect
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2. First Ask
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19 Betts Salary Recruiting Data
" Given the amount of cash you can burn with a market at least five times bigger
than a European market, higher salaries and more competition, you need to be
clinical in execution." Ian McCaig, Qubit
What is your budget?
Personnel is more expensive in the US, as is building a brand. Ensuring you
have sufficient resources set aside will enable you to stay competitive in the
fast-paced US market.
Many founders underestimate how long it will take to establish operations in the US. When planning, many
companies found it crucial to have someone dedicated exclusively to the forecasting and due diligence of the US
expansion. In a world of high costs, it is also advisable to have a finance person as part of the team, especially if
you'll be managing a P&L in country.
It is not uncommon for companies to spend around 2 years to set up shop in the US properly.
The US employment market for tech-related talent in the large centers is very liquid, and as such employee retention is
low and costs are high. For example, In London, a Senior Account Executive might cost you 40-60k ($51.5-77k) base
salary, whereas in San Francisco the same person would command a base of $90-120k.
Additionally, it can be hard to attract high quality local talent without local product-market fit validation.
That said, hiring from the competition will send a strong market and talent signal and cost you commensurately.
If you build your budget and planning strategy around specific milestones for performance and de-risking, and stick
to them, you are likely to invest behind success, and to minimize costly course-corrections.
Budget benchmarks
This is a sampling of what salary and variable compensation could cost you in different geographies, before taxes,
healthcare and other benefits, which can be an additional 25% of salary.
2018 average
salary ranges19
" It costs a lot to hire here; a lot more than we assumed.
The competition in the industry for talent is fierce, so expect
$100k salaries for the best sales people in NYC as the norm.
They cover costs if they're good though."
*Exchange rate of 0.77 = $1 | ** OTE refers to On Target Earnings
*** VP of Sales data gathered from clients with $0-20M in revenue that are pre-series A to series C
San Francisco, CA
New York, NY
Austin, TX
London, UK*
Sales
base
| OTE**
base
| OTE**
base
| OTE**
base
| OTE**
Sales Development Rep.
$45-60K | $65-85K
$45-60K | $65-85K
$40-50K | $60-70K
$33-47K | $47-67K
Account Executive
$70-90K | $140-180K
$70-100K | $140-200K
$50-70K | $100-140K
$53-80K | $106-160K
Sr. Account Executive
$90-120K | $180-240K
$90-120K | $180-240K
$60-90K | $120-180K
$67-93K | $133-186K
Enterprise Sales
$120-160K | $240-320K $120-160K | $240-320K $120-150K | $240-300K
$80-120K | $160-239K
Sales Operations
$80-100K | (+5-20%)
$80-100K | (+5-20%)
$60-80K | (+5-20%)
$53-80K | (+5-20%)
Sales Engineer
$80-120K | $150-160K
$80-120K | $150-160K
$70-110K | $95-145K
$53-120K | $73-160K
Customer Success Mgr.
$55-90K | $75-120K
$55-90K | $75-120K
$55-80K | $75-105K
$53-73K | $67-100K
Sr. Customer Success Mgr.
$80-125K | $105-165K
$80-125K | $105-165K
$70-110K | $95-145K
$73-106K | $100-140K
Account Manager
$75-95K | $105-135K
$75-95K | $105-135K
$55-75K | $80-105K
$71-106K | $106-113K
Sr. Account Manager
$90-120K | $130-170K
$90-110K | $130-155K
$70-90K | $100-130K
$80-106K | $113-153K
Marketing
Marketing Coordinator
$50-80K | (+5-10%)
$50-80K | (+5-10%)
$45-70K | (+5-10%)
$27-40K | (+5-10%)
Demand Generation Mktr.
$115-135K | (+10-20%)
$110-130K | (+10-20%)
$75-95K | (+10-20%)
$60-80K | (+10-20%)
Product Marketer
$140-160K | (+5-10%)
$140-160K | (+5-10%)
$100-120K | (+5-100%)
$53-67K | (+5-10%)
Content Marketer
$90-$110K | (+5-10%)
$90-110K | (+5-10%)
$50-85K | (+5-10%)
$27-40K | (+5-10%)
Sales leadership
SDR Manager
$90-130K | $120-170K
$90-120K | $120-160K
$80-90K | $115-120K
$73-87K | $100-113K
Inside Sales Manager
$120-140K | $240-280K $130-150K | $260-300K $100-130K | $200-260K
$106-120K | $212-239K
Head / Director of Sales
$125-150K | $250-300K $110-140K | $220-280K
$100-120K | $200-240K
$120-133K | $240-266K
VP of Sales***
$170-220K | $340-440K $200-230K
| $400-460K $150-170K | $300-340K
$133-166K | $266-333K
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Sample budget
for new ventures

Silicon Valley
New York
London
Activity
Rate
$ Range
$ Range
$ Range
Corporate setup




Incorporation
legal fees
Annual
$1,000-10,000
$1,000-10,000
$500-2,000
Legal fees
(per hour)
/hr
$300-900
$500-1,000
$175-715
Facilities




Hardware essentials
/employee/year
$24,000-72,000
$24,000-72,000
$24,000-72,000
Plus furniture (not
at co-working)
/employee/year
$12,000-120,000
$24,000-72,000
$24,000-72,000
Office space




Lease in SF Bay Area
/SF/year
$60-200
$42-100
$53- 112
Co-work space
/desk/year
$400-600
$500-1,000
$405-400
Employee cost



Salary ranges




VP level
Annual
$200,000-400,000
$200,000-400,000
$120,000-200,000
Director marketing
Annual
$120,000-220,000
$100,000-210,000
$90,000-190,000
Marketing staff
experienced
Annual
$70,000-140,000
$75,000-100,000
$45,000-100,000
Marketing staff
entry level
Annual
$50,000-80,000
$50,000-75,000
$20,000-26,000
Admin




Director (Acct. HR)
Annual
$140,000-180,000
$150,000-200,000
$70,000-140,000
Staff experienced
Annual
$75,000-140,000
$90,000-120,000
$30,000-50,000
Staff entry-level
Annual
$50,000-85,000
$50,000-75,000
$20,000-26,000
Sample budget
for new ventures

Silicon Valley
New York
London
Activity
Rate
$ Range
$ Range
$ Range
Employee cost (continued)


Outsourced accounting/HR



CFO
/hr
$200-350
$200-300
$285-500
Controller /
HR. Director
/hr
$120-190
$125-175
$110-275
Senior accountant/
bookkeeper
/hr
$85-150
$85-125
$45-100
Benefits and payroll
Payroll taxes and
workers comp
of payroll
15%-30%
15%-30%
13.8%-14%
Health insurance
/employee/year
$350-1500
$400-600
$115-205
Vacation
of salary
0-4 weeks
0-4 weeks
0-4 weeks
Payroll service
(5 - 10 employees)
/year
$500-12,500
$500-12,500
$625-11,000
Recruiting
of annual salary
20%-35%
15%-25%
18%-35%
Employee morale
/emp/year
$1,200-7,200
$1,200-3,600
$960-8,700
Other




Marketing
Annual
$12,000-120,000
$12,000-120,000
$8,000-90,000
Insurance
Annual
$3,000-5,000
$10,000-25,000
$1,000-1,850
H1B visa cost
/employee
$3,000-4,000
$3,000-5,000
$2,220-8,880
Travel
/employee/flight
$1,000-3,000
$1,000-3,000
$1,000-5,000
Bank fees
Annual
$0-1,000
$100-250
$50-500

$1,115,431 -
3,235,450
$1,128,395 -
2,894,888
$729,450 -
2,121,330
What else is in your budget?
A typical US expansion budget includes a number of standard considerations. The cost of each line item exemplified
here will vary significantly depending on where you set up the company. There is a trade-off between being downtown
in a city (i.e. San Francisco or New York) and saving between 10%-45% on operating overhead costs by being as little as
10-20 miles away: the distance can affect talent attraction and retention, so it's important to evaluate the talent
requirements of your company, and the distribution of the population with the requisite skills for your business.
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3
Then Test
How much do you like flying?
Have you built a local network?
Can the industry name your brand?
Can you sell like an American?
How will you price your products?
41
" My view is that founders should move to the US for a while, live here six months
and then assess how to proceed. Familiarity with the market is one of the most
predictive factors of success when going abroad." Ari Salonen, Midaxo
How much do you like flying?
Before you open your doors to customers in the US, you should research the
market in person. There is no substitute for physical presence.
Spend time on the ground
Your competition in the US is highly likely to include American startups and established American companies, groups
who live and breathe the US market and culture. The reality is that many European companies tend to prepare less for
US entry than their American counterparts, placing themselves at a disadvantage.
Europeans who had the most success with US entry typically planned an entry phase of at least six months.
During that time, the CEO would travel to the US frequently to meet potential customers, suppliers, business partners,
and other people crucial to the early success of the business.
This engagement phase allowed companies to strengthen their US strategy and business case before committing to hiring
and building out a physical presence. You should set up processes in your company so that you are able to work remotely
during the time that you're on the ground in the US: How does the team at home perform under those circumstances?
Contractors
Contractors are useful because they're quick to hire and
require minimal paperwork to employ. You can use
contractors for these months of tests while you spend
time hiring the right people and building out your
permanent staff.
Key questions
Have you exhausted the extent of necessary
adaptations your business will need to undergo to
have a compelling offer for American customers?
Do you have product-market fit?
Do you have two to five reference customers?
Do you have a replicable sales strategy?
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Have you built a local network?
Your local network in Europe was likely instrumental to your success there.
The same is true in the US connections and trust will accelerate your
expansion in the new market.
Setting up business in a country where you don't have a soft network of ties, experience and trust is a daunting task.
Elvie had a small but growing proportion of sales from the US, without a US-based team.
The team had a limited network in the US and was unsure about how to resource this
market. After 30+ conversations, Elvie had a soft network of entrepreneurs who had scaled
businesses with similar products in the US, experts and consultants in US retail, leading
hospitals which could partner with or purchase from Elvie and senior decision makers at
target retailers. With these local connections, Elvie uncovered additional go-to-market risks,
commercial opportunities and data that helped it refine its US strategy.
Being part of a US incubator or accelerator can also help with the transition, since you'd likely be provided space,
advisors, coaches and a network of fellow companies and prospective customers.
Resources



" This can be a reality for the newly-arrived outsider. A lot of contract business
gets done via informal networks built on local knowledge into which you have
little insight. If you're a local, you know how much a good lawyer should cost,
who to contact, and what to avoid. As a newcomer it can be difficult to assess a
situation no matter how long you look at it, even though all the information is
'knowable' in a concrete way. It just takes a bit of time." Will Grogan, VanMoof
3. Then Test
42
" Preparation is key. We had senior staff travel to the US
to scope out offices, interview potential candidates for
roles, and we ran, and continue to run, certain group
operations in the UK marketing, CRM, customer
service, finance, product and tech. It makes no sense
to replicate central functions for what should be a
trading hub. Centralize as much as possible, but for us,
human relationships with hotel partners meant we
had to double down on building a supply team entirely
based in the US. We wouldn't scale without being able
to face-to-face."
Rob Day, Secret Escapes
Federal programs and incentives
Business incentives by state and territory
State business
incentives database
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45
Can the industry name your brand?
Conferences and tradeshows can give you insight on industry trends and
show partners and customers that you've arrived.
Another way to promote your company is to attend conferences and tradeshows. The scale and caliber of
the chosen events can help you meet a lot of key people in your sector in a condensed amount of time. Look at
conferences as a ground war and turn them into competition games for your team: for example, one point for each
lead, three points for meetings within 30 days of the event.
If your product is an episodic sale, think about how you can become part of the daily conversation in your industry.
Equip potential evangelists to be seen as market leaders. Have a point of view and narrow down your message - it's
hard to cut through the noise and get a customer even when you're unique.
Partnerships with complementary brands can also assist in building a profile for your business and becoming known
to the industry. Ask to sponsor conferences and request their list of last year's attendees: you can connect with
attendees by having the conference as a point of contact (i.e. "sorry I missed you at XX conference last year will you
attend again?").
When it comes to conferences, the GRMA comes up as one of the best (in Retail, and
now Finance & Insurance) 30-40 CMOs of large corporations in one spot. Find these niche
conferences for your space.
And finally, send really good cookies. Response rates for these are 20x that of an email
outreach. For example, Yext's sales team is a fan of sending Jars By Dani to their
B2B prospects.
Industry
Conference / City
City
Link
Agriculture
SV AgTech
Conference
Silicon Valley
Blockchain
The Blockchain
Conference
Austin
Consensys
New York
Cloud
Dockercon
San Francisco
Google Cloud Next
San Francisco
KubeCon /
CloudnativeCon
Seattle
Microsoft Build
Seattle
Reinvent
Las Vegas
QCon
New York
Consumer
Consumer Electronics
Show (CES)
Las Vegas
Grocery Shop
Las Vegas
Internet Retailer
Conference
Exhibition (IRCE)
Chicago
eTail
Boston
Shop.org
Las Vegas
ShopTalk
Las Vegas
Education
ISTE
Chicago
NY EdTech Week
New York
SXSW Edu
Austin
LearnLaunch
Boston
GSV
San Diego
Relevant industry conferences
www.svagtech.org/wp/
www.theblockchainconference.com/
www.coindesk.com/events/consensus-2018/
2018.dockercon.com/
cloud.withgoogle.com/next18/sf/
microsoft.com/en-us/build
events.linuxfoundation.org/events/kubecon-
cloudnativecon-north-america-2018/
reinvent.awsevents.com/
qconnewyork.com/
ces.tech/
groceryshop.com/
irce.com/
etaileast.wbresearch.com/
shop.org/
shoptalk.com/
conference.iste.org/2018/
nyedtechweek.com/
sxswedu.com/
learnlaunch.com/
asugsvsummit.com/
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2
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47
Industry
Conference / City
City
Link
Energy
WEEC
Charlotte
EIA Energy
Conference
D.C.
Fintech
Money 20/20
Las Vegas
Finovate
Multiple Cities
Future of Money
San Francisco
Empire Startups
FinTech Conference
New York/San
Francisco
Food
Future Food
Tech NYC
New York
Gaming
Game Developers
Conference
San Francisco
E3
Los Angeles
PAX
Multiple Cities
Healthcare
Digital Health
Summit
Las Vegas
HLTH
Las Vegas
HIMSS
Las Vegas
Rock Health Summit
San Francisco
JP Morgan
Healthcare Summit
San Francisco
Hospitality
The Hotel Experience New York
Insurance
InsureTech Connect
Las Vegas
DigIn
Austin
Industry
Conference / City
City
Link
Manufacturing
QCon San Francisco
San Francisco
Media
New York Media
Festival
New York
Real Estate
National Association
of Realtors
Conference
Boston
Robotics
TC Sessions: Robotics Berkeley
SaaS
SaaStr Annual
San Francisco
Telecoms
Telecom
Exchange NYC
New York
Content Delivery
Summit
New York
Travel
Travel & Adventure
Show
Chicago

" From day one we knew we needed to
take it to the US. The timing for that was
as soon as we had product-market fit."
Alastair Paterson, Digital Shadows
www.energycongress.com/
eia.gov/conference/2017/
money2020.com/
finovate.com/
futureofmoney.com/
empirefintechconference.com/pages/ny2019
futurefoodtechnyc.com/
gdconf.com/
e3expo.com/
paxsite.com/
digitalhealthsummit.com/
hlth.co/
www.himssconference.org/
rockhealthsummit.com/
jpmorgan.com/
global/healthcareconference
thehotelexperience.com/
HX2017/Public/Enter.aspx
insuretechconnect.com/
dig-in.com/conference/
digitalinsurance-2018
qconsf.com/
mefest.com/
nar.realtor/convention.nsf/
techcrunch.com/events/tc-
sessions-robotics-2018/
saastrannual.com/
thetelecomexchange.com/nyc/
contentdeliverysummit.com/2018/
travelshows.com/
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Can you sell like an American?
Many Europeans think that common language means understanding,
thereby skipping clarifications and confirmations. Until a contract is signed,
it is unwise to assume agreement.
Communication
American culture is direct and emotionally expressive.
Even if you've spoken English your whole life, its style
might not come naturally. To close deals, you need to
say what you want and what you offer clearly and
persuasively.
Conversations will involve less small talk than might be
your custom; instead, many Americans "cut to the
chase" in a way that can appear cold to Europeans.
Americans are not used to the European custom of
self-deprecation; instead, Americans value projecting
confidence and self-promotion. Direct feedback (which
can feel harsh to a European) is much more common
and should not be cause for alarm.
Going native
Localization is a key part of your US market entry.
More than the language, it speaks to the message:
The arguments and phrasing that resonate with your
American audience. This message might be very
dissimilar in content and style to your European pitch,
so make sure you have local input from trusted and
seasoned partners in developing that content. Contracts,
currency, marketing collateral, customer service - all
require revisions. Small slips - such as date formats
(M/D/Y vs. D/M/Y) can cause miscommunication.
Meetings
Americans are inherently more forward. The US
approach to business networking is quite different to
Europe: it is quicker and more transactional. Americans
have shorter meetings than Europeans: 30 minutes is a
common standard.
Regional differences in the US can play a significant role
in business demeanor. A meeting that seemed cold in
New York might yield a contract on the same day, while
a warm and enthusiastic reception in Los Angeles might
only be a measure of politeness and hospitality, not of
real business interest.
Web demos
If you're doing enterprise sales in Europe, you'll likely be
expected to attend a meeting in person. In the US, it is
not uncommon to sell over web demo or video call,
given the country's geographic scale. In large and
complex deals, some face-to-face meetings will still be
required but the relationship can be developed and
nurtured remotely.
" Early sales wins are crucial; you're burning cash here and you need
to have momentum; until you have happy flagship accounts you
shouldn't scale the sales organization."
Tim Brown, Maxymizer
" You need to have 'aggressive selling and marketing' as a mental model
in the US. It is a market that requires a combination of boldness,
assertiveness, and professionalism. European founders could rev up
their approach by a couple of notches."
Ari Salonen, Midaxo
49
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51
How will you price your products?
Pricing is often one of the most overlooked drivers of growth. Just as most
other aspects of your business, your pricing may also need adjustments in
your US expansion.
Your pricing model
The unit economics of your business and the timing
when you can expect to achieve profitability should be
clear to you. Identifying your basic pricing unit will allow
you to calculate the Lifetime Value (LTV) of a customer
once you understand your Customer Acquisition Cost
(CAC). At a minimum, a profitable pricing model
requires a LTV/CAC ratio greater than 1 for each
customer. Overall, the lower the LTV/CAC ratio, the
longer it will take to recoup the cost it took to acquire
each customer.
While it seems basic, don't take it for granted that
economics that work in Europe will be viable in the US.
Competitive pressures on the pricing side coupled with
higher CAC in the US can make the economics unviable
for many businesses.
With a firm understanding of your unit economics, you
can find the right pricing model for your company's
short- and long-term growth strategy:
Value-based pricing setting prices based on the
perceived value of your product to the customer.
Competitor-based pricing using competitor pricing
as a benchmark to determine pricing instead of
looking at costs or consumer demand.
Cost-plus pricing pricing your products to cover not
only the cost of production and overhead but also the
percentage of profit you need.
Demand-based pricing as the name suggests,
pricing that uses perceived consumer demand to
predict the optimal combination of volume and profit.
This is more common for wholesalers and retailers.
Of the four pricing models, most early companies are best
suited, and should aspire to, value-based pricing when
going to market internationally. Value-based pricing
requires deep understanding of your target customers and
the market segment in which you are entering pre-work
that helps you determine your localized strategy.
" On your unit economics, take every single metric and stress-test every
single variable against comps in the US" Rytis Vitkauskas, YPlan
Localized strategies
Spotify is a great case study in localized pricing strategy. Spotify came up with over 25 different pricing models when
entering new international markets.
Knowing how vital it was to get pricing right, particularly in markets where paying for music was rare or an outdated
concept, Spotify spent time and effort understanding the variables that might lead to different pricing sensitivity.
That's why in the US market they came up with a tiered plan: one for families, one for students and one for
standalone users.
Understanding the buying decision process for each of its personas, in each of its geographies, Spotify was able to
develop a local strategy that was appropriate for each market.
Get feedback from your team
Pricing should include input from your Management and
Finance teams but also Sales, Marketing and Product
teams those functions are close to the customer and
can help you figure out what customers are willing to
pay. Additionally, each function uses pricing in different
ways: Marketing thinks about how pricing reflects the
brand's overall positioning; Sales uses pricing to close
sales and convert customers; Product needs to
understand the value of what they are creating in the
eyes of the customer. Consider creating a pricing
committee with a member of each of these teams to
meet and assess pricing regularly.
Pricing shouldn't be static
The final rule of pricing your product in a new market:
do not set it and forget it. Even in the off-chance that
you enter the market with the perfect price point to
achieve strong market penetration, competitive
dynamics can quickly shift as can the perceived value of
your product in the eyes of consumers. In the age of the
empowered consumer, companies should approach
pricing with a more flexible and iterative mindset,
evaluating pricing every 3-6 months.
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4
Then Do
Who is leading your team?
Who is on your US advisory board?
How do you set up in the US?
How do you protect your IP?
Where will your office be?
Which taxes are you liable for?
How do you build a high performing team?
How do you successfully fundraise in the US?
What are important considerations in fundraising from US Investors?
Who is leading your team?
If the US is your most important market, it merits a key member of the core
team. Who will you send over from Europe to build up culture?
"Americans love an underdog story, but they want to hear it from the hero's mouth."
The choice of US lead is critical: You need someone trusted by the CEO to build, sell and have complete dedication
to the effort. We've written before about the various lessons learned by over 50 VC-backed CEOs in the US, and the
consensus around one particular issue is clear: CEO and/or Founder DNA is a necessary - if not sufficient - condition
for success in the US. When asked about the #1 insight the CEOs tell
other entrepreneurs about entering the US, the most cited phrase
was a variation of "a founder has to move to make it work."
" If it is your most important market: send a key member of the core team.
Don't hedge. Commit." Rhodri Thomas, Swiftkey
Irrational "inevitability" & other confessions
of venture who launched in the US
" Do it yourself or don't do it at all. And hire local talent in any new market
that you are going after" Ryan Gallagher, Iovox
" When you're first on the ground there's a lot to do and there often isn't a team
physically there to support you. The default expectation can be that, being local,
you're going to do everything. Ask for help from HQ: for example, calling real
estate brokers, getting referrals for people to interview, introductions to the
right connections. If you're the first on the ground, you should make sure you're
spending your time doing the things that actually require you to be there in
person so that you have maximum impact." James Allgrove, Stripe
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It's a point worth emphasizing, given its importance to your success at home and abroad: If you cannot spare a key
member of the team, the domestic business is likely not ready for the expansion; if you cannot have a key member of
the team on the ground, the US operation is likely to suffer on a variety of fronts:
US customers will be less likely to trust
your commitment to this market.
Market credibility and signaling commitment are
important given the level of competition in the US.
All things being equal, Americans are more likely to
purchase products and services from local companies.
The absence of key executives on the ground can signal
that the US is secondary and raises questions about
the company's commitment to the market long-term.
Ultimately, " Americans love an underdog story, but
they want to hear it from the hero's mouth."
The internal culture is likely to diverge -
and suffer.
Culture is critical for hiring, retention and brand identity
- and consequently critical for your success as a company.
The culture of the organization is defined as the collective
behavior of all its members, and it takes intentional and
concerted effort to model it and incentivize its healthy
development.
" There's no smooth way to set up in the US; there will be mistakes; you just have to
adapt quickly; the nucleus of the team has to be a completely trusted exec person
who built it in Europe - they bring the culture, the product knowledge, the value of
the service or product, the zeal to the operation that you can't replicate with a US
newcomer" Tim Brown, Maxymizer
" You need to figure out where you need to adapt to American culture and
where its more valuable to keep your European DNA. There's a lot to be said
for applying the rigorous, disciplined and detailed approach taken by many
European founders. You can build some really big businesses that way."
Ed Boyes, US CEO, Hello Fresh

A common mistake is to assume the culture you've built will transition to the new US office seamlessly. Even with a
leader on the ground there will be challenges, as local practices and the lack of corporate memory of the new office
influence the behaviors of the new members of the team.
Effective remote communication and decision-making in transcontinental teams is still a challenge. While collaboration
tools have improved across the board and video calling and project management software are having their best day
yet, those tools are most beneficial for well-defined, structured and agreed-upon projects. When it comes to defining,
structuring and agreeing on projects, remote tools still fall short of the benefits of in-person communication and
decision-making, particularly in situations of scarce resources and important trade-offs. Company building is about
prioritization, and prioritizing in the midst of different contexts is much harder.
What is your plan to mitigate these shortcomings?
Being the US lead is a huge challenge, so rely on support from HQ and give yourself a pat on the
back from time-to-time.
" It's really important to have people spend time in other offices and transfer
their learnings, not just coming together at offsites, but actual tangible
working time." Joel Frish, Prodigy Finance
" You don't end up running a company in a new country by accident. It's worth
remembering that you asked for the fight and fights don't go all your way all
the time. If it were easy, everyone would do it. Remembering that helps you
stay motivated and to come out fighting!" Will Grogan, VanMoof
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Who is on your US advisory board?
Building a strategic advisory board can be an effective way to speed up your
sales cycle, gain credibility and be introduced to key stakeholders at your
prospect customers in the US.
When Yext, a B2B tech company that powers location data in search results, wanted to grow its
customer reach in the US, its team was intentional about the verticals it wanted to dominate.
It set out to recruit a 12-person advisory board within those verticals, with equity grants. The
result? Several key sales conversations and successes at large US corporates. One advisory
member alone opened doors to three major food accounts for Yext, garnering its needed
beachhead in that market.
Why?
An advisory board is not the same as a Board of Directors
it has no fiduciary duty or authority over the company. Its
purpose is to fill knowledge and network gaps within your
company or your own background.
Most companies don't engage their advisory board in
meetings as a group; instead they reach out to specific
advisors as needed and set different frequency for those
interactions.
How?
Many companies use advisory boards to help with
product development or sales strategy, or to introduce
them to valuable clients, suppliers and investors.
Since advisory boards are not engaged with governance,
you can focus the work and input of those advisors
much more narrowly to their expertise.
There is more flexibility on the time and level of
engagement the advisor can offer and you can reach out
to specific advisors individually as needed. Remuneration
should reflect the advisor's level of engagement.
Who?
An advisory board can be a bounty when you find the people who are experts at solving a set of problems you have,
engage them with clear expectations and rewards, and turn to them whenever you have issues related to that
problem. To find the right people, you have to be clear on what problems you want them to help you solve.
When it comes to engaging advisors, think of it as the
same recruiting challenge you have for roles in your
company: you want expertise and you want results, and
therefore finding the right advisors is key. Once you've
identified the clear objective for your advisor, it is easier
to have targeted conversations, since you can be specific
in your wish list. For example, if your goal is to grow a
base of customers in a particular vertical as was the
case with Yext one possible strategy would be to:
Ask your customers or prospect customers who
they respect.
Ask your Board of Directors and industry
connections for referrals.
Have a point-of-view related to the industry,
and build a profile and relationships based on
your expertise.
?
?
?
Compensate advisory members appropriately
It is a good idea to compensate your advisors, either with cash stipends or stock awards. In addition to aligning
incentives and recognizing that expert time is valuable, compensation will make you more disciplined about the
caliber of advice and support you are seeking and getting.
Equity grants are a very cash-effective way for ventures to gain credibility within the market by enlisting
decision-makers to support their efforts. In the United States, grants usually range from 0.10% to 1% depending on
company stage and the level of involvement of the advisors. For example, the Founder Institute suggests in their
advisor template that compensation be set at:

Standard performance level

Commitment
Services
Compensation
Attend quarterly meetings to
provide feedback on Company's
strategy for at least one hour.
Provide reasonable response to
email requests by Company.
Promotion: On top of the regular
advice and insights, Advisor agrees
to actively promote and make
introductions on behalf of the
Company through Advisor's overall
network of business contacts,
including forwarding the Company's
business plan and other materials
as requested by the Company.
Idea Stage is 0.25%
Startup Stage is 0.20%
Growth Stage is 0.15%
" As well as the quality of 'content' of their advice, there is a reputational benefit
to Advisory Boards. Ours has very credible people, and their credibility reflects
back onto us." Rupert Baines, UltraSoc
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Strategic performance level

Expert performance level
If you choose to compensate advisors with stock, consult professional advice to create vesting schedules. For example,
one common approach is straight-line with 3-month cliff, 2-year vesting with single-trigger full acceleration upon a
liquidity event. Plan for a proper stock transfer and have an exit plan should your advisors want to sell their shares.
Seek professional advice on potential conflicts-of-interest that might arise if your advisors work for other companies.
Have it in writing
Speak to your lawyer before establishing and engaging an advisory board; by and large, it is wise to have members
sign non-disclosure agreements, draft a charter outlining advisory board responsibilities and compensation, and
provide advisory board members with written indemnification. Also consider incorporating an annual review process
into the agreement, such that there are ongoing occasions to review and discuss whether the relationship is
productive and should continue.

Resources

How advisory boards power up your venture
Commitment
Services
Compensation
Standard performance plus:
Attend monthly meetings to
provide feedback on Company's
strategy for at least one hour.
Attend one additional monthly
meeting for up to one hour
with a potential customer,
investor, strategic partner,
vendor or employee.
Standard performance plus:
Recruiting: Advisor agrees to assist
Company in finding additional,
potential founding team members
and employees through the Advisor's
overall network of business contacts.
Idea Stage is 0.50%
Startup Stage is 0.40%
Growth Stage is 0.30%
Commitment
Services
Compensation
Strategic performance plus:
Twice monthly meetings to provide
feedback on Company's strategy
for at least two hours each.
Strategic performance plus:
Contacts: Advisor agrees to make
introductions to and assist in the
acquisition of marquee customers,
strategic partners and key industry
contacts and attend meetings
with such potential customers,
partners and key contacts.
Projects: Advisor agrees to assist
the Company on at least one
strategic project as requested
by the Company during the
term of this Agreement.
Idea Stage is 1.00%
Startup Stage is 0.80%
Growth Stage is 0.60%
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61
How do you set up in the US?
When setting up a US legal entity, take advice early and account for
commercial, legal and tax implications of US incorporation.
How do you establish a US corporate entity?
When and why incorporate a US entity? If a
non-US company is generating revenue and profit in
the US it will be required by law to pay the applicable
Federal, State and City taxes. If you're hiring US
employees, you should consider establishing a US
corporate entity.
What is the best legal structure for your
business? The most common options for high growth
small businesses are C-Corporation, S-Corporation, or
a Limited Liability Company. For many startups the
foreign ownership restrictions will eliminate the option
of setting up an S-Corp and the desire to have robust
ownership principles and division into stocks or shares
will eliminate the option of an LLC. C-Corp is the most
popular structure.
Source: USA-Corporate.com
?
?
In which state should you incorporate? The vast majority of Fortune 500 companies are incorporated either in
Delaware or Nevada. Delaware is the most favored within the venture community for a number of reasons:
Has a well-established set of case law and precedent;
The new entity can base itself anywhere in the US since advisors US-wide will give Delaware corporate advice;
Has a dedicated Court of Chancery focusing on resolving corporate disputes;
Does not tax income earned from intangible assets such as trademarks and leases;
Offers flexibility in the organization of a corporation and the rights and duties of board members and
shareholders; and
Provides greater privacy for director and shareholder identities.
The basic requirements for incorporating in Delaware include:
Completion of an annual report submitted online;
Payment of franchise tax: the range is between $175 - $180,000
and is linked to the number of authorized shares; and
Maintaining a "registered agent." If a company incorporates in a
State but does not have permanent operations there (for example
no employees), it will need to appoint a "registered agent." This is an additional cost, typically under $200 per year.
Service providers such as NRAI or BizFilings will fulfil this requirement and will forward mail sent to the registered
address as required.
" Get expert advice for all legal and admin issues; don't try to find out answers
on your own - focus your efforts on key hires and goals for your first year."
Pablo Graiver, Antidote
?
How to calculate franchise taxes
BizFilings
NRAI
C Corp
S Corp
LLC
Foreign ownership
Can be owned by an
overseas entity
Non-US citizens cannot
retain shares in these
Can be owned by an
overseas entity
Tax
A corporation is considered
a separate legal entity
and must submit a tax
return and pay income
taxes on its profits. In some
cases, this can lead to
"double taxation," where
the corporation is taxes
on its profits, then when
the owners take those
profits out, they will need
to report the dividend on
their personal tax returns.
Can opt for Pass-
through taxation or
more conventional
Corporate Taxation
Pass-through taxation
- This means that the
business itself doesn't pay
income taxes on its profits;
rather any profits or loss
are passed through to the
owners (called members)
and reported on their
personal tax returns
Meetings
AGMs Required
AGMs required
No requirement
for an AGM
Owners
Owners are called
shareholders
Owners are called
shareholders
Owners are called
Members
Ownership
Ownership represented
by shares
Ownership represented
by shares
Ownership divided by
members as they see fit,
no concept of shares
Governance
Governed by Directors
Governed by Directors
Governed by Members
Official documentation
Articles of Association,
Certificate of Incorporation Articles of Association
Articles of Organization,
Certificate of Organization
Other
Certain retirement
plans, stock option and
employee stock purchase
plans are only available
for C corporations
C Corp
S Corp
LLC
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General information
Steps to incorporate
Apply to incorporate in specific state.
Establish a registered agent in that state.
Submit formation documents.
Maintain registered agent.
Maintain state specific taxation and reporting requirements.
Resources
Specialists in the field
What is the right banking solution for you?
While opening a business bank account as an international entity is generally less
onerous in the US than in Europe, there are several things founders should know
before starting the process. With a seemingly endless range of options for who
to bank with, here are a few key points to consider before selecting a provider.
Legal requirements
Regardless of which bank you go with, in order to open a business bank account in the US you will be required to
provide four pieces of information: the articles of incorporation for your company, an EIN number, government-issued
photo ID and Know-Your-Customer (KYC) information for whomever is signing. Those requirements are uniform across
the board regardless of banking institution.
Individual bank requirements
In addition to the legal requirements above, banks will likely require additional information from you that may vary, and
some will have more requirements than others. Some common items and disclosures required by banks, like First Republic:
US business address - if you are opening a bank
account prior to setting up your physical office, you
will need to choose a bank that does not require a US
business address.
Minimum deposit - varies by bank, but generally a
nominal amount.
Certificates of good standing - some banks require
these documents to prove you are authorized to do
business in a particular state.
Certificate of incumbency - this document simply
identifies and verifies the directors and officers at your
company that are authorized to enter into legally-
binding contracts on behalf of the business.
Banking resolution - this document specifies who
may sign checks, open a bank account or make
banking decisions on behalf of the company and is
issued by the Board of Directors.
Operating agreement / corporate bylaws - these
are generally not required by most banks but are
considered "nice-to-haves."
Certain banks may allow your company to bypass some of the non-legal requirements or can expedite the setup
process if you have a reliable and trustworthy referral source with whom the bank already has a relationship. For
instance, if you are VC-backed and your VC firm has a well-established reputation, your VC can vouch for your
company and help reduce some of the information requirements.
Establishing the right corporate
entity in the US
Putting the right insurance
in place for the US
The differences between an LLC
and a Corporation
Daniel Glazer -
Wilson Sonsini
Victor Boyajian -
Dentons
Ed Zimmerman -
Lowenstein Sandler
Ted Rosen -
Akerman
How to incorporate in the US from outside
the US geographies
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2
3
4
5
" Build a book of business or sufficient demand before building your base
of operations in the US. Start small and test the market; you don't need
to invest heavily to assess traction." Paolo Wyatt, graze.com
Completed by
Estimated Cost
Local counsel, engaged by the Company
$2,000-5,000
How do you incorporate a company in the US?
The process is set out in five steps below. Although this looks straightforward, it is sensible to ask the company's
lawyers to handle this process as the cost of a mistake or remedial action may be significant. The typical cost to
incorporate a C-Corp in Delaware is $2,000-5,000.
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2
3
4
5
6
3. Then Test
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4
Do
Setting up an account in-person vs. online
Most of the bigger, international banks like First Republic, SVB, HSBC, will allow you to set up your US bank account
online without being physically present in the US. However, even when that is the case, it is usually recommended to
have someone present in the US either from your team, your VC or accounting firm. If there are follow up questions
about your business, banks sometimes prefer to handle that face-to-face rather than online.
In general, banks are more concerned about what your business does and what your intentions are with your move to
the US They may also have lists of companies, business lines or industries with which they will not work - an example
currently is crypto-wallets or blockchain companies that may be pursuing an ICO. These types of companies are
somewhat unregulated and could be considered a risk which a bank may not accept.
Choosing a banking provider: key considerations
Just as banks have a set of criteria from which they choose businesses to work with, you should also have criteria for
choosing a banking provider. Here are some of the key things to consider when evaluating a bank:
Do they have a dedicated banking team that you can
call or email directly? Making sure you have direct access
to your bank in the case of an emergency is crucial.
Can all the banking be done seamlessly on mobile
or through an online portal? One thing to keep in mind
if you are using the same bank in the US that you use
in Europe: you will most likely have separate portals
for each account. Banks rarely have one portal for US
and European bank accounts which means two sets of
login credentials and two accounts to manage.
What fees and charges does the bank have? In
particular, pay attention to late fees, interest charged
and withdrawal limits often hidden in the fine print of
banking agreements.
Do they have a division that specializes in working with
startups? Having a bank that works with other startups
can be important in the long-run. Startups operate
differently than other small and large businesses and it's
helpful to have a bank that understands the needs of
startups and how they operate.
What can the bank provide other than banking
services? While a business bank account might be all
you need right now, it doesn't hurt to think long-term
about how your banking relationship can benefit your
startup. Is the bank a potential customer? Will the
bank be willing to provide introductions to investors,
attorneys or provide other financial advice?
" Social Security Number; bank account; phone: the three
basics. Everything else flows from them in the US and
without them it's very difficult to move onto the bigger
things like where to live and getting paid. Get these
sorted before you arrive. It's even worth considering
visiting a few weeks before you actually move to do so."
James Allgrove, Stripe
4
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How do you choose the right business
insurance?
Insurance is one of the first things your startup will need after incorporating in
the States. There are few off-the-shelf insurance products for technology-based
businesses, so getting specialist advice is essential in understanding your business'
insurance risk implications.
Some of the risks faced by European entrepreneurs enticed by the promise of the US marketplace can be mitigated
and controlled with intelligent insurance planning.
What insurance policies should you consider?
We break down the insurance world into three categories: Mandatory, Sensible, Additional.
Mandatory: In the US, certain insurance is required by law.
Workers' compensation is insurance against your liability to employees for injury or illness arising from the work
they do for you. You should put this in place especially if you have employees working in the US for extended
periods of time.
Third party motor insurance is mandatory if you use vehicles on the road in the USA on company business,
and may be mandatory for personal use (depending on your state).
Sensible insurance protection: Although these may not be legally mandated, they're of critical importance
to most organizations in the US. Your clients and suppliers may also require that you have them in place.
General liability insurance protects your business against allegations of negligence resulting in injury to third
parties or damage to their property. It also protects you where you're legally responsible for any damage or
injury caused by a product you have supplied.
Errors & omissions insurance protects you against allegations that your negligence has led a third party to
suffer financially. This is particularly relevant if you offer professional services or skills for a fee.
Directors & officers liability insurance (D&O) - The term "limited liability" can be a misnomer; individual
directors and managers within an organization may face potentially ruinous personal liability for the decisions
and actions they make. Protect your key decision-makers with a "D&O" policy.
Property insurance protects your physical assets including buildings, improvements, office and laboratory
machinery & equipment, computers & data, stock, documents, lab books, prototypes and R&D materials,
temperature-sensitive stock and mobile equipment.
Consequential loss insurance protects your income streams where there's an unexpected interruption to
business operations. The insurance can protect you against loss of revenue, profit and other unexpected costs.
Additional: other types of insurance you should consider.
Marine cargo/inland marine - It's much safer to insure your own property in transit. Reliance on your freight
forwarder's insurance policy for lost or damaged freight could leave you significantly out of pocket.
Employment Practice Liability (EPL) - The cost of employee-employer disputes through tribunals and court
actions is a significant threat to profitability. EPL protects against allegations of harassment, discrimination,
unfair dismissal, and wrongful disciplining.
Cyber and data liability - In the wake of numerous high-profile cybercrime cases, including network and data
breaches, businesses can buy insurance that protects against costs, expenses and liability arising from Breach
of Privacy, Data Breach Notification Costs, Cyber Liability, and costs of restoring or recreating data.
What type of insurance do start-ups need in the US?
1
2
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LLC
S Corp
C Corp
General liability insurance + business property insurance
Errors and omissions insurance
Cyber liability insurance
Directors and officers insurance
-
Key man insurance
-
Employment practices liability insurance
-
-
Key questions
What additional risks need to be considered?
Are you with the right insurer?
Do your existing policies provide the requisite cover for the US already?
If not, can they be easily extended?
How much is it all likely to cost?
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Items of note:
It's also worth checking your investment agreements, since specific types of insurance are often required by investors.
If you have employees operating in the US on a short-term or secondment basis, your company's travel insurance
may not cover them for an extended period of travel. As a result, it is advisable to check this in advance.
Monthly insurance plans for foreign travelers such as IMG Global are intended to replicate
the level of health cover that a full-time employee may receive as part of an employment package.
It can be worth reviewing the terms and conditions that you will give to US clients in order to make sure this
matches with the level of cover you are comfortable giving. In many instances, restricting the level of "consequential
loss" is also advisable.
If you are thinking about launching in the US in the next 1218 months, it is worth considering that you may need
to change insurers in the near future so do not agree to any long-term arrangements with your underwriter.
Whenever there are any material changes in the business, such as a change of address or alteration of business
activity, you are required to update your insurer or broker as this may otherwise invalidate your protection.
From talking to specialists, having a group policy which covers all the international entities is far more robust than
having multiple different policies covering specific geographies. Otherwise, there is a risk that otherwise a claim
that may arise could fall between policies.
Specialists in the field





How do you protect your IP?
IP related issues deal both with maximizing a company's value and minimizing
the risk of other players making a legal claim that can damage your business.
Patents
In the US, a single patent covers the whole of the US. A US patent is granted by the federal US Patent
and Trademark Office (USPTO) but enforced by any district court which considers its use across the
whole of the US. Since 2013, the US operates on a 'first-to-file' system.
In IP litigation there is little likelihood of a 'loser pays' judgement, so US IP litigation costs can become expensive
quickly. Do your research up front to understand the patent landscape. Market entrants are unlikely to be targets for
'patent trolls,' who typically go after larger companies. Instead, competitors may use patents to stop a new entrant
from gaining a foothold.
What to put in place
Assessing the level of risk associated with moving to the US is best achieved with a specialist IP advisor.
Whenever filing for IP in Europe you should consider a US filing, at least for the main inventions.
Have you completed an IP review for any new
product launches?
Have you considered IP insurance, especially if a risk
audit highlighted IP as a key risk?
Have you translated employee IP invention clauses
into US contracts properly?
Do you have a dedicated IP champion?
Do you have a well-documented Trade Secrets policy?
How the US is different from Europe
The main ways in which the US market differs include:
The US market is half the size of the EU, but a single
patent covers the whole of the US rather than several
national patents in Europe;
A US patent is granted by the federal USPTO
(uspto.gov), but enforced by any district court
which considers use across the whole of the US; and
IP litigants each cover their own costs in the US. There
is very little likelihood of a 'loser pays' judgment. This is
a stark contrast to the EU and, with US litigation costs
being so high, avoiding litigation is a sound strategy.
Elaine Lamb -
La Playa Insurance
Ralph Torrez -
Sweet and Baker Insurance
Melissa Gato -
Shoff Darby Insurance Agency
Octopus Ventures IP blog post
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The investor's perspective
Not all businesses are created equal when it comes to IP. It is important for founders to be clear about the role
IP plays within their business, both with themselves and with their prospective investors. For some companies, IP
will be core to the strategy and a primary reason why the business was founded in the first place: for example, to
commercialize a unique invention incubated by professors at a world class university. For other companies, it will
be an asset, but one of many held by the business.
The IP position of your business is very unlikely to be the reason an investor will not invest in your
business - they may make it a term of the investment to put some of the funding towards progressing
a patent grant process or engaging suitable attorneys but would rarely walk away altogether.
In discussing the investor's perspective on IP, we discovered the following:
IP is a valuable asset which, ideally, is fully protectable
and defensible, creating a barrier to entry for other
competitors.
In diligence, there should be no red flags in relation
to potential infringements of others' IP nor should
there be a credible risk of infringement claims being
made by others against the IP of your business.
Investors understand that generating and securing IP
(particularly patents) can take a great deal of time
and money and divert attention from executing on
business strategy.
Spending vast amounts of time and money on your
IP portfolio is unlikely to make sense before a Series
A fundraise.
An equity investor is not a bank and is not looking to
protect its downside by neatly packaging up your IP
for a sale, should the business start failing.
Specialists in the field
US patent attorneys:
UK patent attorneys:

Resources

Jon Calvert -
Clearview IP
David L. Cohen -
Kidon IP Corporation
Melissa Gato -
Shoff Darby Insurance Agency
Chris Tunstall -
Carpmaels & Ransford
Clare Cornell -
Finnegan
Ian Armstrong -
HGF
Peter Langley -
Origin
Get your Intellectual Property story right: Managing IP risks for success
A summary of the US policies by the World
Intellectual Property Organisation
Global patent filing trends
Global comparison of trade
Secrets protections
Interesting article on the small
Texan town of Marshall, one of the
most active courts in IP globally
Good explanation of trade secrets
from the USPTO
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Where will your office be?
While many European entrepreneurs think Silicon Valley, New York or Boston
are the hubs where they should be localized, there are a variety of reasons why
taking a closer look at other cities in the US might be better for your business.
New headquarters or subsidiary?
If you're setting up a new HQ, you'll be sourcing most functions in your business. In that case, you should consider the
talent pool of geography, as well as the local ecosystem. For example, New York City is central to finance, media and
fashion, while cutting edge AI technical talent is more prevalent in Silicon Valley. If setting up a subsidiary you should
think about operational costs as well as talent needs.
Do you have a firm grasp on the costs and regulatory burden of the new location?
Unlike European geographies where businesses are
subject to just national regulations, the US gives its
states autonomy to regulate businesses on a local basis.
It is key to have experienced local counsel to evaluate
the different regulatory requirements of across
different states.
Many Europeans are unaware of the fact that
Americans regulate on a federal, estate, county and, in
many instances, city level: in many places, you need a
specific address to know exactly what your regulatory
burden will be, especially in regard to employment law.
" We had several ideas to locate satellite offices on both coasts, then realized we
were just stretching ourselves too much. We chose NYC given our business is
travel related and hotel clients are based here, as well as being East-side for easy
travelling to and from our European bases in London and Berlin. In the end, we
had a co-working space in Oakland on the west coast, but we decided to embrace
work-from-home culture here and it's allowed us access to talent from across the
country without the infrastructure requirements of many satellite offices."
Rob Day, Secret Escapes
Are you aware of state/government sponsored support for your business in different
geographies?
While the regulatory complexity is a downside of operating in a decentralized system such as the United States, one of
its benefits is that states find themselves in competition for investment and have an incentive to attract businesses to
their geographies. Many states operate incentive plans to support new businesses, including grants for job creation,
training, and facility improvement.
You should research the jurisdiction's local economic development agency in the US, every state and major city has one.
Key factors to consider in location rankings
The table below provides a starting range of possible categories and decision weights in assessing the competitiveness
of various locations. Use it as a starting point to your evaluation, but adapt it to the needs and priorities of your
operation, according to your answers to questions such as:
What are the new location's objectives?
Which functions will be at the new location?
I s there a time zone that supports/complements our
existing work?
How valuable is proximity to our strategic partners?
Which infrastructure does the new location need? (i.e.
proximity to airports, dedicated and secure servers,
utility load, etc.)
What is the profile of talent we'll need?
What are the work-visa requirements for
secondments / foreign nationals?
What is the available level of government / state-
sponsored support?
What are the salary and benefits expectations of
talent in the proposed location?
How robust is the local infrastructure for employees?
(i.e. cost of housing, education, public transport,
cultural options etc.)
Setting up operations
Hiring talent
Business reporting
Americans regulate on a federal, estate,
county and, in many instances, city level
Dimension
Category
Metric
Economic
considerations (60%)
Labor cost
Annual salary cost (fully loaded for selected finance,
HR, IT and procurement positions) in US$
Cost of office space
Office rent for Class A office space
Other costs
Average cost of telecom charges,
average flight cost to capital
Workforce
quality (20%)
Workforce availability
University workforce availability,
total workforce availability
Workforce quality
Quality of education, labor productivity index
Rigidity of labor law
Index of ability to hire and fire personnel
Language availability
and quality
Availability and mastery of language skills
Infrastructure
availability &
quality (10%)
Availability of office
infrastructure
Availability of office space
Availability of general
infrastructure
General infrastructure, electricity
supply, airport availability
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Source: The Hackett Group
Rental costs in US metro areas20
Do you need capital?
One of the common drivers when considering where to set up a new operation will be your ability to access capital as
you scale your business. Does that mean you have to head for Silicon Valley or New York to be as close to the capital
as possible? Do US VCs prefer to work with startups that they can engage with face to face on a regular basis? While
most venture capital flows to dense and dynamic innovation centers, usually large global cities, an increasing array of
US metro areas is seeing rising numbers of investments.
If your startup is compelling enough, your office location will not be a deal breaker for investors, and when it comes to
the West Coast in particular, our default position would be to encourage you to look elsewhere as the Bay Area could
cripple your budget.
VC Funds are investing in areas outside of Silicon Valley and New York City
VCs are investing beyond their back yard
20 Q4 2017 US Office Market Outlook Report, Colliers International 15 March 2018
Dimension
Category
Metric
Risk assessment (5%)
Fraud risk
Corruption perception index (CPI)
Political risk
Political instability index
Data and intellectual
property (IP) security risk
Intellectual property (IP) protection,
electronic data protection
Foreign-exchange rate risk
Index of exchange-rate fluctuation (against US$)
Natural disaster risk
Natural disaster risk index
Quality of judicial system
Enforcing contracts index
Quality of business
environment (5%)
General economic climate
Ease of doing business index, wage rate
inflation, economic health, tax burden
Politics and quality of life
Freedom index, quality of life index
Location
Avg annual rent
($/Sq Ft)
San Francisco
84.51
New York - Manhattan
78.3
Washington DC
60.27
Boston
59.63
Austin
50.39
Seattle
46.5
Chicago
44.63
Los Angeles
41.57
21 Crunchbase: Counts of Venture Deals by Investors of Known Location Between Q1 2012 and November 1, 2017
Denver
35.61
Nashville
33.67
Atlanta
30.34
Raleigh-Durham
29.9
Pittsburgh
29.59
Richmond, VA
23.98
Colombus, OH
19.7
Location
Avg annual rent
($/Sq Ft)
Angel-Seed stage
Company is in the same
State as investor
Company is out-of-State
from investor
Lead Investor
61%
39%
Participant
60%
40%
Early Stage-Seed stage
Company is in the same
state as investor
Company is out-of-State
from investor
Lead Investor
50%
50%
Participant
56%
44%
Late stage
Company is in the same
State as investor
Company is out-of-State
from investor
Lead Investor
40%
60%
Participant
51%
49%
US venture investors' State-based "local loyalty" by stage & role 21
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VCs are investing all over the US
VC investment activity by metro area
10-year growth in # of deals
*Data as of 7/26/2018
Metro Area
2007 2008 2009 2010
2011
2012
2013 2014 2015
2016
2017
Bay Area
1233
1337
1232
1334
1779
2016
2365
2723
2654
2221
2097
New York City
239
304
280
414
605
743
923
1118
1108
940
927
Boston Metro
365
376
336
407
450
491
575
571
632
517
540
Los Angeles Metro
231
262
236
301
368
478
535
655
677
542
586
Seattle Metro
161
166
152
187
210
249
297
279
350
269
308
San Diego Metro
132
141
130
152
161
178
212
246
241
222
227
Austin Metro
98
98
101
134
149
190
233
265
274
216
226
Chicago Metro
61
86
51
119
154
197
213
253
225
244
219
D.C. Metro
100
112
82
129
140
164
197
240
194
198
177
Denver Metro
58
77
67
67
83
116
116
157
174
125
154
Dallas/Fort Worth
65
66
72
76
92
115
170
143
161
138
102
Atlanta Metro
64
73
64
85
103
117
132
155
144
113
116
Philadelphia Metro
64
69
72
82
103
119
112
138
116
122
121
Miami Metro
26
34
39
50
69
91
116
160
132
107
111
Raleigh Metro
59
60
64
67
67
78
83
102
123
98
99
St. Paul Metro
62
52
57
65
83
91
86
102
106
92
76
Boulder Metro
47
51
50
70
81
66
80
92
97
88
101
Portland Metro
34
38
41
46
58
69
85
97
83
95
88
Phoenix Metro
38
44
37
38
50
66
80
106
114
80
78
Salt Lake City Metro
51
36
44
42
53
57
58
91
80
55
62
Santa Barbara Metro
20
24
20
27
20
26
34
36
27
41
28
VC investment activity by metro area (# of deals)
0%
50%
100%
150%
200%
250%
300%
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VC investment activity by metro area ($bn invested)
VC investment activity by metro area (10-year growth in investments)
Metro Area
2007 2008 2009 2010
2011
2012
2013 2014 2015
2016
2017
Bay Area
$12.2 $13.3 $11.0
$11.0 $18.2 $15.0 $17.9 $31.8 $35.3 $33.4 $33.0
New York City
$1.3
$2.0
$1.1
$1.8
$3.1
$2.6
$4.2
$6.2
$8.5
$8.5
$13.1
Boston Metro
$3.4
$3.3
$2.5
$3.1
$3.5
$4.0
$4.6
$4.5
$7.3
$6.3
$8.6
Los Angeles Metro
$2.2
$2.0
$1.3
$1.7
$2.2
$2.8
$2.4
$3.8
$5.0
$5.3
$4.8
Seattle Metro
$1.6
$1.1
$0.7
$0.7
$0.7
$1.3
$1.2
$2.2
$2.1
$1.5
$1.7
San Diego Metro
$1.6
$1.4
$1.1
$1.1
$1.2
$1.7
$1.3
$1.7
$1.7
$1.9
$1.9
Austin Metro
$0.8
$0.9
$0.4
$0.7
$0.8
$0.9
$0.9
$1.4
$1.3
$0.9
$1.2
Chicago Metro
$0.4
$0.9
$0.3
$1.1
$1.8
$0.8
$0.8
$1.7
$1.4
$1.2
$1.9
D.C. Metro
$0.7
$0.8
$0.5
$0.9
$1.4
$0.6
$1.1
$1.0
$1.2
$1.1
$1.5
Denver Metro
$0.3
$0.8
$0.3
$0.3
$0.3
$0.4
$0.5
$0.7
$0.9
$0.6
$0.7
Dallas/Fort Worth
$0.6
$0.4
$0.5
$0.4
$1.3
$0.3
$1.6
$0.6
$0.3
$0.7
$0.5
Atlanta Metro
$0.5
$0.3
$0.3
$0.5
$0.3
$0.5
$0.7
$0.6
$1.1
$0.6
$1.1
Philadelphia Metro
$0.7
$0.4
$0.5
$0.5
$0.4
$0.5
$0.4
$0.8
$0.7
$0.8
$0.5
Miami Metro
$0.3
$0.2
$0.1
$0.3
$0.3
$0.4
$0.6
$1.3
$0.5
$1.3
$0.6
Raleigh Metro
$0.5
$0.5
$0.3
$0.6
$0.4
$0.4
$0.4
$0.4
$0.8
$0.7
$0.4
St. Paul Metro
$0.4
$0.5
$0.4
$0.2
$0.4
$0.5
$0.5
$0.5
$0.6
$0.5
$0.6
Boulder Metro
$0.3
$0.4
$0.4
$0.2
$0.4
$0.3
$0.2
$0.5
$0.4
$0.4
$0.3
Portland Metro
$0.2
$0.2
$0.1
$0.2
$0.4
$0.1
$0.2
$0.3
$0.3
$0.3
$0.4
Phoenix Metro
$0.3
$0.3
$0.1
$0.1
$0.2
$0.4
$0.4
$0.4
$0.2
$0.2
$0.2
Salt Lake City Metro
$0.2
$0.2
$0.2
$0.2
$0.2
$0.2
$0.3
$0.4
$0.4
$0.3
$0.6
Santa Barbara Metro
$0.2
$0.2
$0.1
$0.2
$0.1
$0.4
$0.3
$0.3
$0.4
$0.3
$0.2
*Data as of 7/26/2018
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VC Funds are increasingly setting up outside of Silicon Valley and New York City
While VCs in the Bay Area and in New York City raised $17.98bn and $2.24bn in 2017 respectively, over 100 VC funds not
headquartered in either metro area have raised a fund of $100m or more in the last 5 years.
VC funds set up by metro area (# of funds)


VC funds set up by metro area (# of funds 10-year change)
*Data as of 7/26/2018
*Data as of 7/26/2018
Metro Area
2007 2008 2009 2010
2011
2012
2013 2014 2015
2016
2017
Bay Area
55
72
38
54
57
64
73
111
112
105
100
New York City
24
10
12
23
24
31
22
40
31
43
30
Boston Metro
28
14
17
12
11
13
24
21
27
31
22
Los Angeles Metro
3
6
3
2
4
6
10
16
18
12
21
Chicago Metro
6
8
5
4
8
10
8
5
11
9
7
Seattle Metro
6
7
1
2
0
4
4
4
15
12
4
D.C. Metro
7
4
1
1
2
2
2
5
6
5
6
Philadelphia Metro
4
4
6
1
1
3
4
2
2
4
3
Austin Metro
1
4
2
3
3
0
4
6
2
3
1
Boulder Metro
1
2
1
2
0
4
3
2
6
4
3
Salt Lake City Metro
3
3
2
2
1
2
5
3
2
1
0
Phoenix Metro
0
1
0
0
2
3
4
5
4
4
1
San Diego Metro
1
2
0
1
5
2
3
1
1
1
3
Atlanta Metro
3
3
2
1
1
1
3
2
3
1
2
Dallas/Fort Worth
1
2
3
2
4
2
1
3
3
0
0
Raleigh Metro
2
1
1
0
0
1
2
2
3
4
2
Portland Metro
1
1
1
2
1
2
1
1
4
2
1
St. Paul Metro
3
3
2
1
0
1
2
1
1
0
2
Miami Metro
1
2
1
1
0
1
0
1
1
2
1
Denver Metro
2
0
0
0
0
0
1
2
0
1
1
Santa Barbara Metro
0
0
0
0
0
0
1
0
0
0
0
1
2
3
4
5
6
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Funds raised by VCs by metro area ($bn)








Funds raised by VCs by metro area (10-year growth)
Metro Area
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Total
YTD
Bay Area
$16.57
$14.47
$15.57
$4.68
$10.74 $14.34 $13.32
$9.50
$21.06 $20.02 $24.67
$17.98
$15.22 $198.13
New York City
$3.40
$5.05
$1.35
$0.76
$2.32
$4.33
$4.56
$1.61
$7.08
$5.94
$2.58
$2.24
$2.75
$43.97
Boston Metro
$4.80
$6.91
$3.40
$3.16
$2.55
$4.04
$2.26
$4.92
$3.02
$5.06
$6.12
$5.74
$4.15
$56.13
Los Angeles
Metro
$0.26
$0.22
$0.31
$0.27
$0.02
$0.05
$0.11
$0.24
$0.68
$0.34
$0.55
$2.13
$0.58
$5.77
Chicago Metro
$0.37
$0.82
$0.86
$0.27
$0.45
$0.71
$0.16
$0.28
$0.50
$0.48
$0.88
$0.33
$0.21
$6.31
Seattle Metro
$0.54
$2.33
$2.90
$0.00
$0.01
$0.00
$0.33
$0.55
$0.19
$0.69
$0.56
$0.43
$0.38
$8.92
D.C. Metro
$0.69
$1.15
$0.64
$0.12
$0.44
$0.11
$0.02
$0.43
$0.13
$0.55
$0.31
$2.32
$0.19
$7.10
Philadelphia
Metro
$0.64
$0.15
$0.69
$0.59
$0.13
$0.10
$0.22
$0.15
$0.18
$0.24
$0.18
$0.11
$0.00
$3.38
Austin Metro
$0.82
$0.02
$1.07
$0.00
$0.08
$0.13
$0.00
$0.52
$0.29
$0.11
$0.08
$0.00
$0.49
$3.62
Boulder Metro
$0.02
$0.23
$0.11
$0.01
$0.25
$0.00
$0.09
$0.23
$0.06
$0.64
$0.06
$0.01
$0.00
$1.71
Salt Lake
City Metro
$0.13
$0.35
$0.09
$0.16
$0.07
$0.03
$0.13
$0.57
$0.12
$0.25
$0.25
$0.00
$0.08
$2.22
Phoenix Metro
$0.00
$0.00
$0.02
$0.00
$0.00
$0.04
$0.06
$0.13
$0.16
$0.01
$0.03
$0.01
$0.05
$0.49
San Diego
Metro
$0.06
$0.01
$0.83
$0.00
$0.03
$0.50
$0.37
$0.02
$0.17
$0.10
$0.20
$0.16
$0.00
$2.46
Atlanta Metro
$0.22
$0.26
$0.14
$0.16
$0.03
$0.00
$0.05
$0.11
$0.04
$0.26
$0.05
$0.11
$0.00
$1.42
Dallas/Fort
Worth
$0.02
$0.01
$0.10
$0.01
$0.06
$0.33
$0.03
$0.00
$0.03
$0.05
$0.00
$0.00
$0.03
$0.65
Raleigh Metro
$0.34
$0.04
$0.08
$0.10
$0.00
$0.00
$0.00
$0.22
$0.04
$0.03
$0.21
$0.28
$0.01
$1.34
Portland Metro
$0.00
$0.00
$0.00
$0.00
$0.02
$0.00
$0.01
$0.01
$0.01
$0.02
$0.06
$0.01
$0.00
$0.14
St. Paul Metro
$0.40
$0.33
$0.48
$0.03
$0.00
$0.00
$0.15
$0.11
$0.07
$0.01
$0.00
$0.04
$0.00
$1.60
Miami Metro
$0.00
$0.02
$0.16
$0.01
$0.00
$0.00
$0.27
$0.00
$0.30
$0.02
$0.05
$0.00
$0.03
$0.85
Denver Metro
$0.00
$0.20
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.13
$0.00
$0.00
$0.00
$0.00
$0.33
Santa Barbara
Metro
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.03
$0.00
$0.00
$0.00
$0.00
$0.00
$0.03
*Data as of 7/26/2018
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Texas / New Orleans
Austin and Dallas are the major tech hubs in this region,
which also boasts smaller clusters in Houston, San
Antonio and New Orleans. UK tech companies in Austin:
BrainLabs Digital, BYND, Austin Fraser, Safeguard World,
GCS Recruitment, Beamery.
Information on the Texas cities
Information on New Orleans
San Diego
San Diego is currently ranked 4th in the nation
for start-up activity by the US Chamber of Commerce
(behind Boston, Silicon Valley, and New York) and is
ranked in the top-ten for venture capital investment. A
quarter of San Diego's GDP comes from the "innovation
economy" knowledge intensive industries that lend
themselves nicely to start-up activity. Ecosystem includes:
Qualcomm Ventures, UCSD Office of Commercialization
& Innovation, JLABS (Johnson & Johnson life science
incubator), San Diego Airport Innovation Incubator,
San Diego Venture Group (800 members), TechCoast
Angels (largest Angel network in the US). Notable
homegrown companies: Classy, Measurabl, Raken.
Portland / Wider Oregon
Oregon has an established computer (semiconductor)
and electronics sector, led by Intel and Mentor Graphics,
which have significant presences there. Software is
emerging / established; leading home-grown lights include:
PuppetLabs, Cloudability, Elemental Technologies, Jama
Software, Janrain, Jive, Act-On, Simple, Viewpoint, and
investments from Salesforce, AirBnB, Amazon, McAfee,
Mozilla. The Portland high-tech industry continues to grow,
with high-tech employee hiring reaching a 12-year high in
2018. Software investments have grown almost 50% in the
past 10 years. The region is very cost competitive with the
Bay Area and Seattle.
Tech association of Oregon's Techlandia overview
Greater Portland
23 A special thank you to the UK Department of International Trade (DIT) (https://www.gov.uk/government/organisations/department-for-international-
trade) for their contributions. Aside from developing, coordinating and delivering new trade policy for the UK, the DIT helps UK businesses export and
grow into global markets as well as expand in the UK
The Research Triangle
The region of Raleigh/Durham/Chapel Hill in North
Carolina is anchored by three major research
universities: North Carolina State University, Duke
University and University of North Carolina at Chapel
Hill. This "Research Triangle" is a thriving Tech hub,
home to Red Hat, Inc. and SAS Institute. In 2017, North
Carolina start-ups raised more than $1 billion in funding.
Greater Washington DC Area
The Washington DC, northern Virginia and central
Maryland area encompasses large clusters in Cyber
Security, Life Sciences, Big Data, and Analytics. This
Information, Communication, and Technology (ICT)
cluster was originally fostered by the founding of
internet portal pioneer AOL. Maryland's Montgomery
County gave $100,000 of direct incentives to attract
cybersecurity startups, and Arlington, VA has enhanced
its High Tech Zone Incentive Program to provide
tech firms with a broader range of tax incentives.
Which other US metro areas are worth exploring?
There are many options for subsidiary operations across the United States. Hubs such as Chicago, Seattle, Austin,
Denver, San Diego, Portland, Atlanta, Minneapolis or Miami among others offer strong talent and infrastructure.
A number of Canadian cities also merit a close look, including Toronto and Vancouver, two vibrant technology
hubs north of the US border.
Some notable areas23
4. Then Do
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Pittsburgh
Pittsburgh is a booming tech cluster for Artificial
Intelligence and Robotics, anchored by outposts of
Google, Uber (autonomous vehicle test bed), Apple,
Facebook, Philips, and the National Robotics Engineering
Center. Notable home-grown companies include Duolingo,
Argo AI ($1bil investment by Ford), and Petuum Inc. ($93mil
Series B). Growth is supported by Carnegie Mellon
University, University of Pittsburgh, InnovatePGH, and the
Pittsburgh Technology Council. Alphalab is a software
accelerator providing access to funds and an immersive
4-month training program.
More here
Philadelphia
Philadelphia is strong in biotech, digital health,
edtech, & SaaS. Its ecosystem is supported by
StartupPHL, Philly Startup Leaders, Ben Franklin
Technology Partners, PACT, University of Pennsylvania,
Temple, & Drexel University. Healthcare investments
represented nearly 80 percent of the $529.6 million in
deal value that Philadelphia saw in 2017. The largest raise
in 2017 was that of biotech company Complexa, Inc
($63mil series C).
More information on notable startups
" Location is a challenging one - Boston, Austin, New York
and San Francisco are so competitive that availability
comes at a price; you should look at whether the state is
helping with resources, and if you are not familiar with
the market, go get people who are."
Paul Roscoe, Docent Health
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Minneapolis, MN
Avg. Software Engineer Salary: $88k
Metro Population: 3,555,500
Major Industries: Financial Services,
Technology, Biomedical, Retail
Gross Metro Product: $233.9bn
Median Household Income: $72,629
Cost of Living: 1% above nat'l avg
College Attainment: 40.5%
Chicago, IL
Avg. Software Engineer Salary: $113k
Metro Population: 2,716,450
Major Industries: Aerospace,
Telecoms, Technology
Gross Metro Product: $178.2bn
Median Household Income: $69,908
Cost of Living: 7.8% above nat'l avg
College Attainment: 41.8%
Atlanta, GA
Avg. Software Engineer Salary: $90k
Metro Population: 5,802,100
Major Industries: Financial
Services, Technology, Telecoms
Gross Metro Product: $334.8bn
Median Household Income: $62,437
Cost of Living: 2% above nat'l avg
College Attainment: 37.7%
Miami, FL
Avg. Software Engineer Salary: $88k
Metro Population: 2,718,800
Major Industries: Financial
Services, Tourism, Trade, Media
Gross Metro Product: $134.3bn
Median Household Income: $45,214
Cost of Living: 13% above nat'l avg
College Attainment: 27.9%
Austin, TX
Avg. Software Engineer Salary: $118k
Metro Population: 2,063,500
Major Industries: Technology,
Pharma, Biotechnology
Gross Metro Product: $124.4bn
Median Household Income: $68,034
Cost of Living: 13% above nat'l avg
College Attainment: 42.8%
Tucson, AZ
Metro Population: 1,018,400
Major Industries: Technology,
Education
Gross Metro Product: $41.8bn
Median Household Income: $49,116
Cost of Living: 3% below nat'l avg
College Attainment: 31.9%
Los Angeles, CA
Avg. Software Engineer Salary: $129k
Metro Population: 10,140,200
Major Industries: Entertainment,
Aerospace, Tourism, Technology
Gross Metro Product: $721.6bn
Median Household Income: $61,931
Cost of Living: 26% above nat'l avg
College Attainment: 31.5%
San Diego, CA
Avg. Software Engineer
Salary: $108k
Metro Population: 3,320,600
Major Industries: Defense,
Tourism, Technology
Gross Metro Product: $232.4bn
Median Household Income: $70,141
Cost of Living: 28% above nat'l avg
College Attainment: 37.4%
Salt Lake City, UT
Avg. Software Engineer Salary: $91k
Metro Population: 1,135,649
Major Industries: Tourism,
Healthcare, Transportation
Gross Metro Product: $89.5bn
Median Household Income: $68,196
Cost of Living: 8% above nat'l avg
College Attainment: 32.7%
Portland, OR
Avg. Software Engineer Salary: $98k
Metro Population: 2,432,600
Major Industries: Real Estate
& Construction, Technology
Gross Metro Product: $157bn
Median Household Income: $66,971
Cost of Living: 10% above nat'l avg
College Attainment: 38.9%
Which other US metro areas are worth exploring?
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24 Forbes, Software Engineering Salary from Hired (https://hired.com/state-of-salaries-2018) & Glassdoor
MT
ND
WI
MI
OR
ID
WY
SD
IA
IL
IN
OH
PA
NY
VT
ME
CA
NV
UT
KS
NE
MO
KY
WV
AZ
NM
OK
AR
TN
NC
VA
TX
FL
LA
MS
AL
SC
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7
8
9
10
GA
WA
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12
MN
CO
Seattle, WA
Avg. Software Engineer Salary: $132K
Metro Population: 2,944,900
Major Industries: Clean Energy,
Aerospace & Defense
Gross Metro Product: $265bn
Median Household Income: $84,288
Cost of Living: 27% above nat'l avg
College Attainment: 46.2%
Denver, CO
Avg. Software Engineer Salary: $112k
Metro Population: 2,857,700
Major Industries: Aerospace,
Telecoms, Technology
Gross Metro Product: $183.6.2bn
Median Household Income: $73,250
Cost of Living: 10% above nat'l avg
College Attainment: 42.5%
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Which taxes are you liable for?
As soon as you land in the US you will be subject to taxation, and tax-
related questions will increasingly become a consideration in many of your
commercial decisions.
Corporation Tax
Corporation Tax is collected at Federal, State and
sometimes District level.
It is applied at graduate rates to the net profits (not
until you're profitable). In 2018 the Federal level of the US
corporation tax rate is a flat 21% due to the passage of
the "Tax Cuts and Jobs Act" on December 20, 2017.
Additional State tax varies from 0-12%.
Social Security & Medicare
These two separate taxes are often referred to as payroll
taxes and are typically deducted from payroll on an
ongoing basis. They are processed by a PEO or payroll
provider. Social security is currently charged as 12.4% on
an employee's salary up to a maximum cap of $128k25.
Medicare contributions account for an additional 1.45%26
tax on an employee's salary.
Federal
Corporation Tax
Social Security
Medicare
Unemployment Tax
State
Corporation Tax
Sales Tax
Franchise Tax
Unemployment Tax
Corporation Tax
District
Corporation Tax
Sales Tax
Sales Tax
Sales Tax is a pass-through tax similar to VAT in the UK
that a merchant must collect from customers.
Sales Tax is payable in all but 5 States and varies from
0% to 15%29.
Most businesses offering 'services' do not pay sales tax
but where tangible goods or software are involved you
should definitely factor the sales tax into your pricing.
You should check whether you are liable for Sales Tax in
each State.
Sales Tax on e-commerce
As of June 2018, the US Supreme Court decided that States
can require e-commerce companies to collect sales tax,
overturning a 1992 decision in Quill Corporation vs. North
Dakota which did not let States ask companies without a
physical location in the State to collect sales tax.
Franchise Tax
Franchise Tax is paid to the State and reflects the
privilege to operate in a given geography.
In addition, your State of incorporation will typically
expect franchise tax.
Franchise Tax varies significantly between States - e.g. in
Delaware it is linked to the total number of authorized
shares up to a cap of $180k, whereas in Alabama it is a
graduated tax of 0.175% on income over $2.5m up to a
cap of $15k.
Property Tax
A State level tax is paid on all tangible property and
some States also include a tax on intangible property.
This tax has increasingly shifted from being a State level
tax to a district or city level tax.
Unemployment Tax
An employer must contribute at State and Federal level for Unemployment Tax. In 2017 this was charged at 6% of an
employee's salary, but with 5.4% of this refundable if an employer paid unemployment tax at a State level.27
The maximum amount is capped at $450 per employee.28
Federal
Corporation Tax
Social Security
Medicare
Unemployment Tax
State
Corporation Tax
Sales Tax
Franchise Tax
Unemployment Tax
Property Tax
District
Corporation Tax
Sales Tax
25 https://www.ssa.gov/news/press/factsheets/HowAreSocialSecurity.htm
26 https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2018.html
27 https://taxmap.irs.gov/taxmap/pubs/p15-013.htm
28 https://www.nolo.com/legal-encyclopedia/collecting-unemployment-benefits-california-32504-2.html
29 https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/
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Specialists in the field
Given the specialist and technical nature of these topics, speaking to accountants and advisors
such as those below is strongly advised:
More resources
How do you build a high performing team?
For rapidly growing companies, hiring is a critical, resource-intensive
responsibility. Whether you are a company of founders looking to build your
team out, or a 400-strong entity seeking to hire specialty roles, your recruiting
process can make or break the livelihood of your company.
Know thyself
Recruitment demands that you know your own business
to the core. Your recruitment briefs should be blueprints
of your corporate DNA. Know yourself your values, your
mission, your objectives inside out and you'll know
exactly what to look for in your next hire.
By your actions
How you hire is almost as important as who you hire.
Every stage of the recruiting process communicates
something about your business to the outside world.
Building the right team is the goal, but how you go about
it speaks volumes as to who you are as a company.

Some golden rules
You never outgrow the use of both external and internal recruiters, no matter your size. You should be
clear of your reasons (explained below) of using one over the other.
Just as you evaluate recruiters, recruiters evaluate your company. They produce the best results for the
clients who provide an intriguing value proposition for the prospective employee. For example, when a Seed stage
company reaches out to a recruiter for an executive role, she may ask herself, "why can't this company attract
good talent at such an early stage?"
Developing great internal recruiting resources is crucial, at any stage. When working with external providers,
committing the time, money, and effort towards defining the position you want and how it fits strategically in
your company's plans is essential to getting good results.
" Make sure the company has the right advice and the team has support on state
tax; for example, each state has a different set of interpretations on whether
SaaS companies need to pay state tax" Tim Brown, Maxymizer
Eric Collins -
Frank Hirth
Don Dismuke -
Dixon Hughes Goodman
Understanding US Corporate
and Federal Tax
Understanding US Sales, franchise
and Property Tax
Products subject to Sales Tax
Sales Tax agencies in each US State
Bradley Smallberg -
Schissel Smallberg
Michael Hamilton -
KPMG
Alexander Wang -
Marks, Paneth & Shron
Corporation Tax by State
Payroll Tax by State
" Every interviewer will bring certain variables and biases, so there have to
be a core set of principles and values that the company believes that must
be brought into the interview process" Bec Sankauskas, Bexouce
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Matthew Foreman -
Foreman Tax Law
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When should you keep it internal?
The general rule of thumb seems to be: use internal recruiting as much as you possibly can, at every step of the
recruiting value chain.
Here's why:
Soliciting interviews and designing the recruiting
process: Internal recruiters understand your
company's people needs as well as its broader
strategic goals. They are committed to these goals
every work day, more than any external recruiter can
claim. As such, they are best positioned to design an
interview process that truly reflects your company's
values and strategy. Equally, they can best assess
whether the choice to interview or the language
used to describe advertised positions aligns with your
company's values.
Conducting the interviews and communicating
with candidates: Just as crucial is the task of
communicating your company's identity and value
to a prospective employee. As Shelly Duong from
Mochi HR Consulting said, "internal recruiters best
represent the company and the culture [to prospective
employees]." A candidate is interviewing your
company just as you are interviewing the candidate:
using your people, who can best communicate and
embody the company's ethos, can be key.
Negotiating with potential employees: There is value
in having a third-party objectively present to negotiate
an offer package. But this value rarely supersedes
that of a team member articulating why a candidate
should join your team. By removing one link in the
negotiation chain, it allows the candidate and the
negotiator to flexibly (and inexpensively) respond to
counters or adjust the offer package as necessary.

Why else might you choose to use internal capacity?
When internal capacity is not exhausted:
Rule of Thumb #1: The maximum capacity an internal recruiter can handle is about 10-15 active job descriptions
per recruiter (managing recruiting responsibilities full-time). Anything beyond this number typically becomes
unwieldy and should therefore be outsourced to external recruiting firms. Failing to do this might risk a drop off
in quality of recruiting.
When recruiting for non-senior roles:
For recruiting senior roles, the demands are such that the process might need to be confidential, technical or
demanding beyond the internal team's competency, or might require access to niche networks of executive
candidates. In such cases, relying on external search firms is likely a better course of action.
Given this point, prioritize using internal capacity to conduct searches for positions other than director or senior
executive roles.
In times of slow employee growth (short to medium-term):
Rule of Thumb #2: Use an internal capacity if you have conservative growth plans in the short to medium term.
If your company wishes to increase by greater than 50 employees in a 12 to 18-month period, you would need at
least one internal employee dedicated full-time to recruiting, perhaps more.
How should you utilize your internal recruiting team most effectively?
Ideally, everyone in your company should be involved in the recruiting effort in some way:
Recruiting the best talent is of direct strategic value
to any company, especially smaller growing companies.
Some teammates can participate directly, others
indirectly, such as by recommending candidates,
preparing recruiting material, or creating a welcoming
interviewing environment.
The founders/CEO should participate directly on the
recruiting effort. At least 10-20% of every founder's
time should be spent on recruiting.
Do not spend too much time burning internal
resources before moving to an external recruiter:
Limit the amount of time you give your team to
determine whether it can conduct a successful search
internally. Give your staff about 2-3 weeks to search
in the market, after which they should determine if
they'd need external help.
If internal capacity is limited, you can pursue a number
of hybrid internal-external arrangements:
Alternative 1: Pairing limited internal capacity
with the work of research firms that map the
market and find a list of candidates based on
your criteria. These can be valuable support for a
fraction of the price of a recruiter. Some foreign
research firms can cost as little as $20/hour.
Alternative 2: Employing a part-time recruiter
many can be hired via agencies can alleviate
the burden.
" If your employees aren't inviting their friends and personal networks to apply
for open positions, that might be a reflection of their generally negative feelings
about your company." Sebastyan Zaborowski, Semmle
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2
" No matter what your stage, about 80% of the roles in your company should
be filled by internal capacity doing something so key or strategic to your
company should not be done by someone that doesn't care about the outcome
as much as you would." Will Champagne, Ivy Scale
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When should you look for external recruiters?
Look to external search firms when recruiting roles of special quality, which fall outside of your internal capabilities.
Examples of special qualities might be a role that is senior, technical, difficult to identify candidates for, or that
requires a confidential search.
These aren't always senior roles. For example, Executive Assistant roles can result in an overwhelming amount of
resumes, so finding the right candidate might justify using an external recruiter over limited internal capacity.
Who should you choose as an external recruiter?
Choose the recruiter best connected to the type of person you want to recruit. Always ask: Who has the relationships
with people you would like to hire? Those people would pick up the phone when the recruiter calls them.
Specialist, region-specific, or industry-specific recruiters are most effective for targeted searches, as they understand
the market and the role you are sourcing for. Rely far less on generalist recruiters, most of whom are best at sourcing
"generalist" candidates.
3 types of recruiter engagement
Retainer: This involves a fixed fee, time-constrained
relationship, wherein the company pays the search
firm over three periods of time: at the start of the
engagement, after a few candidates have been
interviewed, and once a candidate signs an offer letter.
These are best for senior or executive-positions,
where there is no sparing expense or, in some cases,
little time to get the best candidate.
Contingency: Only one payment is made to the
search firm, on the date the candidate sourced by
the firm begins her role. These are best for filling
junior positions in a company.
Container: A hybrid between a retainer and a
contingency engagement. This involves just two
payment instalments: a deposit to initiate the
search and a payment once a candidate signs an
offer letter.
This form of engagement is best used with critical
mid to senior-level hiring needs that must be
completed urgently (in say, 6-8 weeks).

#protip: The best recruiters tend to gravitate towards working at retainer firms, so the choice of
type of firm might affect the quality of outcomes you get from your recruiter.
How do you choose the ideal firm for your search?
References: Seek references on recruiting firms from
partners, investors, and other companiesmaybe even
competitors! Don't rely on reviews alone.
Individual recruiters: Seek out and develop
relationships with individual recruiters within a firm,
instead of focusing on reviews of the firm alone.
Long-term understanding: Look for recruiters who
understand your company, team, and the role defined,
and with whom you can develop a long-term relationship.
In many cases, recruiting firms that you have worked with
in the past will be best at filling this role, but this may not
always be the case.
A full service, executive and non-executive recruiter firm
provides the potential for a longer-term relationship
across all roles. That said, some exec-only firms also have
close relationships with non-exec firms, so developing a
relationship with an exec-only firm does not foreclose the
possibility of easily connecting with non-exec recruiters.

"National" searches: Understand whether the recruiter
you paid for is actually taking the lead on a search in a
certain location/region, or whether they are outsourcing
the work to another vendor in your target location.
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2
3
" As great as hiring a ton of MBAs may sound, we have taken the approach
of hiring folks who know the local market really well. This is such a
valuable asset." Joel Frisch, Prodigy Finance
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Vertical specific recruiters
Executive search
East Coast
West Coast
Non-exec
Engineering
Sales
Human Resources
Industry specific recruiters
Healthcare
Enterprise
Diane McIntyre -
Calibre One (retained)
Simon Bromwell -
Robert Walters (contained)
Rick Bank -
True Ventures (retained)
Mark Lonergan -
Lonergan Partners (retained)
Jamie Sanger -
Daversa (retained)
Joe Griesedieck -
Korn Ferry International (retained)
Ben Christian -
Carbon Partners (retained)
Spencer Tashima -
Essential Solutions (retained)
Julia Horiuchi -
Robert Walters (contained)
Tony Zammikiel -
Equity Search Partners (contingency)
Chris Johnson -
Artisanal Talent (retained)
Dirk Cleveland -
Riviera Partners (retained)
Cathy Cairns -
Elite Technology Sales Recruiters (contingency)
Katie Pouch -
RJR Partners (retained / contingency)
Bill McHargue -
Talent House (contingency)
Cathy Cairns -
Elite Technology Sales Recruiters (contingency)
Katie Pouch -
RJR Partners (retained / contingency)
Bill McHargue -
Talent House (contingency)
Jennifer Carlo -
Betts Recruiting (contingency)
Robin Toft -
Toft Group (retained)
Mia Jung -
Oxeon Group (retained)
Sean Walker -
Bowdoin Group (retained)
Joel May -
BridgeGate (retained)
Douglas Madden -
Fortra Search (retained)
Sean Lucq -
SPMB (retained)
Greg Button -
Korn Ferry International (retained)
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A Benchmark for "good": conducting a foolproof interview process
Get the interview right and the right candidates will become the right employees. This page provides a basic
how-to guide for successfully setting up and executing an interview process for US candidates.
Building the interview process

Define your company's core values before your interview process. These will directly what interview
questions you ask and what kind of answers you seek.

Map the interview process and timeline of each step before beginning the process.

Your HR team should work alongside your relevant functional team to develop the interview process
for candidates.

Standardize processes, especially one for sharing feedback/evaluations amongst interviewers after
the interviewees.
Setting your team members' responsibilities in the interview process
First, determine who will be conducting interviews of candidates. Strongly recommended participants include:

Your employee to whom the candidate would be reporting (to test skills)

The HR rep who would be responsible for the person/team (to test culture)

A senior executive of the company (to test fit to company and strategy objectives)
Other participants could include an employee with whom the person would be working, and someone
influential to the culture of the team.
Then, consider how to indirectly engage other members of your company:

Encourage people to introduce themselves to interviewees when in the office

Seek out indirect feedback on interactions with candidates

Ask for help to cover interviewers' business-as-usual responsibilities during interview season.
Designing interview questions
Seek to evaluate three aspects of a candidate: Relevant skills, subject experience and cultural fit.
Standardize interview questions beforehand: Create standard sets of questions, aligned with the skills
sought. During the interview, an interviewer can then choose which questions within the set are applicable.
Align behavioral questions to your company values: These types of questions are most effective for
testing cultural fit, so align them to the values that define your company's culture.
Ask simpler questions to candidates, especially in US interviews: Interviewees tend to expatiate and
will be more revealing when simpler questions are asked.
Consider including a case study in the interview process: Americans are hardwired to sell themselves
well, so use a live case study as a means of truly testing skills and experience in action.
Diversity and inclusion
Consciousness in this area is now standard, but how it lives in your process will be determined by your company's
unique culture. Design a hiring process that accounts for diversity and inclusion in the following ways:
Encouraging diverse applications before the interview
Distribute job application to multiple channels, and, if possible, target channels accessible to diverse
applicants. If working with external recruiters: mandate they provide diverse candidates
Creating inclusive interviews with control for unconscious biases
Conduct a blind evaluation process of candidates' written material (e.g. remove names or gender/other
status identifications from interviewers' answers). Make no concessions on critical skills but be more flexible
with nice-to-have skills that can be taught or are not essential in the position. This may help account for
disparate access to previous skill development opportunities.
Commit your executive leadership to prioritize diversity and inclusion throughout the company. If these are
true priorities, these efforts will succeed.
Informal references
Put weight on informal references: informal references are better positioned to give unbiased views. US
applicants, perhaps better than others, likely select primed referees who have positive things to say about
them. Therefore, identify informal references through conversations with the candidates, LinkedIn
connections and connections from other social media platforms.
Extending an offer and negotiating with candidates
Consult with others directly involved in the interviewing process before extending an offer to someone (this
could set a new hire up for failure and/or fray team collaboration). Once done, set out a strict timeline for
making offers and responding to candidates.
Benchmarking against competing offers
Discourage benchmarking your offer to those from competitors or other companies (besides understanding
what the general market package tends to be for the position). Instead, focus your pitch to the candidate
on the opportunity to work with an amazing team building a meaningful product. American candidates are
significantly influenced by a sense of purpose and mission in their work. Broadly: ask "what would make this
person come here?" and provide, to the best of your ability, a pre-emptive answer to the candidate.
" US candidates interview well and are often very effusive and great at the larger
vision of the business. Pre-warn candidates you are going to drill into detail.
This is more insightful." Ed Boyes, US CEO, Hello Fresh
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" US folks are hard wired to sell themselves. At the final stage, get them to come in
and present a case study. People are always presenting themselves internally or
externally to various stakeholders and it's a great way to see if they have taken the
time to understand the business and come prepared. It really weeds out some
people who on paper, or after an initial chat, you thought were great."
Joel Frish, Prodigy Finance
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How do you hire for a remote role?
The life adjustments, unique work dynamics, and tactical outcomes typically
expected of a remote role require someone experienced at working remotely.
Prioritize candidates with a history of demonstrated success in remote roles.
Hiring process best practices for a remote office/position
Do more cultural interviews for a remote position than for an in-person position. The cultural connection is even more
essential remotely than in-person, where proximity helps foster collaboration and create accountability.
Replicate the work environment as much as possible in the interview process. Video calls and phone screenings evaluate
the candidate's communication style and ability to complete and convey work remotely. A good rule of thumb for
gauging effective phone and video screenings is the following: did you feel like you were sitting in the same room with
the candidate?
Structuring effective flex (or part-time) arrangements
It is important to note that not every position in your company would work as a flex or part-time arrangement.
The ideal flex or part-time position is
primarily a tactical role, without many strategic functions.
independent, in some cases project-based work distributed piecemeal across the team.
When flex roles take on strategic responsibilities, the work process could grind to a halt: "Let's table the
conversation until Jenny comes back and approves."
That said, there is significant value that flex roles can provide in encouraging diversity in your company:
providing flex opportunities allows a company to easily accommodate good employees with a diversity of life
experiences and identities.
providing a flex opportunity can create positive incentives for employees: e.g. a new mother provided the choice
of a flex role can self-determine, upon returning to work, when in the day she would be most productive.
Beware: The expectations of a flex role, if not handled correctly, can turn it into a de facto full-time role.
In one example, a two-day a week HR worker actually ended up working 35 - 45 hours a week because
the company consistently sent her assignments outside of work hours.
" Avoid hiring junior people as remote workers if they are inexperienced
workers, they might not know what this [type of work arrangement]
entails/requires" Bec Sankauskas, Bexouce
" Hire people with whom you can have a good rapport
over a call. If you can't be excited connecting with them
over the phone or a video call, you're probably not going
to call them and rely on email instead, which can make
the work process take forever."
Joseph Dierking, Bexouce
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What is your remuneration strategy?
There is intense hiring competition from American companies. The job market
is very liquid, driving up prices and lowering retention.
Remuneration considerations
The US job market is normally cited as setting salary levels above those for similar roles in different geographies.
However, it is hard to generalize as there are significant variances within the US depending on the city, role and level of
seniority. For example, the average salary for a developer in Palo Alto is $124k compared to $92k in Texas.
As you would at home, it is worth investing time to set out the principles around which remuneration will be governed.
Specifically addressing what level of salaries you wish to pay (i.e. 60th percentile), how and when options will be
granted, and whether or not there is a variable pay element will help you implement a consistent strategy.
The salary formula used by Buffer is a useful example of key salary considerations and the
weighting assigned between general factors - i.e. location, cost of living, "role value adjustment"
- and experience.
When using benchmarking tools such as salary databases, it's useful to compare your offered salary range to those of
the companies you are competing with for talent. This may involve more established businesses than your own.
A compensation philosophy that is fair, competitive, simple and rewards performance will set your company up for success.
Key questions
What state regulations and requirements apply to
your business?
Does your business have a consistent policy and
formula for how to determine salary levels?
What will be your Paid Time Off policy?
Are you aware of the legal implications of Holiday Debt?
Once you've set the strategic principles guiding your
company's compensation policy, it's worth getting
professional support to execute it. Mistakes are costly
and easily avoidable with proper counsel.
New joiners
In the US, the official process of hiring new employees includes filing the following documents:
Form I9, employee eligibility form.
Form W4, employee tax withholding calculation (requirements vary by State).
Specific State reporting requirements will involve information being provided to the Department of Health
and Human Services.
Under federal law, reports must be submitted to the appropriate State agency within 20 calendar days
of the date of hire, although some States may require shorter reporting windows.
Each year, Form W2, completed with any new employee SSN and identity details.
As this process is subject to change and updates, it is prudent to check with the IRS, city and State regulations. It is
worth noting that many payroll providers or PEOs will manage this process and advise on specific filing requirements.
Another important policy to note is Workers' Compensation Insurance. Employers pay for this insurance and
cannot require the employee to contribute to its cost. Workers' Compensation Insurance covers cash benefits
and/or medical care for workers who are injured or become ill as a direct result of their job.
Specialists in the field
Resources
Stuart Bagshaw -
BAB Leap
Greg Capitolo -
Attivo
David Ehrenburg -
Early Growth Financial Services
Free cost of living data
from Numbeo
IRS requirement for new employees
Tax withholding regulations
shown State by State
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How do you determine stock options
for your US employees?
Before making any local US hires, it is important to have fully thought through
proposed compensation packages, which may include stock options.
Retain advisers: Above all else, tax and legal advisers should be engaged early on to help you think this through
and to understand how to establish and maintain a stock option plan for your US employees.
Employee expectation: US employees who are working for a start-up (even a 'mature' one), will typically expect
some form of their compensation to be in equity (whether this is a direct issuance of shares or, more commonly,
stock options).
Keep it simple: However, given the ease with which US employees can leave employment and the
administrational burden of managing a large option plan at the outset, we would suggest that with your first US
hires, you only offer equity for your senior or key roles.
Use your existing incentivization framework: You should have an existing framework which sets out how you,
as a company, think about granting options to employees. There is no 'right' way to do this (and much has been
written and continues to be written on this topic). Once you have an objective calculation methodology, we
suggest that you use the same principles to build a US-focused option framework.
Have a separate option plan for your US employees: You will likely need a separate option plan for your US
employees and, while it should take account of your company's overall remuneration philosophy, it may also
include nuances for the local market (eg. what equity stake do other US country heads get offered in similar size/
stage companies; how are leavers treated; what does a vesting schedule look like). Inequalities may creep in from
location to location, and yet this flexibility is something you will need to be comfortable with in order to hire the
best talent.
409A Valuation: In the US, it is an absolute prerequisite for the company to have a 409A Valuation at the time of
each option grant. A 409A Valuation is simply a fair-market appraisal of the stock of your parent company. We
recommend you do this externally and pay the $2-$5k for the valuation. This will ensure that any challenges to it
from the IRS, require the IRS to do the leg-work to disprove the methodology applied by the external valuation firm.
Top tips:
a. Synchronize valuations (conducted in the US and the other jurisdictions) at the outset to avoid complicated
retrospective synchronizations of separate plans.
b. UK and US tax authorities, in particular, don't have a similar approach to assessing what the exercise price of
the options should be. You will need to understand how you can make pricing 'equal' are you going to have
different exercise prices in simultaneous grants of your options to your UK and US employees and if so, does this
impact the number of options you are willing to grant an employee?
c. Have excellent communication with your employees. Explain how the grant and exercise process works, what
happens if they leave and what happens if there is an exit. Be mindful that options are only truly valuable if
employees understand how they work.
How EMI Works in the UK
Under the EMI scheme, a company can "self-assess" to set up the plan and HMRC should be notified whenever
options are granted. There are annual limits for participants and a restriction on the total value of options in the
pool. The exercise price must be agreed with HMRC in advance to ensure that the tax breaks are achieved. The
exercise price for ordinary shares (typically the share class for options) can be at a discount to the share price for
preferred shares and this discount can be up to 70% or more. The valuation methodology and calculations are
normally sent to HMRC as part of a short one to two-page letter. HMRC valuations are typically refreshed after
a funding round or if company performance materially changes. HMRC valuations can only be agreed when new
options are to be issued HMRC will not do "speculative" exercises to try and gauge a likely price.
How "Stock Options" work in the US
There are two main categories for option plans in the US; ISO (Incentive Stock Options) and NSOs (Non-qualified
Stock Options). The ISO is the closest equivalent to the UK EMI scheme. The differences in both US structures are
laid out below:
" Europeans might be averse to giving options, while in the US, employees expect
a piece of the action and they know how to calculate the value of options. It's a
major factor for the people you are hiring in the USand if it's a not a major
factor, you might be hiring the wrong people here!" Ari Salonen, Midaxo
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6
ISO
NSO
Summary
Only for employees, more
favourable tax treatment if held /
exercised within specific
time frames
Available for anyone, no maximum
cap, less limits but less favourable
tax treatment
Recipient
Only employees, directors &
consultants
Anyone
Maximum exercisable value
per year
$100k
No maximum. Typically, the first
$100k is structured as a ISO then
the rest via NSO
Options must be granted
within [X] years of plan
adoption
10 years
no limit
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For reference, in 2017:

Capital gains tax was up to 23.8 per cent;
Long term capital gains was up to 15 per cent; and
Ordinary income tax rate was between 103y per cent.
For companies that already qualify for the UK EMI scheme, many will also qualify for treatment as an ISO in the
US. This is however worth checking with your US lawyers.
Where to go next
Specialists in the field
Setting up and maintaining an option plan typically involves input from lawyers, accountants and valuation experts.
ISO
NSO
Summary
Only for employees,
more favourable tax treatment
if held / exercised within specific
time frames
Available for anyone, no
maximum cap, less limits but
less favourable tax treatment
Incentive stock options
New tax law: here's what to know
Great Article on ISO and tax from
the Y Combinator forum
Very simple infographic
on 409a valuations
Difference between
ISO and NSO
Fred Wilson blog
on strike price
How Pinterest lets employees keep options
earned up to 7 years after leaving
Some great principles from Andy Rachleff
on the Wealthfront equity plan
The Wealthfront Equity
plan presentation
Guidance on equity to give advisors and
template engagement documents
Eric Collins -
Frank Hirth
Don Dismuke -
Dixon Hughes Goodman
Tony Hindley -
Valuation Solutions Ltd
Alexander Ardente -
Silicon Valley Bank
Greg Capitolo -
Attivo
Exercised within [Y] months
of termination
Three months
Unlimited
Taxation (grant)
No taxable event
No taxable event
Taxation (exercise)
The spread (difference between
strike price and fair market value)
is included in your calculation of
Alternative Minimum Tax (AMT)
if held for more than one year
Spread taxed on Ordinary tax level
Option sales
(qualifying disposition)
Proceeds attract Long-term
capital gains tax (if held more
than one year post exercise and
two years post grant
Proceeds attract long-term capital
gains tax (if held more than one
year post exercise and two years
post grant)
Option sales
(disqualifying disposition)
Proceeds attract Ordinary income
tax rate (if sold within one year of
exercise and two years of grant)
Proceeds attract Ordinary income
tax rate (if sold within one year of
exercise and two years of grant)
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What benefits do you offer your team?
Your company may offer a compelling set of benefits to attract and retain
talent in Europe, but the key elements of a benefits package can differ
significantly in the US.
Beyond the basic benefits any US company would provide, there are many and varied ways to attract and maintain
the best employees. The diplomacy of reward-giving is an art in itself and the benefits on offer can be imaginative as
well as practical.
After salary and bonus, a critical component of any offer to a candidate will be the type and level of health insurance
offered (often referred to as just "Healthcare"). Data suggests that this often ranks in the top five considerations for
employees looking at a job offer and often higher for a candidate with a family.
Minimum benefits packages
Benchmark benefits categories in the US (based on number of employees)
How does a company get a healthcare plan in the US?
There are two main ways to arrange healthcare in the
US. The Company can instruct an insurance broker who
will tailor the appropriate package through a specific
healthcare provider (i.e. Blue Shield) or the Company
can use a Professional Employer Organization (a PEO) to
offer a range of policies to the employees, often
delivered on an online platform.
When first setting your company up in the US, you can
opt for a temporary alternative to providing new health
coverage to your first employees by paying for their
COBRA coverage (continued healthcare coverage from
their last employer, paid for by the employee), if they
were eligible for it.
What are the key components of US healthcare?
When you are creating a healthcare scheme for your US full-time employees, your company will have to decide
on several key components, and your starting point should be understanding the basic terminology.
An individual enrolled in a health insurance plan or policy is known as a beneficiary or member. The person
who purchases the insurance is the subscriber and any other people on the policy (spouse or children) are
dependents. The insurance company charges the subscriber a monthly fee called the premium. When a
beneficiary receives health care services, the insurance company will pay the healthcare provider, clinic or
hospital on behalf of the beneficiary. However, the beneficiary is still required to pay for some of the cost he
or she incurs this is known as cost sharing. Common terminology related to cost sharing includes:
The deductible is a fixed-dollar annual amount of healthcare costs that the beneficiary must pay entirely
out of pocket. For example, if the deductible is $500, the first $500 in medical costs incurred each year is
paid by the beneficiary; for costs beyond $500 the insurance company may pay completely or require a
co-payment or co-insurance;
A co-payment (or "co-pay") is a fixed dollar amount that the beneficiary must pay for certain services. For
example, the policy might say that the beneficiary pays $15 out of pocket for each primary care visit and $25
for each specialist visit, while the insurance company pays the rest of the bill;
Co-insurance is similar to co-payment but it's a percentage of the bill rather than a fixed amount. For
example, the beneficiary might pay 20 percent of the cost of a primary care visit and 25 percent of the cost
of a specialist visit, and the insurance company will pay the remainder;
The out-of-pocket max is the total amount that the beneficiary must pay in a given year. This includes
what the beneficiary pays towards to the deductible, any co-pays, or co-insurance. After this amount has
been reached, the insurer pays 100 percent of the costs for all covered services.
2
3
4
5
Benefit
category
< 10 employees
11 - 50
50 - 200
> 200
Medical
Yes
Yes
Yes
Yes
Dental
Yes
Yes
Yes
Yes
Vision
Yes
Yes
Yes
Yes
Holidays
~ 20 days
~ 20 days
~ 20 days
~ 20 days
401K
No
Yes
Yes,
w/matching
Yes,
w/matching
Equity
Yes
Yes
Early and select
employees
Early and select
employees
Other perks
Context-
dependent
Context-
dependent
Context-
dependent
Context-
dependent
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How best to create a budget for US healthcare costs?
When it comes to forecasting healthcare costs, the simplest way to start is to budget a monthly contribution
of $600-$800 per employee for Healthcare, $50 per employee per month for Dental, and $15 per employee per
month for Vision. Sequoia's research shows that over 95 percent of companies offer Vision and Dental care
to employees if they offer a healthcare plan. The table below sets out the range of employer contributions for
employee health insurance by size of company and also distinguishing between employees and dependents.
For employees:
For dependents:


Key questions about healthcare
What is the right level of coverage to offer to your
team and their dependents?
Do you want to include dental and vision plans as part
of the package?
What are the total employer contributions likely to be,
given the forecasted team size?
How much control should the company have on policy
selection as an employer or are the policies provided
by the PEOs sufficient?
When assigning European employees to the US for a
secondment, what level of healthcare insurance will
enable you to replicate the same experience they have
in Europe?
The value of PEOs
Professional Employment Organizations, known in the
US as "PEOs", enable businesses to purchase healthcare
for their employees quickly and easily. They also offer a
Company a range of other useful services such as
payroll and payroll tax administration, compliance with
Federal and State employee filings, Workers'
Compensation, and the provision of various other
additional benefits such as Employee Handbooks,
pension plans, and supplementary healthcare, including
dental and vision insurance. The process of setting a
healthcare scheme can take up to four weeks, from the
point of the first call.


100%
covered
95%
covered
90%
covered
85%
covered
80%
covered
Other
Average
<50
employees
45%
18%
27%
9%
0%
0%
95%
50-99
employees
59%
6%
29%
0%
6%
0%
96%
100-499
employees
65%
4%
22%
9%
0%
0%
96%
500-999
employees
54%
15%
23%
8%
0%
0%
96%
1000+
employees
100%
0%
0%
0%
0%
0%
100%
100%
covered
90%
covered
80%
covered
70%
covered
60%
covered
50%
covered
0%
covered Other
Average
<50
employees
0%
0%
30%
0%
10%
20%
20%
20%
57%
50-99
employees
6%
6%
12%
18%
12%
24%
0%
24%
69%
100-499
employees
17%
13%
4%
30%
0%
17%
0%
17%
76%
500-999
employees
8%
8%
8%
39%
8%
0%
0%
31%
76%
1000+
employees
25%
0%
0%
25%
25%
0%
0%
25%
76%
TechTech
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Commercial
Minimum
team size
Cost per
employee
per month
401(k) notes
Set up fee
States
Other
5
$175-200
Multiple offerings
6% first
month's
payroll
all
70 offices, listed
company, good
basic HR advice
1
$39-$99, Max $8k
Provider is
Slavic 401k
0
all
Tech first, strong UX,
OneMedical integration,
Health Advocate
1
$107 per
employee per
head, minimum
$2k per month
Multiple offerings
$2,750
all
OneMedical integration,
comprehensive perks
and benefits program
1
$140 minimum
Multiple offerings
Variable
all
Good HR advice and
guidance, various health
coverage programs
1
$39 + $6
minimum
401k through a
broker Guideline
0
Payroll in all
states; medical
benefits in
22 states
3 month free trial;
Free migration service
for companies with
10+ W2 employees
20+
$10-30
Can work with
any 401k provider;
Vestwell is
preferred partner
Circa 20% of
annual fee
all
Namely focuses on
serving mid-sized+
companies
1
$40 + $5
minimum
401k through a
partner network
Variable
all
Integrates with
popular business
apps, i.e. expensify
Product
Provider
Payroll
Healthcare
401 (K)
Integrations
PEO
Insperity
Y
Y
Y
1 month
PEO
JustWorks
Y
Y
Y
<1 month
PEO
Sequoia One
Y
Y
Y
1-2 months
PEO
TriNet
Y
Y
Y
1-2 months
Bundled
Gusto
Y
Y
Y
<1 month
Bundled
Namely
Y
Y
Y
1-2 months
Bundled
Zenefits
Y
Y
Y
3-6 weeks
The value of PEOs
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Key questions about PEOs
How do the PEO's fees scale as your US team grows?
What other fees may you incur?
Can your employees update their information on their
own, electronically?
Is the PEO licensed in the State(s) where your
employees will be? If you plan to have remote
employees, make sure these locations are covered.
What is the minimum number of employees in your
team the PEO will service?
What happens if you wish to change vendor or wish to
change vendor for a subset of the service (e.g. pension
plans / 401(k))?
Where does the liability lie for non-compliance?
Understand how liability is split between the PEO and
your company.
Other benefits
Holidays / Paid Time Off (PTO)
In the US, the standard for young companies is two to
three weeks of vacation, not including about 10 public
holidays per year. Some companies opt to provide
flexible holiday policies and some provide suggested
total holiday days (typically ~20 days).
Key Questions about Paid Time Off (PTO)
What state regulations and requirements apply to
your business?
How do you plan to monitor PTO being recorded?
Are you aware of the legal implications of Holiday Debt?
What plans have you made for maternity/paternity
cover?
Retirement 401(k)
A 401(k) is a program that allows employees to contribute pre-tax dollars into a retirement savings fund that
also grows tax-free. It is not typically provided for small and relatively young companies with limited funding. Once
the company is established and well-funded, employees begin to expect the employer to provide a 401(k)plan, as
such a program can be set up at minimal cost to the company.
However, even if a young company has set up a 401(k), it usually does not provide the option of matching
contributions to the fund made by the employees until it is secure in its funding.
Other optional benefits and perks
It's important for your employees to draw a clear
distinction between benefits and perks.
Phone and internet costs covered; meals; transportation
costs; gym membership and remote or flexible working
arrangement are commonly perceived as perks "nice-
to-have" but not essential or mandated by regulation.
That said, pay attention to perks that are standard in a
particular local context: for example, free meals
provided by companies in Silicon Valley. Providing these
might be important to your competitiveness in the eyes
of candidates in these contexts.
Key questions about perks
How well does your standalone benefits package
communicate your company culture?
Are there additional benefits which can deal with
specific challenges your business may have?
Should you standardize benefits for employees across your offices?
It's best to provide one standard set of benefits for employees across all global and local offices. Exceptions can
be made for special positions (e.g. sales people getting car allowances or transportation reimbursements).
That said, benefits packages will necessarily differ in situations where social services provided in one country differ
significantly from those in another. This is especially the case with medical/dental/vision coverage (e.g. public health
insurance in the UK vs. the US) and retirement savings.
In the US, the level of benefits, HR compliance rules, taxes, and payroll requirements can vary depending on the state.
Therefore, before determining the package for employees in your US office, evaluate what would make for a
competitive package in the specific market.
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How do you determine what level of benefits to provide in each category?
Consult an HR consultant with knowledge of benefits in the local context. A part-time HR consultant
in the US can recommend location-specific benefits packages.
Getting help from relevant consultants
Word-of-mouth recommendations on a relevant consultant work well. Get these from your
locally-based country manager, HR groups/Listserv, and others.
Consult an accountant (in-house or external) for relevant tax and regulatory considerations
Seek out up-to-date salary and benefits information from local recruiters and search firms.
How are you managing your culture?
Keeping the team as one across Europe and the US requires considered behaviors
and processes: CEOs found the outcomes are well worth the investment.
Building up and supporting a high functioning team is
hard, even when people are working in the same space
and come from similar cultures. When they are located
thousands of miles away and have different ways of
working, miscommunications can ensue, and cooperation
and engagement can deteriorate.
People rely on body language, and on all the other signals
and conversations that happen in between meetings
(what you see and hear being together in the office) to
validate the meaning of messages they receive. Without
those confirmations, trust and cooperation can erode.
Clear processes and norms, a strong corporate culture,
and opportunities for real time collaboration increase
collegiality, build trust, and help avoid the rise of "us vs.
them" perceptions.
To overcome the challenges
of distance, Big Health
encouraged all processes and
decisions to be clearly
documented, and put in place
a variety of initiatives:
In person summits every 6 months; quarter
summits otherwise
Two-day hackathons and fun days
Weekly global team meetings, including a rotating
spotlight on one team
Bi-weekly "office hours," open time to ask the
CEO questions.
" Keeping the culture of the team as one across the US and UK blindsided
me; we spent a lot of time on the mechanics of being apart."
Peter Hames, Big Health
" If you have to develop core values, source them from the people in the
organization, not just the CEO or the senior leadership. If nobody knows
these values, nobody lives these values." Colleen McGarity, Apto
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Use technology
Generally, invest heavily in communications technology. How effectively the team connects with others can
single-handedly make or break a new office.
Be aware of what you want out of a communication/collaboration tool and use it for its discrete function only.
Choose software that aligns well with your use case and culture.
The basics
Use live, collaborative tools wherever possible
Make sure work processes, individual and collective,
are visible and available to all necessary stakeholders
Address tactical, task-heavy communication through
collaborative software. Save check-in meetings,
one-on-ones, project reviews and other meetings for
addressing broader, strategic issues.
Time zone differences can be your advantage
Staggering work done by teams split across time zones
allows you to minimize dead times and maximize
collaborative efficiency. Employees shouldn't feel obliged
to work after-hours just because another time zone is
doing so. This should be part of your company's culture.
Develop an anchor leader within the
remote office
Whether you choose one or not, a leader will emerge. So,
it is prudent that the company choose, or risk the wrong
person taking the role.
The anchor leader need not be a project manager, a
formal lead, or even a more-experienced hire. This person
must just be able to execute tasks effectively and
challenge others to do the same.
Commit executive leadership's time and
efforts to the remote office
Commitment involves a mix of physical visits, prioritization
in the executives' schedules, and continued opportunities
for the remote office to influence executive and company
priorities.
Create social opportunities
Transferable social activities develop a singular team
identity and foster the remote office's sense of belonging.
Also, companies can use technology to bridge the physical
gap socially. Some companies have installed a virtual
"water cooler" camera (on Zoom) in each office that allows
employees to have organic, remote conversations. The
general principle is that you should create virtual spaces for
employees to congregate and chat without an agenda.
" You have to hire a good country leader because the leader makes all the
difference. That leader will know how to hire, when to communicate, when to
travel to visit employees, how to engage employees. In other words, that leader
will know what they are supposed to do." Shelly Duong, Mochi HR Consulting
" A remote team MUST have executive buy-in and participation or it cannot
be a success." Joseph, Bexouce
Resource:
Global teams that work
* For a company moving to Silicon Valley, adopting the G-suite could be seen as best practice, since so many other companies and partners there
use this software.
Category
Software
Social communication
tools
Project management/
cross-team collaboration
Marketing/external
communication
Applicant tracking
system
CRM software
All-in-all solutions
(video)
(chat + video)
(video)
(video)
Business*
(whiteboarding)
(subscription
businesses)
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US Investors are increasingly investing in European companies
Nonetheless, US VC activity in Europe is increasing. In 2016, 12.8% of all VC deals involved a US investor, and this
increased to 17.3% in 2017. The amount invested into UK companies by West Coast investors surpassed 1 billion in
2017 for the first time, increasing 252% since 2011. East Coast investors also strongly invested in UK companies,
contributing 1.3 billion in 2017 .
Below are those funds who have actively invested in European startups in the last 3 years (without having a local
office there).
How do you successfully fundraise
in the US?
Do you need a US Investor? If capital is what you are after, don't be fooled into
thinking that there's only capital in the US or that only US investors are able to
scale a company to unicorn status and a healthy exit. Both sides of the pond
have plenty to offer, so keep an open mind.
Various European companies have become successful while having only a European investor base
Fund
European startups backed
in last 3 years
Rounds in which these funds
participated
Benchmark Capital
ResearchGate (Nov 2015)
Series D - $53m
Citymapper (Jan 2016)
Series B - $40m
Zenly (Sept 2016)
Series B - $22.5m
Contentful (Dec 2017)
Series B - $13m (and Series C - $28m)
Bessemer Venture
Partners
NewVoiceMedia (Jan 2016)
Series F - $30m
ZenMate (Jan 2016)
Series A+
Hibob (Jan 2017)
Series A - $17.6m
Wandera (May 2017)
Series C - $27m
Crowdjustice (May 2017)
Seed - $2m
Zopa (June 2017)
Series F+ - 32m
Kandou Bus (June 2018)
Series B - $15m
Codex (June 2018)
Series A - $5.7m
General Catalyst
Deliveroo (Aug 2016; Nov 2017)
Series E - 210m Series F - 371m
Brainly (Oct 2017)
Series B - $14m
Shift Technology (Oct 2017)
Series B - $28m
Contentful (Dec 2017)
Series C - $28m
RosieReality (Dec 2017)
Seed - $700k
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Kleiner Perkins Caufield
and Byers
GoEuro (Oct 2016)
Series C - $70m
Relayr (Feb 2018)
Series C - 30m
UiPath (March 2018)
Series B - $153m
Bump (April 2018)
Seed - undisclosed
Prisma (May 2018)
Seed - $4.5m
Spotahome (June 2018)
Series B - $40m
New Enterprise Associates
CCP (Nov 2015)
Growth - $30m
Global Savings Group (Dec 2015)
Series B - 10m
GoEuro (Oct 2016)
Series C - $70m
WayRay (March 2017)
Series B - $18m
Peanut (Nov 2017)
Seed
Fire1 (Jan 2018)
Series C - 40m
Konux (April 2018)
Series A - $7.5m
NordSense (June 2018)
Seed - $2.2m
Sequoia Capital
Cambridge Epigenetix (March 2016)
Series B - 14m
WayRay (March 2017)
Series B - $18m
Graphcore (Nov 2017)
Series C - $50m
Mapillary (March 2018)
Series B - $15m
JollyChic (May 2018)
Series C
PatSnap (June 2018)
Series D - $38m
Fund
European startups backed
in last 3 years
Rounds in which these funds
participated
Fund
European startups backed
in last 3 years
Rounds in which these funds
participated
Greycroft
Farfetch (March 2015)
Series E - $86m
Blinkist (Jan 2017)
Series B
Wonderbly (July 2017)
Series B - $8.5m
Deposit Solutions (Nov 2017)
Series A+ - 15m
Peanut (Nov 2017)
Seed
Azimo (May 2018)
Series C - $20m
Blinkist (June 2018)
Series C - $18.8m
Insight Venture Partners
Hellofresh (Feb 2015)
Series E - $128m
Chrono24 (July 2015)
Series A - $23m
Zenly (Sep 2016)
Series B - $22.5m
SonarSource (Nov 2016)
Growth - $45m
Darktrace (July 2017)
Series D - $75m
Receipt Bank (July 2017)
Series B - $50m
HomeToGo (Oct 2017)
Series B - $20m (and Series C)
Duco (Jan 2018)
Series C - $28m
Showpad (Jan 2018)
Series C - $25m
Templafy (Feb 2018)
Series B - $17m
Detectify (March 2018)
Series A+ 5m
AMCS Group (April 2018)
Growth
Blinkist (June 2018)
Series C - $18.8m
Tractable (June 2018)
Series B - $25m
YOOBIC (June 2018)
Series B - 21m
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Fund
European startups backed
in last 3 years
Rounds in which these funds
participated
Spark Capital
eToro (April 2015)
Follow on Growth - $39m
GetYourGuide (Nov 2017)
Series D - $75m
Badi (Feb 2018)
Series A - $10m
Tourlane (March 2018)
Series A - $9m
TravelPerk (April 2018)
Series B - $21m
Careship (April 2018)
Series A - 6m
Union Square Ventures
La Ruche Qui Dit Oui (June 2015)
Series B - $9m
Simscale (Dec 2015)
Series A
Auxmoney (Feb 2016)
Series D - 10m
Clue (Nov 2016)
Series B - $20m
Jobbatical (Sept 2017)
Series A - $3m
Valar Ventures
N26 (April 2015)
Series A - $10m
Kreditech (March 2016)
Series C - $103m
Brolly (July 2017)
Seed - 1m
Coya (August 2017)
Seed - $10m
Deposit Solutions (Nov 2017)
Series A+ - 15m
What are important considerations in fundraising from US investors?
The US VC perspective
With thanks to Bessemer, Insight, Bain Capital and others for their insights.
Do you have a good reason to be raising funds from US-based investors?
If you are a Seed or Series A company and you are not based in the US, it's unlikely (though not unheard of)
that your seed or A round will be led by a US investor. Geographical nexus is important for early stage deals.
Since there is significant capital in Europe, looking for a US institutional investor to lead this early-stage round
may raise a red flag without a good explanation as to why local investors are not committed to the deal.
If you are a company with at least $3m ARR and on a strong growth trajectory, US investors will be happy to
look more closely at you. Pure growth equity investors are more likely to get excited at closer to $10m ARR.
Silicon Valley A rounds look like European B rounds. You may think this will mean you'll get a higher valuation
than in Europe, but the US investors may be looking at a European investment as a chance to get better
pricing. Higher valuations are also a product of larger market opportunity and in early stages, it is not a given
that your product or positioning will be a fit to the US. Make sure you search out European growth funds as well.
Do your homework and create a shortlist
Given the sheer volume of VC funds operating in the US, it's more important than ever that you have
identified sensible, value-add partners who fit your business stage and plans for the future.
Understanding and thinking through how your proposed fundraise aligns with your intended investor's fund
profile, required return, and exit requirements is the first part of this process. A $300m exit to a founder
may sound exciting (and make them rich) but for a $5bn fund that has invested this just won't make
sense. This doesn't just mean looking at the investor's website. Funds' strategies often change, so you will
still want to glean information from folks close to them.
Reference these funds within your network, including your current investors. It's always good to know what
value the investor brings to the table, as well as any egregious terms they may try to get included in the deal.
Think about relationship building early, but not too early
You can lose the interest of a VC very quickly, so make sure you are introduced when the timing is right. If
you are growing very rapidly and about 6 months out from fundraising, this is probably the most efficient
time to connect.
Similarly, coming onto their radar very late may leave a poor impression. While there may be a hot race to
fund you, VCs far prefer being able to spend at least a week making their decision and feeling rushed or
pressured can end up in you having less offers on the table or missing out on the right partner.
Start with your "tier 2" VCs
Do your first pitches and meetings with VCs you are less attached to. If you start with your perfect partner,
the likelihood is it won't be your best pitch and you'll miss the chance to make a strong impression.
Simplify your cap table and board structure
Growth funds do not want to deal with a long-tail, messy cap table with multiple angels, or a large,
unwieldy board.
If you haven't done this before the round, quickly identify how to clean up the cap table as part of the
round and include this in your pitch appendix.
Don't be too candid in your pitch
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European founders can often sell themselves short. Americans are (generally) hustlers and salesmen by
culture. They have grown up as part of a very large market and feel comfortable explaining how they will
easily become a billion-dollar company.
European founders, by contrast, can deliver their pitches far too honestly and self-critically. Suggested market
sizes may end up being the sort that the investor would expect to come up with themselves after some diligence
and the approach from start to finish can often be far too conservative. Make sure the vision is big and visionary.
You've got to get that second meeting; don't give a VC an easy excuse not to take it.
Demonstrate that you are a dynamic and inspirational leader
VCs are looking to you to scale a successful team.
The biggest challenge the CEO will often have ahead of her is building and retaining a successful, high
performance team able to execute strongly against the business plan.
The investor wants to feel inspired by you, and to gain an insight into what your future employees are going
to see and they will be analyzing this throughout your pitch.
If an investor doesn't think you appear coachable, or if you miss out small talk and are straight down to
business, they may not want to back you. You'll hear time and again that the average VC-founder
relationship lasts longer than the average marriage, so they must be able to foresee a strong working
relationship blossoming.
Let everyone in the room talk
If you bring your CTO, CMO or any other team member, make sure they speak, particularly when there are
questions relevant to their area of expertise. If someone attends the meeting and doesn't speak, this can
appear odd and be a red flag.
Don't forget a VC will be looking at how you communicate between yourselves, and they do not expect the
CEO to be the only responder. Team chemistry, especially at the senior leadership level, is scrutinized closely.
Metrics, metrics, metrics
There should be one solid slide of key metrics in your deck and you should be able to talk to these very easily.
At growth stage in particular, the data is incredibly important. Have it at your fingertips and have it be
more than topline revenue growth.
Give a clear, rational explanation for the size of your fundraise
Don't double the size of the round simply because you are in the US. Yes, there is more capital available across
the Atlantic and a number of deep-pocketed funds, but they won't write a bigger check just because you say
$20m when you need $10m.
Articulate very clearly what the funds will go towards and what effect you expect this to have on the key
metrics of the business.
Know your competition
No VC wants to feel like they know the competition better than you do.
This goes for direct and indirect companies, younger and more mature companies and all that is in between.
You should know the competition inside out: you've used their product, may know some of their key team
members, have spoken to their customers and generally, have done your homework.
Explain why you're different and how you think you can protect that difference.
Don't miss out anyone obvious or be dismissive of any competitors. It is far better to discuss it head on.
Don't forget, competition is often good validation, so don't be afraid of discussing it openly.
Guidance on baseline metrics
What are some of the metrics that you should meet before a US investor will take
a closer look? As always, there will be outliers and edge cases that do not meet
any of these requirements who have been funded. Those are the exceptions, not
the rule.
Software



Marketplaces



Category
Good
Best
ARR
$5-12m
$13-20m
MRR growth
100%
++
Repaying customer acquisition
cost timeline
18-24 months
8-17 months
Gross retention
85%+
90%+
Gross margin
70%+
85%+
Net churn
100%+
140%+
Category
Good
TAM core vertical
$5bn+
GMV organic growth MoM
10%+
6-month retention (both sides)
10%+
Payback timeline for cost of
acquiring both sides
24 months or less
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What are important considerations in fundraising from US investors?
The founders' perspective
With thanks to Hello Fresh, WeFarm, Behaviosec and others for their insights.
Hot intros are better than warm ones
It will be much harder to get in front of a VC in the US than in Europe. A relationship you thought was warm 6
months ago may now be dead and your emails will go unanswered.
Intros are most successful from other VCs or CEOs, but these need to be very trusted, long-time, close allies and
friends of the VC you are approaching.
Your investor(s) should really come into their own during this process. Hopefully, they have some US funds who
they have done other successful deals with. For example, Insight Venture Partners had successfully invested in
Delivery Hero prior to partnering with Rocket Internet again with Hello Fresh.
By talking regularly with investors when you aren't fundraising, you can outline in one meeting how you see the
market and your strategy, and at the next meeting you should be able to demonstrate how you executed against
that strategy. These informal catch-ups can lead to invitations to pitch and even requests to do a deal which is not
taken to the wider market (a real win when you think of the time and effort that goes into fundraising).
Prepare for a quick decision and a quick process
A yes or no is reached and delivered extremely quickly.
Often, diligence is being conducted in the background, so expect to be soft referenced.
On one extreme, a company had its first meeting with a US VC, had a verbal yes two days later, then an
in-person diligence and term sheet negotiation two days after that. From the first meeting to signing a term
sheet took no longer than a week.
After the term sheet, everything was sent across to the lawyers, and the investment team didn't come back
on the scene until they were about to sign the deal.
Terms may be different than you expect
A US investor may look at your financial plan, agree with its fundamentals, but significantly increase your
numbers, suggesting you raise a far bigger round than you originally set out to raise.
They may propose harsher terms but with a focus on the long-term value your partnership will create.
Conversations feel different
From investors to executives to customers, conversations have a different feel to those in Europe. The US can feel
more strategic and "blue sky" compared to the more pragmatic and granular European culture.
Nevertheless, certain US investors are extremely hands-on. They typically come from an operating background
and like to be involved with every decision made by the business, from hiring to press releases. Look out for this
when diligencing the background of your future board director and try to set the parameters of their ongoing
engagement from the outset so you don't feel suffocated.
Diligence centers around customer and co-investor reference calls
US investors already know whether they like the market you are operating in or not. They want to understand
what your existing and prospective customers make of the team and the product offering. References are
taken from other team members, employers and existing investors. US VCs can accomplish this quickly due
to extensive and willing networks. The result is a quicker diligence process.
2
Consumer


Fintech


Category
Good
Best
LTV
$50
$200+ (repeat spending)
Market size
$5bn
$100bn+ (growing market)
Revenue growth
100%+
300%+ (organic growth)
Category
Good
Fundamental question
Growth and user acquisition -
how can you scale this business?
User growth
10-15% MoM
ARR
$5m+ by time of investment
Upsell/cross-sell
10-20% expansion
Payback of cost of acquiring
customer
24 months or less
Churn
Less than 20%
CAC
Show that organic growth
is very strong
Category
Good
Product
Better; faster; cheaper; more fun
Revenue
At least $5m annual
Minimal awareness
Less than 0.1% penetration
Customer base
Diverse demographically and
geographically
Gross margin
70%+
Net churn
100%+
4. Then Do
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1 3
Data is a focus at Series B+ rounds but before that, while European VCs appear to care far more about slicing
and dicing the data at every stage, a US VC cares more about your vision and the strategy which will make
that vision a reality.
If you are lucky enough to be a successful entrepreneur who has built and sold a business previously, the
diligence is likely to be based on the key founding team members. This will be a test of chemistry (on both
sides) and developing a trust-based relationship. The investor will be making a bet on you but will seek to
understand if you know what you want to achieve and how you are planning to get there.
Get them bought into your mission and your vision - and make sure that it's a big and bold one
US investors are more excited by the big vision that is presented to them. European investors tend to be more
skeptical and cynical.
It's vital to get the US investors bought into your mission early in the pitch process. You can often determine
how the meeting is going to go within the first 15 minutes.
You don't necessarily need to be expanding to the US
It is not a prerequisite to be expanding to the US or to have existing customers and traction there in order
to get funding from a US investor.
However, founders and investors alike make the same point: know why you think this investor is a good fit
for you, wherever they are based, and be able to explain this with conviction.
If they have a history of successfully investing in consumer businesses coming to the US from Europe, that's
a pretty good reason for a consumer startup following the same pattern to look closely at them.
If you do have traction in the US but don't yet have a senior presence out there, don't be surprised if a US
investor expects a senior team member to permanently move to the US. They may also insist that the
company they invest into is a US entity. This will make for extra fun in the fundraise (watch those legal fees
and use lawyers who have done this many times before) but, if you ultimately think 60%+ of your revenue
will be from the US, it can be a sensible move.
Top tip - get an early agreement on the exchange rate
If you are getting an investment in dollars but issuing your shares with a GBP or EUR share price, don't forget
to get the agreed exchange rate locked in early on, and preferably in the term sheet. This may work for or
against you when it comes to funding, but at least everyone knows what has been agreed and the number
of shares being issued and at what agreed share price.
Expect other offers to come in if a Silicon Valley fund issues a term sheet
It is likely that you'll have received various rejections and reasons why you were not getting funding.
As soon as you receive a term sheet from a US investor, expect to be the hottest ticket in town, and don't be
surprised if investors who turned you down originally, come back to ask to be a part of the round. It's simply
the herd mentality in play.
Be more bullish
Immediate addressable markets are, on the whole, smaller in Europe than in the USA, and it can therefore appear
harder to build a very large business in Europe alone. The level of sophistication and quality of execution in Europe
can, however, often be much higher because it simply has to be in order to build a successful European business.
In the US, you have the good fortune of simply having a really big market in front of you which can lead to
apparent success. European founders should have more confidence when thinking about tackling the US market
and remember that their ingrained discipline may well be the first stepping stone to success.
" In the US, if you cannot pitch a vision / purpose / huge
problem, then people won't listen. Investors care
about what you are trying to solve; the product is
the consequence of that problem".
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Wrapping Up
"Could the land of the free cost you the Earth?"
Where to go next
About Octopus Ventures

" Could the land of the free
cost you the Earth?"
The US will demand all your tenacity, focus and hustle. If you're ready to take
the challenge head on, the rewards can be tremendous.
Is your company ready to manage the complexity of a multinational operation? While the US' large market holds
great promise for scale, even the most successful CEOs had to contend with many unexpected challenges.
A US entry is expensive and not always strategic. If the business is not yet successful and resilient in the home
market, the expansion adds strain to a vulnerable position. There's consensus that CEO and/or founder DNA is a
necessary (though not sufficient) condition to effective US entry, and splitting attention between the two continents
can diminish the probability of high success in both markets.
Every CEO interviewed spoke of the difficulties of maintaining culture across continents, of underestimating the
impact of miscommunication and of the toll of constant travel on focus and energy.
Additionally, US revenues can take longer to ramp up and costs are substantially higher than European markets, up to
the point where they can undermine the viability of a company's business plan.
Extensive pre-marketing, market assessment and network building all activities that can de-risk the US entry are
almost always overlooked. It is important to distinguish between being operational in the US and having people on the
ground here. US entry requires dedicated focus from a company executive, and hiring strong local talent can be difficult.
How will you address these common challenges?
Asking questions doesn't mean dampening your ambitions; instead, it signals deliberate action with
measured risks. The opportunity is massive if you're prepared for it. What other questions will you ask?
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Where to go next
Are you a US-based executive of a European VC-backed business? Join a group of CEOs
and senior executives who are willing to share their insights and experience to help the
next generation of European companies make it in America.
About Octopus Ventures
We are a team that backs entrepreneurs. We like to be in early and follow through
from one defining moment to the next. We aim to be helpful and straightforward
and we value boldness - qualities we seek in our entrepreneurs and partners. Our
average investment is 4.5m and in recent years it has ranged from 350k to 25m.
We support, we don't micro-manage. We're able to expose entrepreneurs to the
people, the organizations and the networks which will illuminate their ambition and
broaden their horizon. Direct access to powerful resources of influence and hard-won
know-how have fueled each of our portfolio's successes.
We are part of Octopus Group, managing over 7 billion on behalf of more than
50,000 investors, spanning investments, healthcare, energy and property.
We are one of Europe's largest Venture Capital teams.
Head-quartered in London and New York, with Venture Partners in San Francisco,
Singapore and China, we help entrepreneurs scale globally.
Octopus Ventures US Team
European founders USA application
Octopus Ventures website
The opinions shared in this document are provided for information purposes only, are subject to
change, and should not be seen as advice or any recommendation. Octopus does not offer investment,
legal or tax advice, and we always recommend that our investors and entrepreneurs seek professional
advice before making any related decisions. Issued by Octopus Investments Limited, which is
authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London
EC1N 2HT. Registered in England and Wales No. 03942880. Issued: October 2018.
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6. Toolkit
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Toolkit
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Guiding questions
First ask the fundamental
questions
Should you expand abroad?
What is the potential in the home market?
What are the limitations in the home market?
Do customers demand global services?
Should you enter the US?
Do you have inbound leads from the US?
Do you have a deep understanding of product-
market fit in the US?
Will investment in the US hurt the domestic
business?
What does the competitive landscape look like?
Is the timing right?
Is the US your primary market?
Are you focused on a market where the US is
substantially larger than Europe?
Have you saturated your home market?
Is the team at home strong enough to grow the
business in the absence of a founder?
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What milestones and timeliness must
you meet?
Which measured tests can you deploy from your
home market?
Are pricing assumptions still valid in the US?
What market share targets are realistic?
What are the industry dynamics in the US?
What does the value chain in the US look like?
Do US players control any resources that are crucial
to your expansion?
Who is your competition?
What are your key differentiators?
What moats can you build around your offer?
How do you know you have product-
market fit?
Do you have product-market fit at home?
Do you have significant inbound requests from
US customers?
What is your US ideal customer profile?
What specific business pain are you trying to solve
for your ideal customer?
What results would they like to achieve, on an
individual, department and company level?
What is your regulatory burden in the US?
Is your business operating in a regulated sector?
Are you subject to both federal and state regulation?
What legal considerations are key?
Have you found experienced local counsel?
Are you prepared to deal with a more litigious culture?
Which visa do you need?
Would an E-1, L-1 or O-1 visa be suitable?
Do you need to apply for a H-1B Visa?
What is your budget?
How much sensitivity have you modelled in
your projections?
Do you have the support of your investors?
And think about the critical details
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Test the market
How much do you like flying?
Are you invested in testing the market on the ground?
Have you planned an entry phase of at least
six months?
Have you built a local network?
Do you have a soft network to help refine
your strategy?
Have you looked into US incubators or accelerators
for your sector?
Can the industry name your brand?
Do you understand how reputations are built
in your industry?
Have you mapped out relevant conferences
for your sector?
Can you sell like an American?
Do you have a replicable sales strategy?
Are you prepared to sell more aggressively and have
more direct conversations?
How will you price your products?
Have you established your US-specific pricing model?
Are you willing to adapt your pricing when necessary?
Then do
Who is leading your team?
Can you spare a key member of the domestic team
to lead the charge in the US?
What is your plan for remote communication
and decision-making?
Who is on your US advisory board?
What specific expertise do you need to bring in?
What objectives can you set for advisors?
How do you set up in the US?
What is the best legal structure for your business?
In which state should you incorporate?
What banking and insurance choices must you make?
How do you protect your IP?
What is the level of risk associated with your IP
in the US?
What are investors' expectations about IP protection
for your product?
Where will your office be?
What are the costs and regulatory burdens associated
with ideal locations?
Does your location align with your key considerations
as a company?
Should you locate in the usual startup hubs, or several
other US metro areas?
Which taxes are you liable for?
What federal taxes will you need to pay?
What state and local level taxes will you need to pay?
How will you build a talented team in the US?
How will you manage working in distributed teams?
What state regulations and requirements apply
to your business?
What is your remuneration strategy in the US?
How will you determine stock options for
your employees?
What benefits will you offer your team and how
does this relate to your size and location?
How will you manage your team culture?
How can you successfully fundraise in the US?
Do you need a US investor, and can you get
European funding?
What are the expectations of US VCs?
What experiences have European founders had
in fundraising in the US?
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Irrational "inevitability" and other
confessions of venture backed European
CEOs who launched in the US
Launching and scaling in the US market is hard. We spoke to over 100 VC-backed European CEOs who are on this journey,
some with incredible success. While the potential of the US market is undeniable, winning here is far from certain.
Succeeding in the US means overcoming substantial risks as attested by the trail of talented and well-funded
teams who retreated back to Europe. In our conversations, even the most successful CEOs had to contend with
many unexpected challenges we hope their cautionary tales will help you think through various risks and plan
your own US entry appropriately.
" On reflection, the decision to enter into the US felt irrationally 'inevitable'."
In their eagerness to seize the US market opportunity, many did not stop to ask whether expanding overseas
was in their company's best interests. For most, there was no limitation on the growth in their home market.
The option for continued rapid growth was there to be taken, with no risk of the company reaching a saturation
point in their home market in the near future.
"We may have chosen to expand internationally for the wrong reasons."
Worse, some decided to expand internationally to compensate for a lack of growth in their home market, even if their
share of the home market remained very small suggesting that the company had yet to find product-market fit or
a repeatable, scalable, measurable sales process in their home market.
"Wow, this feels like therapy."
Yes this was the reaction from several of the CEOs we spoke to and it underlined to us how isolated many of
the founders felt in making the bridge to the US. The decision to expand internationally was often made quickly
by the Board and then left to the CEO to execute with limited further guidance or support.
" The US market is massive, but we underestimated or were unaware of
the competitors."
While this observation is made time and again, most companies underestimate the breadth and depth of the
US market, its regional differences, and the fullness of the competitive landscape. The fear of missing out is
often anchored to a headline market sizing, without an appreciation for the number, diversity and accessibility
(or not) of markets that make up the total number.
"Setting up in the US was incredibly expensive."
Again, this is a well-known fact, but all the CEOs spoken to underestimated the cost of entering the US market.
The hidden costs included the extent and degree the senior management team focused on US market entry,
the time and cost of hiring (and then firing and starting again), and the time and cost of pursuing the wrong
strategy and not acting swiftly enough to correct course (as well as all the basic costs of setting up in the US).
" I was not sure whether to move to the US or when to do so. Who would run
the business day to day at home?"
If a business is not yet successful and sufficiently resilient in the home market, the expansion adds strain to a
vulnerable position. There's consensus that CEO and/or founder DNA is a necessary (though not sufficient)
condition to effective US entry, and splitting attention between the two continents can diminish the probability
of high success in both markets.
"We made the wrong first hire and this cost us 12 months."
Hiring strong local talent can be a challenge, as there is intense competition from American companies. The job
market is very liquid, driving up prices and lowering retention. Meanwhile, customers expect a local presence and
local services. Strong local partners experts, service providers, strategic partners are impactful for success.
Knowing which role / level to hire is also not obvious. A B2B business may choose to hire a junior salesperson to surface
leads for the CEO to close, as there's a very limited prospect of hiring an A1 Sales leader to join a European startup
with a limited presence in the US. Conversely, a B2C business may opt to hire a senior GM given that there may be
data to support US market readiness. The advantage of this later strategy is that US GM can build a quality team
around them.
"We could have done so much more before we hired people here."
Extensive pre-marketing, market assessment and network building are almost always overlooked. The variety of
activities that a European business can do before entering the US to de-risk the market entry is often overlooked.
Distinguishing between being operational in the US and having people on the ground there full-time is critical.
"We struggled to maintain our culture across the two offices."
Every CEO interviewed spoke of the difficulties of maintaining culture across continents, of underestimating
the impact of miscommunication and of the toll of constant travel on focus and energy.
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Coming to America: relocation tips
from the (street) wise
Generally
Get global entry. This gives you priority through
immigration on the way into the US and also gives TSA
pre-approval which is priority access through security.
Costs $100 + 42 and takes a simple interview at a US
embassy. Well worth it.
Bank account; phone; Social Security Number. This
Golden Trio will get you access to living and getting paid!
Seamless. It's the JustEat equivalent for takeaways.
Essential.
Venmo app for instant cash transfers.
Set up in a co-working space WeWork; Spacious;
The Wing; Knotel; the Neue Collective; AG collective.
Downsize everything other than your budget
which needs to be upsized!
" I literally got laughed at for getting
cash out. "What are you going to use
it for?" was the incredulous question."
Peter Hames, Big Health
" They put on events all the time. You'll
meet people in the same boat as you."
Julie Paolucci, Workwell.io
" If getting a bad haircut from a new
barber or not having your favorite
cheese in the supermarket is going
to bother you, it's going to be a
struggle. You obviously get more in
to a routine as the months go by, but
part of the excitement is knowing
there's always something different
around the corner."
Danny Hakimian, Onfido
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New York
StreetEasy app great for initial apartment hunting.
For transportation, use Via; Uber; Juno; Lyft AND
a MetroCard for longer journeys.
Ear-covering hat and solid winter coat, plus snow-
proof boots, are essential for New York winters.
A friend with a house in the Hamptons, Fire Island,
Montauk for summer weekends!
Comfortable walking shoes and the courage to jaywalk.
Adopt the lingo - HOUSE-ton; 'The City' 'The Bridge'
'Downtown' 'Uptown' 'The 4' 'The L' (train/subway not
tube or metro); waiting 'ON' line.
San Francisco / Bay Area
Craigslist is not just for apartments but also
furniture (given how transient the population is you
can always pick up brand new CB2/Crate & Barrel for
half price, pay with Venmo then use Lugg to go get
it for you).
Clipper card in SF for BART and Muni (the much-
underused tram/tube system)...it's even good on ferries
to Sausalito. Use the Caltrain to travel down the bay.
Never leave the house without a jacket. Weather
changes frequently from sunshine to fog, and there
can be a 10-degree spread between neighborhoods.
East Bay (Oakland) is reliably warmer than SF.
Adopt the lingo: San Francisco = The City, SF, San
Fran...never Frisco. SV = South Bay, the peninsula, the
valley. Although the valley can also mean the central
valley and the south bay is known just as "the bay".
On the weekend, get out of the city. Everyone's
squeezed into the 7x7, and escapes on the weekend to
get fresh air, particularly north to Marin. Outdoor stuff
is a major social activity - it's pretty normal to "go on
a hike" (i.e. a walk) with someone you barely know.
Bolinas or Pacifica for surfing, Mount Tam for hiking,
camping or cycling.
Get ready to spend more on everything than you
thought possible. If you want a laugh, go to Bi-Rite
and take a look at some of their price tags.



" I've lived in four cities on three
continents and New York's real
estate scene is unlike anything I've
seen. If you're on a tight budget and
want to live in Manhattan, you're going
to have to accept some very small
spaces. New York does have a great
public transport system, so if you're
okay with a commute there are plenty
of outer boroughs with a ton of
character and good access to the city.
The StreetEasy app is your best
friend." Danny Hakimian, Onfido
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Specialists in the field
Below is a list of specialists we have worked with in the past or we know offer these types of services.
Octopus recommends that you undertake your own research and due diligence as other suppliers are available
and you want to be sure that you use the right people for your company and your specific circumstances.
Tax
Regulatory
IP
Immigration specialists
Eric Collins -
Frank Hirth
Don Dismuke -
Dixon Hughes Goodman
Bradley Smallberg -
Schissel Smallberg
Michael Hamilton -
KPMG
Cheryl Young - Securities Compliance
Advisors (SCA), focus on fintech
Ingrid Brydolf - Davis Wright Tremain,
focus on healthcare
Heidi Lawson & Greg Hoffnagle -
Cooley LLP, focus on insurtech
Ashford Tucker - Fross Zelnick
Lehrman & Zissu, focus on healthcare
Jon Calvert -
Clearview IP
David L. Cohen -
Kidon IP Corporation
Karen Lee -
Edwin Coe, LLP
Paul Samartin -
Ganguin Samartin
Daniella McGuigan -
Ogetree Deakins
Gloria Lin -
Immigration Law Group
Dana DiRaimondo -
D&S Boutique Business Immigration
Attorneys
Accountants
HR consultants
Insurance
Daniel Glazer -
Wilson Sonsini Goodrich & Rosati
Victor Boyajian -
Dentons
Ed Zimmerman -
Lowenstein Sandler
Ted Rosen -
Akerman
Stuart Bagshaw -
BAB Leap
Greg Capitolo -
Kranz Associates
David Ehrenburg -
Early Growth Financial Services
Bec Sankauskas -
Bexouce International
Shelly Duong -
Mochi HR Consulting
Kim Fields -
Insperity
Elaine Lamb -
La Playa Insurance
Ralph Torres -
Sweet and Baker Insurance
Melissa Gato -
Shoff Darby Insurance Agency
Mark Berkowitz -
Sequoia One
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Sample market entry timeline
5%
US opportunity analysis
Initial product analysis
Initial market analysis
Initial budget analysis
Product-market fit
Legal/Financial Considerations
Visas, legals, tax
Budget proposal
US Leadership
Set US team leader
Regular travel to US
Brand Building
Conferences
Build advisory board
Office Set Up
Office location

Office location
Administrative preparation

Administrative preparation
Incorporate in the US
Talent
US employees
Remuneration / options
Benefits
Culture and communication

Regular travel to US

Regular travel to US

Regular travel to US

Regular travel to US
Ideal US Customer Profile

Initial product analysis

Product-market Fit
Home business analysis
1. You're ready to consider whether or not the time is right for expansion to the US
2. On balance, it is clear that your business has more to gain than to lose by exploring further
3. You have referenceable US customers and a growing pull from the US market
24-21 months ahead
12-9 months ahead
21-18 months ahead
9-6 months ahead
18-15 months ahead
6-3 months ahead
15-12 months ahead
3 months - D-Day
Planning phase
Implementation phase
Timing of Entry
Set entry milestones
Support Resources
Banking
Insurance
Relevant service providers

Banking
Insurance
Relevant service providers


Relevant service providers


Relevant service providers

US employees
Remuneration / options
Benefits
Culture and communication

US employees
Remuneration / options
Benefits
Culture and communication

US employees
Culture and communication
Conferences
Build advisory board
Conferences
Build advisory board
Conferences
Build advisory board

Regular travel to US
US Opportunity Analysis
Visas, Legals, Tax,
Budget Deep Dive
Visas, legals, tax
Set entry milestones
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The 4Ws of product-market fit
The Who
Customer preferences
How do US customer preferences vary from those at home? Is
my customer's behavior in alignment with her preferences?
Customer acquisition
What is the CAC in the target market? What is my predicted ROI?
Competition
How saturated is the market? Who are the domestic and foreign
alternatives? What is my competitive advantage?
Support stakeholders
What other stakeholders are essential to the delivery of the product's value
to the customer? (vendors, distributors, partner organizations, funders,
etc.)? What will developing these necessary relationships entail?
The Where
Regional market opportunity Which regional markets in the US best optimize ease of access,
speed of product adoption, profitability, and sustainability?
Location restrictions
What US restrictions (legal and regulatory) for producing, marketing,
distributing, and selling my product exist? How can I surmount them?
Distribution outlets
Through what media could I develop customer interest in my product?
Where could I best sell my product to my target customer?
The What
Inherent value
What element of my product has been essential to success in my
home market, and what value does the customer extract from the
product? Would this value address the customer's need in the US?
Product features
What features worked in my home market? What features are
context-specific and would need to be revised for the US?
Unit economics
What are my projected costs, revenues, and breakeven point in the
US? What new revenue-generating opportunities exist in the US?
The When
Developing demand
How long does my target US customer need to be educated about my product?
How long do customers take to adopt novel offerings in the target market?
Timing the market
At what stage is the US market for my product? Expansion, contraction or
stagnancy? In what development stage is necessary partner technology/
infrastructure?
Building necessary
partnerships
How long would it take to build essential partnerships? When do these
relationships need to be developed relative to my market entry?
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Building your US ideal customer profile
First, define the ideal customer profile
Then, validate your information on the customer
Determine customer's needs
What business pain are they trying to solve?
How does that pain impact their business?
How do they measure that impact ($)?
What results would they like to achieve, on an
individual, department and company-basis?
What are the potential outcomes of those results?
Define ideal sales target within customer profile
Who are the executives that own the pain
point and are empowered to act? (B2B)
What other roles within the target company
(between one and three) would be productive
entry points for outreach? (B2B)
What results would they like to achieve, on an
individual, department and company-basis?
What are the potential outcomes of those results?
Identify how competitors service the customer
Are they considering other vendors
or using an in-house solution?
On which criteria are you being evaluated?
Define best process for connecting to customer
What is their typical buying process
for a product such as yours?
Can you realistically engage your ideal
customer directly or do you need the help of
a partner with pre-existing relationships?
Where is a critical mass of your ideal
customers concentrated?
Does the customer have to be sought
out, or would they go to the service?
Understand customer's ideal timeline
How long does their typical buying process take?
How satisfactory is this to the customer?
What can complicate/extend their buying
timeline? When do they plan to buy?


your product on the
new customer
How do these leads initially respond
to your solution?
What objections do they raise?
What characteristics of those who
respond validate your ideal profile?
What lessons can you learn from
those who reject your
sales outreach?


your new customer profile
based on the feedback
Does access to leads and
conversion rates increase after
you make changes to your
ideal customer profile?



your new customer profile to
your existing customers
Did you discover significant differences
between the US leads and your
existing successful customers?
How should these differences affect
your sales process?
Is the competitor group you are up
against the same as that of your home
market, or are there significant
local players you haven't
yet faced?
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Tweak
Compare
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Relevant visas
Budget
E-2 visa
E-1 visa
H-1B visa
L-1 visa
O-1 visa
You are planning
to start a company
in the US
Your company is
actively involved
in substantial
trade with the
US (at least 50%
of volume)
You are an
employee
You have been
employed by your
company for at least
one year out of the
last three years
You are an
individual or
entrepreneur who
can demonstrate
extraordinary
abilities
You are planning to
invest a significant
amount of money
in the US
You are a citizen of
a "treaty country"
The US based
position requires
a bachelor's
degree or a foreign
equivalent
You are in an
executive, manager,
or "specialized
knowledge" capacity
-
You are a citizen of
a treaty country
Your company is at
least 50% owned
by citizens of a
treaty country
Your employer is
willing to fill out a
Labor Condition
Application
The foreign company
will remain open and
operational during
the period of your
L-1 employment
in the US
-
2018 average
salary ranges32
*Exchange rate of 0.77 = $1
** OTE refers to On Target Earnings
*** VP of Sales data gathered from clients with $0-20M in revenue that are pre-series A to series.
San Francisco, CA
New York, NY
Austin, TX
London, UK*
Sales
base
| OTE**
base
| OTE**
base
| OTE**
base
| OTE**
Sales Development Rep.
$45-60K | $65-85K
$45-60K | $65-85K
$40-50K | $60-70K
$33-47K | $47-67K
Account Executive
$70-90K | $140-180K
$70-100K | $140-200K
$50-70K | $100-140K
$53-80K | $106-160K
Sr. Account Executive
$90-120K | $180-240K
$90-120K | $180-240K
$60-90K | $120-180K
$67-93K | $133-186K
Enterprise Sales
$120-160K | $240-320K $120-160K | $240-320K $120-150K | $240-300K
$80-120K | $160-239K
Sales Operations
$80-100K | (+5-20%)
$80-100K | (+5-20%)
$60-80K | (+5-20%)
$53-80K | (+5-20%)
Sales Engineer
$80-120K | $150-160K
$80-120K | $150-160K
$70-110K | $95-145K
$53-120K | $73-160K
Customer Success Mgr.
$55-90K | $75-120K
$55-90K | $75-120K
$55-80K | $75-105K
$53-73K | $67-100K
Sr. Customer Success Mgr.
$80-125K | $105-165K
$80-125K | $105-165K
$70-110K | $95-145K
$73-106K | $100-140K
Account Manager
$75-95K | $105-135K
$75-95K | $105-135K
$55-75K | $80-105K
$71-106K | $106-113K
Sr. Account Manager
$90-120K | $130-170K
$90-110K | $130-155K
$70-90K | $100-130K
$80-106K | $113-153K
Marketing
Marketing Coordinator
$50-80K | (+5-10%)
$50-80K | (+5-10%)
$45-70K | (+5-10%)
$27-40K | (+5-10%)
Demand Generation Mktr.
$115-135K | (+10-20%)
$110-130K | (+10-20%)
$75-95K | (+10-20%)
$60-80K | (+10-20%)
Product Marketer
$140-160K | (+5-10%)
$140-160K | (+5-10%)
$100-120K | (+5-100%)
$53-67K | (+5-10%)
Content Marketer
$90-$110K | (+5-10%)
$90-110K | (+5-10%)
$50-85K | (+5-10%)
$27-40K | (+5-10%)
Sales leadership
SDR Manager
$90-130K | $120-170K
$90-120K | $120-160K
$80-90K | $115-120K
$73-87K | $100-113K
Inside Sales Manager
$120-140K | $240-280K $130-150K | $260-300K $100-130K | $200-260K
$106-120K | $212-239K
Head / Director of Sales
$125-150K | $250-300K $110-140K | $220-280K
$100-120K | $200-240K
$120-133K | $240-266K
VP of Sales***
$170-220K | $340-440K $200-230K
| $400-460K $150-170K | $300-340K
$133-166K | $266-333K
32 Betts Salary Recruiting Data
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Sample budget for new ventures
Sample budget
for new ventures

Silicon Valley
New York
London
Activity
Rate
$ Range
$ Range
$ Range
Corporate setup




Incorporation
legal fees
Annual
$1,000-10,000
$1,000-10,000
$500-2,000
Legal fees
(per hour)
/hr
$300-900
$500-1,000
$175-715
Facilities




Hardware essentials
/employee/year
$24,000-72,000
$24,000-72,000
$24,000-72,000
Plus furniture (not
at co-working)
/employee/year
$12,000-120,000
$24,000-72,000
$24,000-72,000
Office space




Lease in SF Bay Area
/SF/year
$60-200
$42-100
$53- 112
Co-work space
/desk/year
$400-600
$500-1,000
$405-400
Employee cost



Salary ranges




VP level
Annual
$200,000-400,000
$200,000-400,000
$120,000-200,000
Director marketing
Annual
$120,000-220,000
$100,000-210,000
$90,000-190,000
Marketing staff
experienced
Annual
$70,000-140,000
$75,000-100,000
$45,000-100,000
Marketing staff
entry level
Annual
$50,000-80,000
$50,000-75,000
$20,000-26,000
Admin




Director (Acct. HR)
Annual
$140,000-180,000
$150,000-200,000
$70,000-140,000
Staff experienced
Annual
$75,000-140,000
$90,000-120,000
$30,000-50,000
Staff entry-level
Annual
$50,000-85,000
$50,000-75,000
$20,000-26,000
Sample budget
for new ventures

Silicon Valley
New York
London
Activity
Rate
$ Range
$ Range
$ Range
Employee cost (continued)


Outsourced accounting/HR



CFO
/hr
$200-350
$200-300
$285-500
Controller /
HR. Director
/hr
$120-190
$125-175
$110-275
Senior accountant/
bookkeeper
/hr
$85-150
$85-125
$45-100
Benefits and payroll
Payroll taxes and
workers comp
of payroll
15%-30%
15%-30%
13.8%-14%
Health insurance
/employee/year
$350-1500
$400-600
$115-205
Vacation
of salary
0-4 weeks
0-4 weeks
0-4 weeks
Payroll service
(5 - 10 employees)
/year
$500-12,500
$500-12,500
$625-11,000
Recruiting
of annual salary
20%-35%
15%-25%
18%-35%
Employee morale
/emp/year
$1,200-7,200
$1,200-3,600
$960-8,700
Other




Marketing
Annual
$12,000-120,000
$12,000-120,000
$8,000-90,000
Insurance
Annual
$3,000-5,000
$10,000-25,000
$1,000-1,850
H1B visa cost
/employee
$3,000-4,000
$3,000-5,000
$2,220-8,880
Travel
/employee/flight
$1,000-3,000
$1,000-3,000
$1,000-5,000
Bank fees
Annual
$0-1,000
$100-250
$50-500

$1,115,431 -
3,235,450
$1,128,395 -
2,894,888
$729,450 -
2,121,330
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Conferences
Industry
Conference / City
City
Link
Agriculture
SV AgTech
Conference
Silicon Valley
Blockchain
The Blockchain
Conference
Austin
Consensys
New York
Cloud
Dockercon
San Francisco
Google Cloud Next
San Francisco
KubeCon /
CloudnativeCon
Seattle
Microsoft Build
Seattle
Reinvent
Las Vegas
QCon
New York
Consumer
Consumer Electronics
Show (CES)
Las Vegas
Grocery Shop
Las Vegas
Internet Retailer
Conference
Exhibition (IRCE)
Chicago
eTail
Boston
Shop.org
Las Vegas
ShopTalk
Las Vegas
Education
ISTE
Chicago
NY EdTech Week
New York
SXSW Edu
Austin
LearnLaunch
Boston
GSV
San Diego
www.svagtech.org/wp/
www.theblockchainconference.com/
www.coindesk.com/events/consensus-2018/
2018.dockercon.com/
cloud.withgoogle.com/next18/sf/
microsoft.com/en-us/build
events.linuxfoundation.org/events/kubecon-
cloudnativecon-north-america-2018/
reinvent.awsevents.com/
qconnewyork.com/
ces.tech/
groceryshop.com/
irce.com/
etaileast.wbresearch.com/
shop.org/
shoptalk.com/
conference.iste.org/2018/
nyedtechweek.com/
sxswedu.com/
learnlaunch.com/
asugsvsummit.com/
Industry
Conference / City
City
Link
Energy
WEEC
Charlotte
EIA Energy
Conference
D.C.
Fintech
Money 20/20
Las Vegas
Finovate
Multiple Cities
Future of Money
San Francisco
Empire Startups
FinTech Conference
New York/San
Francisco
Food
Future Food
Tech NYC
New York
Gaming
Game Developers
Conference
San Francisco
E3
Los Angeles
PAX
Multiple Cities
Healthcare
Digital Health
Summit
Las Vegas
HLTH
Las Vegas
HIMSS
Las Vegas
Rock Health Summit
San Francisco
JP Morgan
Healthcare Summit
San Francisco
Hospitality
The Hotel Experience New York
Insurance
InsureTech Connect
Las Vegas
DigIn
Austin
www.energycongress.com/
eia.gov/conference/2017/
money2020.com/
finovate.com/
futureofmoney.com/
empirefintechconference.com/pages/ny2019
futurefoodtechnyc.com/
gdconf.com/
e3expo.com/
paxsite.com/
digitalhealthsummit.com/
hlth.co/
www.himssconference.org/
rockhealthsummit.com/
jpmorgan.com/
global/healthcareconference
thehotelexperience.com/
HX2017/Public/Enter.aspx
insuretechconnect.com/
dig-in.com/conference/
digitalinsurance-2018
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Advisor compensation
Industry
Conference / City
City
Link
Manufacturing
QCon San Francisco
San Francisco
Media
New York Media
Festival
New York
Real Estate
National Association
of Realtors
Conference
Boston
Robotics
TC Sessions: Robotics Berkeley
SaaS
SaaStr Annual
San Francisco
Telecoms
Telecom
Exchange NYC
New York
Content Delivery
Summit
New York
Travel
Travel & Adventure
Show
Chicago

qconsf.com/
mefest.com/
nar.realtor/convention.nsf/
techcrunch.com/events/tc-
sessions-robotics-2018/
saastrannual.com/
thetelecomexchange.com/nyc/
contentdeliverysummit.com/2018/
travelshows.com/
Commitment
Services
Compensation
Attend quarterly meetings to
provide feedback on Company's
strategy for at least one hour.
Provide reasonable response to
email requests by Company.
Promotion: On top of the regular
advice and insights, Advisor agrees
to actively promote and make
introductions on behalf of the
Company through Advisor's overall
network of business contacts,
including forwarding the Company's
business plan and other materials
as requested by the Company.
Idea Stage is 0.25%
Startup Stage is 0.20%
Growth Stage is 0.15%
Conferences
Commitment
Services
Compensation
Standard Performance plus:
Attend monthly meetings to
provide feedback on Company's
strategy for at least one hour.
Attend one additional monthly
meeting for up to one hour
with a potential customer,
investor, strategic partner,
vendor or employee.
Standard Performance plus:
Recruiting: Advisor agrees to assist
Company in finding additional,
potential founding team members
and employees through the Advisor's
overall network of business contacts.
Idea Stage is 0.50%
Startup Stage is 0.40%
Growth Stage is 0.30%
Commitment
Services
Compensation
Strategic Performance plus:
Twice monthly meetings to provide
feedback on Company's strategy
for at least two hours each.
Strategic Performance plus:
Contacts: Advisor agrees to make
introductions to and assist in the
acquisition of marquee customers,
strategic partners and key industry
contacts and attend meetings
with such potential customers,
partners and key contacts.
Projects: Advisor agrees to assist
the Company on at least one
strategic project as requested
by the Company during the
term of this Agreement.
Idea Stage is 1.00%
Startup Stage is 0.80%
Growth Stage is 0.60%
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Incorporating a US entity
General information
Steps to incorporate
Apply to incorporate in specific state.
Establish a registered agent in that state.
Submit formation documents.
Maintain registered agent.
Maintain state specific taxation and reporting requirements.
Insurance
Completed by
Estimated cost
Local counsel, engaged by the Company
$2,000-5,000
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Taxes
Benefits for employees

Federal
Corporation Tax
Social security
Medicare
Unemployment Tax
State
Corporation Tax
Sales Tax
Franchise Tax
Unemployment Tax
Property Tax
District
Corporation Tax
Sales Tax
Benefit
category
< 10 employees
11 - 50
50 - 200
> 200
Medical
Yes
Yes
Yes
Yes
Dental
Yes
Yes
Yes
Yes
Vision
Yes
Yes
Yes
Yes
Holidays
~ 20 days
~ 20 days
~ 20 days
~ 20 days
401K
No
Yes
Yes,
w/matching
Yes,
w/matching
Equity
Yes
Yes
Early and select
employees
Early and select
employees
Other perks
Context-
dependent
Context-
dependent
Context-
dependent
Context-
dependent
LLC
S Corp
C Corp
General liability insurance + business property insurance
Errors and omissions insurance
Cyber liability insurance
Directors and officers insurance
-
Key man insurance
-
Employment practices liability insurance
-
-
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Recruiters in the US
Industry specific recruiters
Executive search
East Coast
West Coast
Non-executive
Engineering
Sales
Human Resources
Industry specific recruiters
Healthcare
Enterprise
Diane McIntyre -
Calibre One (retained)
Simon Bromwell -
Robert Walters (contained)
Rick Bank -
True Ventures (retained)
Mark Lonergan -
Lonergan Partners (retained)
Jamie Sanger -
Daversa (retained)
Joe Griesedieck -
Korn Ferry International (retained)
Ben Christian -
Carbon Partners (retained)
Spencer Tashima -
Essential Solutions (retained)
Julia Horiuchi -
Robert Walters (contained)
Tony Zammikiel -
Equity Search Partners (contingency)
Chris Johnson -
Artisanal Talent (retained)
Dirk Cleveland -
Riviera Partners (retained)
Cathy Cairns -
Elite Technology Sales Recruiters (contingency)
Katie Pouch -
RJR Partners (retained / contingency)
Bill McHargue -
Talent House (contingency)
Cathy Cairns -
Elite Technology Sales Recruiters (contingency)
Katie Pouch -
RJR Partners (retained / contingency)
Bill McHargue -
Talent House (contingency)
Jennifer Carlo -
Betts Recruiting (contingency)
Robin Toft -
Toft Group (retained)
Mia Jung -
Oxeon Group (retained)
Sean Walker -
Bowdoin Group (retained)
Douglas Madden -
Fortra Search (retained)
Sean Lucq -
SPMB (retained)
Greg Button -
Korn Ferry International (retained)
Joel May -
BridgeGate (retained)
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Metrics for fundraising
Software



Marketplaces
Metrics for Fundraising

Category
Good
Best
ARR
$5-12m
$13-20m
MRR growth
100%
++
Repaying customer acquisition
cost timeline
18-24 months
8-17 months
Gross retention
85%+
90%+
Gross margin
70%+
85%+
Net churn
100%+
140%+
Category
Good
TAM core vertical
$5bn+
GMV organic growth MoM
10%+
6-month retention (both sides)
10%+
Payback timeline for cost of
acquiring both sides
24 months or less
Category
Good
Product
Better; faster; cheaper; more fun
Revenue
At least $5m annual
Minimal awareness
Less than 0.1% penetration
Customer base
Diverse demographically and
geographically
Gross margin
70%+
Net churn
100%+
Category
Good
Fundamental question
Growth and user acquisition -
how can you scale this business?
User growth
10-15% MoM
ARR
$5m+ by time of investment
Upsell/cross-sell
10-20% expansion
Payback of cost of acquiring
customer
24 months or less
Churn
Less than 20%
CAC
Show that organic growth
is very strong
Category
Good
Best
LTV
$50
$200+ (repeat spending)
Market size
$5bn
$100bn+ (growing market)
Revenue growth
100%+
300%+ (organic growth)
Consumer
Fintech
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Software tools for people/
talent functions
Category
Software
Social communication
tools
Project management/
cross-team collaboration
Marketing/external
communication
Applicant tracking
system
CRM software
All-in-all solutions
(video)
(chat + video)
(video)
(video)
Business*
(whiteboarding)
(subscription
businesses)
* For a company moving to Silicon Valley, adopting the G-suite could be seen as best practice, since so many other companies and partners there
use this software.