Five Mistakes Foreign Founders Make Pitching US Investors

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Foreign founders raising money in America make the same mistakes over and over. Here are 5 things you need to get right to raise in the US…

Humility Doesn’t Play in America

“We’ll see how it goes.”

I was at a demo day in NYC a while back, listening to a young British founder pitch her startup. This is how she ended her pitch.

Not good.

“Do you think Elon Musk says, ‘We’ll see how it goes?’” I asked her. “You want to be confident. We’re going to dominate!”

Americans are brash and unequivocal. “We will,” not “we will try to.”

Foreigners are tentative and shy. Folks like that don’t get funded.

When you’re pitching Americans, be bold. It may read as arrogant in your home country, but not here.

Formality Makes You Sound More Foreign

“Mr. Santora, thank you for responding to my message, esteemed sir. We are raising the sum of $1,000,000 and would like to meet to discuss.”

American business culture is informal. Don’t call anyone Mr., Mrs., Sir, or Madam.

Just call them by their first name.

I used to work for Judy Faulkner, the founder of Epic. We called her Judy.

If you can call a multi-billionaire entrepreneur by her first name, you can certainly call me Francis!

When you’re too formal, your pitch comes off as strange and foreign sounding. You want to sound as natural as possible.

Focus on the Right Investors

Even if you nail the boldness and informality, you could still fail to raise from American investors by focusing on the wrong people.

Focus on investors that invest in your country.

Take me for example. I invest in the U.S., Canada, UK, Ireland, Australia, and New Zealand. Anything outside of that is pretty much a no-go.

Those are markets I know in places where I can speak the language natively. So, it makes sense for me to focus there.

Not sure what countries an investor focuses on? Look at their website or LinkedIn.

Pitching people who don’t invest in your country is a waste of time.

Delaware C Corp Is a Must

Every day, I see great foreign startups with the same dealbreaker: they’re not incorporated properly.

If you want to raise venture capital from Americans, you need to be a Delaware C Corporation.

Almost every American investor requires it, especially institutions. It gives us a predictable legal environment.

You don’t need to have a physical presence in Delaware. You never have to set foot there. It’s just the company’s legal home.

If you’re incorporated in a different manner, you can do a procedure called the Delaware flip. Get a lawyer’s help on this.

Forget About Foreign Tax Credits

When British founders contact me, they’re always pitching something called EIS. EIS is a tax credit program for British investors.

Never bother pitching this to Americans.

We don’t know what it is. We don’t benefit from it.

So, it doesn’t matter to us.

Wrap-Up

People from all over the world want to pitch American investors. Many countries have few, if any, angels and VCs of their own.

I love investing in foreign startups! I’ve got one in Canada, two in the UK, and even one in Amsterdam.

But if you want to raise money from Americans, you’ve got to do it our way.

Be bold. Be informal. Pitch the right investors. Get incorporated properly. And forget EIS.

If you can get these five things right, your chance of raising money from Americans will go through the roof.

Have you tried to raise money from Americans? What was it like?

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