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Global Startup Funding 101

Fundraising globally opens up a wide range of opportunities for your startup.

But it also brings challenges due to differences in regulations, investor expectations, and market dynamics. 

If you plan to seek investment outside your home country, we have a few tips to help you get prepared. 

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Understand Local Regulations

Every country has its own rules and regulations for raising capital, especially when it comes to offering equity or securities. 

Complying agreements may vary depending on the market you choose. So, it is better to understand them before approaching international investors. 

Here are a few common things to consider:

  • Countries have different securities laws that govern how you can raise capital. 

For example, in the U.S., you need to comply with Securities and Exchange Commission (SEC) rules. In Europe, you might deal with regulations from ESMA (European Securities and Markets Authority).

  • Raising funds from international investors can trigger cross-border rules, including tax implications and foreign exchange controls. 

Keep this in mind if you want to avoid legal pitfalls along the way. 

  • Some countries have restrictions on foreign investments, especially in sensitive sectors like tech. 

You may need to get approval from local authorities before accepting foreign investment.

It is always a wise choice to work with an experienced legal team that understands international fundraising. 

This way, you ensure compliance in both your home country and any countries where you’re raising capital.

Get to Know Cultural Differences in Investment Approaches

Investor expectations can vary significantly across regions. 

That is why, before fundraising abroad, you need to understand the cultural differences.

This is key to successfully pitching your business to international investors.

Here are some cultural differences our CEO Max Babych highlights after ten years of working with startups:

  • U.S. investors tend to favor fast-growing companies with clear scalability and are more open to taking risks. 

They may push for aggressive growth and higher valuations.

  • European investors are often more conservative and focused on sustainability and profitability. 

They may value steady, long-term growth over rapid scaling.

  • Asian investors, especially in regions like China or Southeast Asia, may look for partnerships or strategic alignments with local markets or industries. 

Relationships and trust-building can play a larger role in the decision-making process.

You want to tailor your pitch to match the investment culture of the region you’re targeting.