Successfully Financing Your Startup in the U.S with Matteo Daste

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The future is bright in the realm of startup immigration. Whether you’re thinking of getting venture capital in the U.S., or perhaps creating a company in your home country and expanding it in the U.S., raising capital is one of the most challenging things to consider.

Matteo Daste, the partner and the head of the Northern California ECVC (Emerging Companies and Venture Capital) practice at Mayer Brown, paints a picture of the current startup landscape and how things have changed over the years.

Innovation is Born Out of Recession

  • A lot of great companies are born out of recession. It’s inevitable for a lot of these large companies to lay off people. As a result, these laid-off employees are inclined to launch their own startups. Hence, recessions, sometimes, can become an impetus for innovation. 
  • For instance, Day One Ventures specifically focuses on a “funded not fired” initiative for people who are laid off and want to create tech startups.
  • We’re entering a time of opportunity. While there may be fewer M&A activities this year, there are a lot more new company formations.

Changes in the Startup Landscape

  • It’s not unusual for startups to be based everywhere. Nowadays, several teams are more dispersed for a number of reasons (ex. lifestyle, cost optimization, visa issues, remote staff). A lot of foreign founders have engineering teams in foreign countries, and it doesn’t make sense to bring everyone over, even if they could. 
  • Many U.S. cities have been growing fast due to emerging dynamic tech markets. 
  • Several founders launch startups out of passion. But whenever a startup begins to raise money from investors, reality sets in. The investor wants to see a return and the only way to really have an exit is through M&A, and not through IPO.

Incorporating and Owning Equity in the U.S.

  • Founders may choose to incorporate directly in the U.S. and then join an accelerator later on. However, it can be difficult for them to fundraise and also just to be physically present to operate. 
  • The vast majority of the cases involve founders who form a company in a foreign country where they have money there and they can reorganize the business for U.S. entry. That way, they can go to market and have some traction, giving them enough resources to pay for immigration. Plus, they have something to show investors when they come to the U.S. to pitch. 

Landscape for Raising Capital Over the Next Months

  • If you already have an idea you want to pursue, you can get into an accelerator incubator in the U.S. to get some initial funding. If you can get through immigration, then you can create a Delaware startup, get your visa, grow your product, and eventually create subsidiaries in other countries for your international market expansion. 
  • If you already have a company in your home country, you can absolutely still fundraise in the U.S. Sometimes investors and customers require you to have a U.S. entity or for that entity to be the holding company of the foreign entities. In that case, this Delaware flip process can exist to change the majority top-level ownership from international to U.S.-based.
  • The ability to be able to lawfully stay here is critical because that’s what allows them to build a network that is going to facilitate the fundraising, the product placement and the marketplace. 

When you’re thinking of getting funding and you’re outside of the U.S., you can still open up your networks and help the company with developing strategic relationships. Ultimately, it’s no substitute for being here in the U.S. and doing that yourself as a founder.

If you want to learn more about raising capital in the U.S., check out