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Ask HN: Startup outside the US

by cerebrum on 4/23/17, 12:50 PM with 27 comments

• by no1youknowz on 4/23/17, 2:52 PM

  You need to decide for yourself if the hassle in incorporating in the US is worth it and also if there are other reasons for doing so.

  Like you, I am based outside of the US. I'm currently in the UK and yet, I am incorporating in the US.

  The five reasons for this are :-

  1) 99% of my customers are there.

  2) 100% of my vendors are there.

  3) Potential investors are there.

  4) 99% of my financial transactions are in dollars.

  5) My Bank is in the US and no currency conversions eroding profits.

  Of course, some will say why don't I go to London and seek out investment? I have looked into this:

  1) The mindset of a UK investor is vastly different than that of a US investor.

  2) They sum of monies for potential investment is greater for a US investor and so is the level of risk. The sum of equity is greater for the UK investor.

  3) The US investor has many more connections than the UK investor.

  4) The US investor has made many more bets than the UK investor and therefore has much better advice going forward.

  I could go on... But there is 0% chance that I will be starting up in the UK.

  Here's what I have found so far:

  US | YC - $120k in return for 7% of the company's equity.

  London | Bethnal Green Ventures - £15,000 in exchange for 6%.

  London | Founders Factory - £30k for around 7%.

  London | IGNITE 100 - £17,000 in return for 8%.

  London | Oxygen Accelerator - £20,000 for 8%.

  There's probably more, but I doubt you'll get to YC levels of funding and influence in London.

  If someone knows where I could get a better deal on funding, equity and terms. I'd love to know!

  What I am doing, is bootstrapping until I'm ready to onboard an investor.

  I can't really offer you advise, as I don't know your full situation. But hopefully what I have found offers some insight!

• by gdilla on 4/23/17, 3:01 PM

  Apply first. You don't have a decision to make until you've been accepted.

• by dazhbog on 4/23/17, 4:00 PM

  We are outside the US, but incorporated in Delaware, without even going to the US. We did that to keep our options open in case of raising, but we are slowly becoming more and more against raising. Anyways, it was cheap enough (~$700) and now with Stripe Atlas its even easier/cheaper.

  It really depends on your idea, where your customers are and the way you want to execute. In our case we were lucky enough to have had some government grants from various countries, gone through some accelerators and now we are trying to organically grow.

  Good luck!

• by contingencies on 4/24/17, 5:31 AM

  SV is undesirable for visas, general overheads, regulation in some sectors, and segments like hardware. Basically YC seems to be optimized for software-focused startups within 3 months of market seeking SV, US or at least English speaking investors, usually with a US initial market.

  For hardware startups I can strongly recommend considering HK/Shenzhen, as I can personally attest that sourcing, consulting, manufacturing, and capital are readily and cost-effectively available.

• by dotcoma on 4/23/17, 2:25 PM

  There are a number of good programmes in many countries, from the usual suspects (London, Stockholm etc), to places that could surprise you (take a look at Bulgaria, for example).

• by demircancelebi on 4/23/17, 2:28 PM

  If you can be selected to YC, it almost definitely makes sense. The important question is, will you be able to go through it whether than it makes sense or not.

• by bsvalley on 4/24/17, 3:16 PM

  Why do you want to start a startup? What will a startup do for you? Are you working on something besides starting a startup?

  Without these answers I'm affraid we can't really provide any valuable insights for you.

• by amorphid on 4/23/17, 2:52 PM

  Growing a business takes money. Silicon Valley is (for now) where the most money is. It makes sense from that perspective.

  Good luck with your venture:)

• by Lordarminius on 4/23/17, 9:44 PM

  Related question: How do taxes work for companies which are incorporated in US and operate in a second country ?

• by jksmith on 4/23/17, 4:28 PM

  Have you gotten any feedback from anyone who has honestly met their definition of successful?