Securities rules on both sides
Selling shares or convertible instruments to investors is regulated in the United States and, separately, in each investor's country. U.S. private placements usually rely on exemptions from registration, and offerings made outside the United States can rely on a separate framework for offshore sales, but the conditions attached to each have to be followed carefully. The investor's home country may have its own rules on who can be approached and how offering materials are distributed. Using finders or intermediaries who are not properly licensed can create problems in either jurisdiction. Pitch decks and other marketing materials should be reviewed with this in mind before they go out.
Investment review, structure, and tax
A foreign investor that receives certain rights, such as a board seat or access to sensitive technology, may bring the investment within CFIUS review, and in some cases a filing is mandatory. Companies founded abroad often consider a so-called flip, creating a U.S. parent company before raising from American investors, which has tax and foreign exchange consequences at home that need advice there. Withholding tax, reporting obligations, and the treatment of convertible notes or SAFEs can differ depending on where the investor is based. Investors abroad may also face outbound investment reporting in their own countries, which can affect closing timing.
Planning the round
Our first conversation usually covers where your company is incorporated, where the investors are, and what rights they are asking for. We identify which exemptions and filings apply in each country and coordinate with local counsel where needed. We review the term sheet and investor rights so that governance and information rights are deliberate choices rather than accidental triggers for review. The aim is a round that closes on schedule and leaves a clean record for later financings or an eventual sale. If earlier rounds were done informally, we also look at whether anything needs to be cleaned up before new investors run their diligence.
