Advice is expensive – but forewarned is forearmed.
The collective advice of our founder community is that it’s worth investing in advice in three key areas: the legal aspects of company structure, formation and tax; HR and employment law; and immigration – what Elizabeth Jamae of immigration lawyers D’Alessio Law Group calls ‘the Holy Trinity’ of building out a US operation. It would also be fair to add a good recruitment advisor and a capable bank to this list.
Get professional advice early: on legal & tax, employment and immigration
Use your network, and if you haven’t got one, talk to Notion!
Take advice as to whether to ‘flip’ to a Delaware holding company
In all these professions, there are plenty of charlatans – including those who monitor lists of company formations for suitably green targets. Get recommendations from either your network or from people who have been through the process before. All of our founders have spent time building strong networks (indeed this might be one of the defining skills of successful high- growth entrepreneurs), and it is here, on the cusp of a major move to a new territory, that those relationships can really pay dividends. Gareth Davies of Adbrain – himself a Googler and so by no means unconnected to the Silicon Valley ecosystem – talks about a ‘VIP curtain’ behind which everyone in an industry knows everyone else. This is where great advice comes from.
The big issues which deserve professional assistance fall broadly into two categories: decisions which have long-term ramifications, and which are therefore high-risk and harder to fix if you make a mistake; and issues which require the experience and relationships of an insider to produce the best outcomes.
A good example of the former is your company structure: a well-trodden path has traditionally been to ‘flip’ a UK business and install it under a US (usually Delaware) holding company – or ‘topco’. Five years ago, many US VC firms would have insisted on this before investing, because, for example, it’s easier for a US company to execute a US IPO and US customers are more comfortable contracting with other US companies.
Today, however, the favourable comparable UK and Irish corporation tax regimes, in particular, have made flipping less attractive and many VCs are seeing value in making the US company the subsidiary. In short, it’s a big decision and one which deserves up-to-date (and personalised) advice.
A good example of the latter is immigration. The visa regime is complex but not incomprehensible. However, where a good immigration lawyer adds value is in their personal relationships with the US Citizenship and Immigration Service and the collected, refined experience of hundreds of applications – which for a tech firm includes articulating the value of your complex proposition in terms which a disinterested (and likely underpaid) assessor can appreciate.
Any European enterprise tech company, with the ambition to be a category leader, must conquer the US. Download your copy of “Crossing the Atlantic” here.
A few words of wisdom from the Notion expert network:
It will typically make sense to set up a US subsidiary as opposed to a topco, and to separate the US and non-US businesses, and therefore your US and non-US taxable income. This is particularly important since US corporate tax rates (federal and state), totalling about 40% are typically twice the level of the UK and three times the level in Ireland. Daniel Glazer, Partner, Wilson Sonsini Goodrich & Rosati
I think one of the indicators of success is people’s ability to work their network and to get things done – and the European expat community in the US is enormous. It’s not like we’re expecting people to connect with a Senator or something – it’s very achievable. If you’re an entrepreneur in the UK, you ought to be able to connect the dots and make contacts. Ryan Floyd, Managing Director, Storm Ventures
Founders and investors underestimate how hard immigration is. The US has very restrictive attitudes to immigration and applications will be denied unless you come up with creative ways to solve what they’re looking for. Elizabeth Jamae, Partner, D’Alessio Law Group
Crossing the Atlantic