Expanding to the US

The guide for European entrepreneurs

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The Index Ventures experience

Our insight

Index Ventures partners with founders, across both Europe and the US, who are building world changing businesses. Operating at this level of ambition requires dedication, grit, and a relentless focus on doing what is best for your company. In the majority of cases, taking on the behemoth that is the US market is a necessity to achieve global leadership.

We have supported more than 40 European tech companies that have expanded to the US, including 9 that have gone on to become public companies. Being involved at every step of the journey - planning, launch, and scaling - has taught us a great deal about the opportunities and pitfalls.

Index also has personal experience of crossing the Atlantic, being the only European-born VC firm that has successfully expanded to the US. We now have a team and portfolio equally balanced across both continents. Much of the advice in this book therefore reflects not just the learnings of the entrepreneurs we work with, but our own first hand experience of launching and scaling in the US.

Transforming into a global tech player by making it in the hyper-competitive US environment is a daunting challenge. This guide has been written to help you. We provide frameworks you can use to plan and execute the right combination of strategic, tactical and practical moves. We aim to help you understand what you need to do, when you need to do it, and how to do it, in order to win in the US.

Changing landscapes

Fifteen years ago, building a major tech business in Europe was extremely difficult. Faced with a paucity of tech-savvy customers, talent and capital, founders often chose to relocate their businesses to the US as early as they could. Zendesk and MySQL are prominent examples of European-born companies that moved over in their entirety at Series A, and continued to build their companies successfully from there.

Today, conditions are very different. Europe has many success stories, including two tech leaders, Adyen and Spotify, approaching $50bn valuations. At the same time, building an engineering team in the Bay Area is more challenging and expensive than ever. With these forces in play, founders have more choices about how long, and in what capacity, to remain in Europe.

Starting in Europe nowadays can have advantages; technical talent is more available (and affordable) than in the US, and employees tend to be more loyal. Europeans, with smaller domestic markets, also tend to think internationally from day one, which is much less common in the US. And certain sectors, including finance, luxury, travel, and gaming, have a rich heritage in Europe, offering domain expertise and partners that can actually give Europe a competitive edge versus the US.

As a result of this evolution in Europe, we are seeing four distinct trends.

i) Startups are further along in terms of scaling at the point they expand to the US than they were 5 or 10 years ago, in terms of funding, customers, and headcount. US expansion is primarily for commercial roll-out. Our survey of European and Israeli founders who have expanded to the US validates this, with 78% ranking ‘access to customers’ as their #1 reason.

Rank your reasons for expanding to the US
Average weighted ranking of factors
Index survey of European founders who have expanded to the US. Sample size = 47

Score from 1-5 shows average weighting of each response

ii) Europe has built global B2C successes with limited US team presence by leveraging online distribution channels. For example, King, Supercell, and TransferWise achieved significant scale from their bases in Sweden, Finland, and the UK, respectively.

iii) Europe is building B2B successes which do not operate at all in the US. Broader adoption of digital and cloud services means that market opportunities outside of the US have widened, and we are seeing regional B2B companies on trajectories to $5bn+ valuations. iZettle, a point-of-sale payments company for small merchants, is an example of this emerging trend. Retaining its HQ in its birthplace in Sweden, iZettle raised €273m and established a strong presence across Europe and Latin America, The company was acquired by Paypal in 2018 for $2.2bn.

A cohort of promising European-focused B2B companies are now addressing markets that are sizable, yet don’t necessarily translate to the US context. For example, Swile (Series C) is disrupting and digitising the market for meal vouchers - an employee benefit that does not exist in the US. Others operate in regulated sectors which are fundamentally different in the US from Europe - for example, KRY (Series D), offers remote access to primary healthcare services.

iv) European founders are increasingly securing funding from top US investors without needing to move to the US. US investors are increasingly willing to come to Europe looking for entrepreneurs to back. It is no longer necessary to be on the doorstep of Sand Hill Road to forge these relationships, nor to commit to moving to Silicon Valley as part of any fundraising with them. Not to mention the extraordinary growth in funding available to entrepreneurs from increasingly sophisticated European-based VC’s.

Some European founders will still choose to relocate from day one, and to build their entire business in the US, following the examples of Stripe (the Collison brothers moved from Ireland), or Datadog (Olivier and Alexis moved to New York from France). While this can be a valid and exciting proposition, it is not our focus here.

We will instead focus on companies that base themselves, and build their product, initially in Europe, and that only later expand to the US.

Covid-19 update

At the time of writing, it is August 2020, and our world is in the throes of the Covid-19 pandemic. We have seen over 700,000 deaths globally. Many countries remain in full lockdown. Others are experimenting with opening-up, despite signs of a resurgence in infections. Multiple vaccines are in development, but no-one is sure when one will be approved, nor whether a vaccine will actually offer lasting immunity. Limitations on social interaction may be required for years to come. Economies are reeling, and the future of international air travel is, ironically, ‘up in the air’. Meanwhile, certain sub-sectors in tech, such as ecommerce, and applications around remote- work and healthcare, have become critical to the orderly functioning of society. Underlying tech and fulfilment infrastructure has been rapidly extended to accommodate the explosion in demand.

Whilst it is unclear how long economic recovery will take, we are certain that innovative technologies, and the creativity and resilience of startups in particular, will be critical to the path forward.

Most of the research underlying this guide was conducted before the pandemic. Our conclusions and strategic advice remain broadly unchanged. We believe that the underlying thesis we have set out will remain intact: The US will still be a critical market for European tech startups, and the overall playbook for winning in the US will persist.

Tactically, however, the expansion playbook of the past will need to be adapted, driven by two new realities:

Short-term Longer-term

International Air Travel

Not possible, or very limited

Less frequent trips

Face-to-Face interactions

Not possible, or very limited

Less frequent meetings

Visa applications for US

Visa services suspended and/or backlogged
H1-B and L-1 visas unavailable

Visa services resume, but political pressure to keep application criteria tight

In the short-term, restrictions are in place that curtail most travel between Europe and the US, and most non-essential gatherings. These may slowly be lifted, but there will be a reluctance to return to ‘business as usual’ so long as there remains the risk of a second wave of infection. At the same time, US visa services are suspended, so relocating staff from Europe to the US is not possible. This is likely to remain the case through 2020, and much of 2021.

I’m keen to relocate to New York, but it’s simply not possible for the time being, especially since I have children. The team continues to sell into the US remotely, and I’m hiring a local salesperson, with a fully virtual interview process. We’ll hold off on a senior sales lead until I can get out there.

Anonymous European Founder

In the longer-term, we can expect ‘a new normal’ in how we work. The prolonged lockdown has permanently shifted our habits, although we don’t yet know how far. Will we ever return to our offices Monday through Friday? Will business relationships, or closing deals, go back to requiring face-to-face meetings? Concerns around climate change, cost of living, and lengthy commute times, were already shifting behaviour. The lockdown has given the world a crash-course on how to use Zoom, Slack, and other modern tools, accelerating these trends by 5 years or more.

Let’s explore how we specifically expect these changes to affect startups expanding from Europe to the US:

Theme Short-term Longer-term

Landing Teams & Founder Moves

Not possible until air travel and visa restrictions are lifted

Will remain a critical part of the playbook

First Local Hires

First hires may need to be made fully remotely, before a landing team is in place.

As a result, first hires likely to be less senior than planned - eg ICs not managers

Will remain a critical part of the playbook

Sales and Customer Engagement

No face-to-face meetings possible, entirely remote model

Wider acceptance of ‘inside’ sales model, even for big-ticket purchases. But sales cycles and complexity unlikely to be reduced

Remote Teams

Enforced work-from-home for all

Fully remote models will become more common versus the idea of a US ‘hub’. But most companies will adopt a hybrid, flexible model

Travel between US/Europe offices, including full-team offsites

Not possible

Will shift towards fewer, but longer, trips and gatherings.

Although we expect sales travel to decline substantially, we believe that in-person meetings will still hold significant value with particular customers or at certain points in the sales cycle.

Abakar Saidov

CEO & co-founder, Beamery

With the immediate digitalization of society because of covid-19 and the forced WFH regimes, the world is ready to see world-leading startups not just come from anywhere but also grow up anywhere.

Mårten Mickos

Former CEO, MySQL

We will update this book, as the path forward becomes clearer.

Outlier Successes

Our research identified 33 European-born tech ‘unicorns’ created since 2008, and a further 23 from Israel, that have gone on to achieve success in the US. Success has been defined through a combination of total US revenues, US growth, US percentage of overall revenues, and US category leadership (top three). They span different sectors, business models, and expansion strategies. Of these 57 outliers, 43 (75%) are B2B, and 14 (25%) are B2C.

Colour logos indicate Index investments.

Europe B2B
Europe B2B
Europe B2C
Europe B2C
Israel B2B
Israel B2B
Israel B2C
Israel B2C

Our take

We are confident that Europe will produce more and more tech success stories in the years ahead. The ambition is there, and the essential elements are coming together: strong talent pools; experienced leaders, investors, and service providers; excellent infrastructure; and generally well-regarded legal systems and regulation.

Some of these startups will succeed without looking to the US, achieving a scale beyond anything we have witnessed to date, and creating tech leaders that will list on European stock markets. But the majority will still operate in global markets, with global ambitions. Europe can support the R&D and investment needs of these startups, and they will be able to sell to consumers across the world.

However, in one area, Europe continues to slip further behind. Its corporations are still too conservative when it comes to innovative technology. They invest less in technology, and when they do, it is too often focused on compliance, rather than on business transformation. European software companies selling into enterprises are therefore forced to succeed in the US, before they are given the chance to do so in Europe. Until this changes, we will continue to see entrepreneurs crossing the Atlantic to scale and to list software companies. And the global competitiveness of European corporates will continue to be eroded.

Investment in B2B software 2020-2024 ($billions)
Source: Gartner

Methodology

The recommendations in this handbook are based on the most extensive research ever undertaken into US expansion by European tech startups:

  • Analysis of 353 European (275) and Israeli (78) VC-backed startups that have expanded into the US over the last 10 years
  • Extensive survey covering US expansion strategies, completed by the founders of 104 of these startups
  • Deep-dive research into the 33 European unicorns that have succeeded in the US
  • In-depth interviews with the founders of 23 European companies at different stages of US expansion, including 11 unicorns
  • Insight and experience drawn from the Index team across Europe and the US
  • Advice from leading service providers, including lawyers, recruiters, tax advisors, and investors

Archetypes for expansion

Only a small proportion of European tech companies that expand into the US grow to the scale of global category winners. For those that have succeeded, what are the strategies and factors that enabled success? And how did they design their organisations to maximize their potential?

A lot of my time is spent working with founders on where they are headed, thinking ahead and helping them chart the course to where they want to get to.

Ari Helgason

Index Ventures

We have synthesised our analysis and case studies into four distinct archetypes. These are organisational templates that startups can follow as they expand into the US.

The archetype that is right for you will depend more than anything on how you would answer these two questions:

  1. How large is the US as a percentage of your total addressable market (TAM), and to what extent are you focused on capturing this market?

  2. Do you need boots on the ground in order to either acquire (sales) or serve (operations) customers?

Other factors can also influence which archetype is right for you, but the classic business tenet ‘follow the customer’ is still usually true today, even as software continues to eat the world.

Remove all patriotism from the discussion. Be coolly rational, not emotional, and go where it makes sense for your business.

Mårten Mickos

Former CEO, MySQL

Regardless of which of the following four archetypes is applicable, for the purpose of this book, startups tend to share similar beginnings. The founder, or founding team, is based in Europe. They have a vision for a new product or service. Europe is where they build their early product, raise angel or seed funding, and make their initial hires. Typically, the first users or customers are in Europe. Sometimes there might also be early US users or customers, either introduced via the personal networks of the founders or early investors, or acquired from marketing activity in Europe. By working with these early users, the team finds its way towards product/market fit (PMF).

It is after this phase that we start to see forks in the road, as different companies chart different courses.

First we will outline the Compass - the extreme pivot to the US.

Second, the Anchor - a more modest expansion model.

Third we will cover the ‘middle way’, or Pendulum.

And finally the Telescope, relevant to self-serve and marketing-based models of customer acquisition.

CompassCompass

AnchorAnchor

PendulumPendulum

TelescopeTelescope

For the sake of completeness, we also mention two other approaches (neither is treated as an Archetype): Transplant, where the full team relocates from Europe to the US early in the journey, and Regional, where the company chooses not to enter the US market at all.

To determine which archetype your company is, and to visualise what you journey to US expansion might look like, check out our ExpansionPlan web app, available on the Index Ventures website, in the Resources section.

Summary of Archetypes - organisation at point of listing or IPO

Archetype US % of Revenues Executives in US GTM hub Engineering hub Listing

Transplant

>50%

All execs

US

US

US

Compass

>50%

CEO/founder
All execs over time

US

Europe

US

Pendulum

30-50%

CEO (later or temporary)
President US

Some functional execs

US and Europe

Europe

US or Europe

Anchor

15-30%

President US
No functional execs

Europe

Europe

US or Europe

Telescope

Any %

VP Business Development

Europe

Europe

US or Europe

Regional

0%

-

Europe

Europe

Europe

Mapping our archetypes in terms of US% of Revenue and US% of Total Headcount
Mapping our archetypes in terms of US% of Revenue and US% of Total Headcount

CompassCompass

Built in Europe, sold in the US.

For companies with a large (>50%) US TAM, as well as the ambition to pursue it, the organisation and leadership as a whole needs to pivot to the US as its new ‘true North’. You will gravitate towards a setup where the bulk of R&D (engineering & product) remains in Europe, but the CEO moves to the US, and your GTM (go-to-market) teams are focused there. Over time, a new set of global functional leaders is hired in the US.

Compass is the dominant archetype for enterprise software startups.

B2B examples: Collibra, Mimecast, Algolia, Nexthink, UiPath, Unity Technologies

B2C examples: None

Compass - Typical Journey

  1. Raise Seed funding, and build product from Europe, establishing product/market fit.

  2. Acquire customers from the US and service them remotely.

  3. Raise Series A led by transatlantic or US investor.

  4. Refocus efforts on US versus Europe - both for sales, and for product roadmap.

  5. Strengthen product management, so the CEO can step away from day to day involvement.

  6. CEO moves to (or spends more time in) the US.

  7. Build a small sales team in US, led by a player/coach.

  8. Raise Series B led by US investor.

  9. Scale your GTM team in US - including CMO and CRO.

  10. CEO relocates (if they haven’t already).

  11. Raise Series C.

  12. All non-technical leadership is now in the US, with the exception of a dedicated GM EMEA.

  13. Raise Series D.

  14. Hire CTO and/or CPO in the US, as it’s hard to find candidates in Europe with proven experience at this scale

  15. Consider a secondary engineering centre in US.

  16. Build customer-oriented product team in US, to complement technically-oriented product team in Europe.

  17. Further fundraising, as required for continued expansion.

  18. List in the US.

AnchorAnchor

Tethered, like an anchor, in Europe

For companies with a larger opportunity in Europe and the rest of the world, and a US market representing 15-30% of TAM, the centre of gravity will likely remain in Europe.

The Anchor archetype is common in situations where US expansion comes later in the journey. At this point, you will have a substantial European business to protect and grow, and a more mature leadership team in place. It will take some time for the US to become as significant a market, so you don’t want to pivot your attention and organisation there, at least initially.

The Anchor archetype is often appropriate for markets with cross-border value propositions, where Europe’s patchwork of wealthy national markets presents more opportunity than the borderless US. In the Anchor model, you leverage the leadership and expertise built in European markets, in order to launch a localised version to capture market share in the even larger US market.

B2B examples: Adyen, Funding Circle

B2C examples: Farfetch, TransferWise, Revolut, HelloFresh, Secret Escapes

Anchor - Typical Journey

  1. Raise Seed funding, and build product from Europe, establishing product/market fit.

  2. Focus on domestic customers. If you operate cross-border, localise in English.

  3. Raise Series A led by European investor.

  4. Focus on European expansion for now, rather than on US and expand into an additional European market.

  5. Raise Series B led by European investor with strong US network.

  6. Expand into further European markets.

  7. Research the US market, with frequent visits, and preparing a launch plan.

  8. Raise large Series C, led by transatlantic investor.

  9. Send a landing team to launch the US, and support them on product as you’ll need early US localisation to succeed.

  10. Retain your leadership team in Europe. It is likely to include one or two executives relocating from the US.

  11. Raise Series D, led by transatlantic or US investor.

  12. Hire US President as traction becomes clear.

  13. Retain all other leadership in Europe, and founders remain in Europe.

  14. Raise Series E.

  15. Listing in Europe (maybe in US).

PendulumPendulum

Distributed customers, distributed organisation

For companies whose US market size falls somewhere between 30-50% of TAM, it can be challenging to decide which continent should hold the centre of gravity. You need to balance these demands by embracing distributed leadership, ambiguous prioritisation, and organisational complexity and duplication. It is still possible to achieve exceptional growth in this scenario. But it requires more discipline in strategic decision-making, and in leadership communication.

Pendulums are usually companies that have delayed their launch into the US market. This may reflect an attractive opportunity to consolidate a leadership position across Europe (and potentially other geographies too). Alternatively, US market entry may require a level of funding that isn’t available early in the journey (particularly in B2C), or complex product localisation that cannot be tackled earlier. However, delayed US launch can also be the result of poor strategic decision-making, or poor execution.

By the time that attention turns to the US, the organisation is more mature, with an established leadership structure in Europe. Competitors in the US may have also moved ahead, limiting the landgrab opportunity.

As traction builds in the US (often following the Anchor archetype in the early days), and the growth potential is proven, the company needs to divide its attention: Retaining focus on its existing and dominant European markets, but needing to prioritise the US opportunity to stand any chance of winning there. Over time, the organisation and leadership spread out. Founders may split their time (ie their lives) between the US and Europe, and functional heads will be hired in either geography. A global mindset is essential, plus a tolerance for extensive travel, and calls at all hours of the day or night.

B2B example: Criteo

B2C example: Spotify

Pendulum - Typical journey

  1. Raise Seed funding, and build product from Europe, establishing product/market fit.

  2. Focus on European customers, but establish English as primary language, for product and internally.

  3. Raise Series A from a European investor with strong US network.

  4. Focus on European expansion, launching into 2 additional European markets.

  5. But research US market, with frequent visits and preparing a launch plan.

  6. Raise large Series B led by transatlantic investor.

  7. Send a landing team to launch the US, supporting them on product as you’ll need early US localisation to succeed.

  8. Strengthen product leadership to free up time for CEO. Likewise for European commercial leadership.

  9. Founder spends extensive time in the US to oversee the ramp-up.

  10. Raise Series C led by US investor.

  11. Founder potentially relocates to the US as traction proven, else splits time.

  12. Hire leadership, and build functions, based on where you find the best talent (US or Europe).

  13. Raise Series D.

  14. US probably single largest market by now.

  15. If the right CTO/CPO candidates can no longer be found in Europe, relocate execs from US as it’s hard to find candidates in Europe with experience at this scale.

  16. Leadership team now distributed across Europe and US.

  17. Raise Series E.

  18. Consider a US engineering centre.

  19. List where it makes most sense for your business - US or Europe.

TelescopeTelescope

Focus on US, through a lens located in Europe

The US might represent the majority of your overall TAM, but you have a GTM model that is self-serve; ie customer acquisition is through marketing and growth. And your product is also purely software, so you don’t need an extensive distribution or fulfilment structure. Without the need to build out a complex sales or operations organisation on-the-ground, the bulk of your leadership and headcount can remain in Europe. The US - and if applicable, Asia - only requires a smaller team, focused on customer support, plus potentially business development. The organisation is like a telescope, able to focus on the US market and customers, through a lens located back in Europe.

This is the main archetype for B2C startups when distribution is through app stores or digital marketing channels. In B2B, even if software companies start with a self-serve GTM model, few stick with it as they scale. Self-serve can work for selling to small businesses, or to individuals within larger enterprises. But with success and ambition, companies usually move up the value chain, selling larger deals, to larger customers - requiring an increasingly sophisticated sales model. At Index, we have witnessed this evolution first-hand at Zendesk, Dropbox, and Slack. So in practice, the Telescope archetype tends to morph into the Pendulum or Compass in the most successful B2B companies, albeit postponed by a few years.

B2B examples: Typeform, Pipedrive, Gett

B2C examples: King, Supercell, Skype, Lightricks, Waze

Telescope - Typical journey

  1. Raise Seed funding, and build product from Europe, establishing product/market fit.

  2. Acquire customers globally, but localise in particular for US users.

  3. Raise Series A from transatlantic or European investor.

  4. Focus on growth metrics across the whole funnel, optimising in particular for US users.

  5. Make frequent visits to the US to cultivate relationships with strategic distribution partners.

  6. Establish small business development team (likely in the Bay Area) as you’ll probably have major channel or product partners in the US.

  7. Raise Series B led by transatlantic investor.

  8. Hire business development lead in US.

  9. Build US support team in secondary hub, or remote.

  10. Explore ways of moving up the value chain with higher ACVs and larger organisations, using inside sales (B2B only).

  11. Raise Series C led by US investor.

  12. Scale-up inside sales in US secondary hub (B2B only).

  13. Leadership team mostly in Europe, but likely to include several executives relocating from US (eg VP Growth or VP Product).

  14. Raise Series D.

  15. Set up enterprise sales function, if you continue to move up the value chain (B2B only). If this happens, you’re likely to morph into the Compass archetype...

  16. If the right CTO/CPO candidates can no longer be found in Europe, relocate execs from US as it’s hard to find candidates in Europe with experience at this scale.

  17. Raise Series E.

  18. Listing probably in the US.

For completeness, we can identify two other archetypes. However, these fall outside the scope of this handbook:

Transplant

As noted earlier, European founders targeting sectors with a large (>50%) US TAM may choose to relocate entirely to the US at an early stage, and build the company wholly from there. Effectively, they are creating a US company from day one. As they scale, these companies often leverage their network and brand to rebuild a European team, with significant, but secondary, engineering and GTM teams.

B2B examples: Zendesk, MySQL, Stripe, Datadog

Regional

For European companies with zero US TAM, there is of course no need to expand to the US at all. As noted earlier, we predict a lot more European-focused success stories, in B2B as well as B2C, in the years ahead. Particularly in regulated sectors such as financial services, insurance, property, healthcare, and education.

B2B examples: Personio, Alan, KRY, Swile, Payfit

B2C examples: Deliveroo, Just Eat Takeaway, Delivery Hero, Zalando, BlaBlaCar

How Important is the US Market?

To determine which of our proposed archetypes offers the best roadmap for your startup, you need to quantify the importance of the US market to your success. What percentage does the US represent of your Total Addressable Market (TAM)?

We were driven by the view that the US would be the biggest market eventually, so our GTM plans were heavily based around this consideration.

Joshua Jian

Head of Corporate Development, Credit Benchmark

Startups should think of TAM in terms of primary markets - where you need to succeed, in order to achieve category leadership. This usually means:

  • North America
  • Europe
  • Japan
  • Australia
  • South Korea
  • Singapore
Does winning mean winning the US? This is a huge question and I keep asking it. If it does, it requires a huge change in my life and in the organisation.

Christophe Pasquier

CEO & co-founder, Slite

Secondary markets are those where your product is still relevant, but where the opportunity is likely to be smaller, and more fragmented. These usually include:

  • Middle East
  • Latin America
  • South East Asia
  • South Asia
  • Africa

You should not expand into these regions if doing so could reduce your chances of success in core markets. Expansion is usually best delayed until you are close to, or following, listing.

China and Russia are out-of-bounds for most (but not all) startups, due to embedded domestic competitors, and barriers to doing business (regulation, political risk, or the need for local JV partners).

There can be exceptions to these general rules. For example, Farfetch (luxury B2C) has been very successful in China, and TransferWise (cross-border B2C payments) is highly relevant to immigrant communities from emerging markets. Even in B2B, core markets can vary, particularly for SMB-focused propositions. For example, iZettle scored major successes in Brazil and Mexico, as did Mimecast in South Africa. You therefore need to adjust which countries are core versus secondary, according to the dynamics of your sector.

Recasting data from IDC’s Global IT Spending 2020 report leads to the following TAM breakdown across core markets:

  • North America 53%
  • Europe 31%
  • Japan 11%
  • Australia 3%
  • South Korea 2%

From this ‘base case’ of roughly 50% US TAM, we expect most European B2B companies will therefore continue to fall into our Compass archetype, particularly in enterprise SaaS.

Figure out where the opportunity is, figure out where the money is, and grow your business there.

Jan Hammer

Index Ventures

We see more openness to new and innovative technologies from US corporates, relative to those in Europe. Where US corporations see technology as an investment, and as a source of competitive advantage, Europeans are still more likely to view it as a cost.

This is reflected in much higher US corporate IT budgets. According to Gartner, expenditure on B2B software in North America will be $240bn in 2020, compared to $106bn in Europe. Over the next four years, they forecast growth of 15.4% CAGR in North America, compared to just 8.6% in Europe. And this doesn’t even capture differences between on-prem and cloud software, where we suspect the gap would be even wider.

Corporations headquartered in the US generally recognize two important things earlier than their European counterparts. First is that technology is a source of competitive advantage. Second is that, to be competitive in the war for tech talent, you have to enable your people to access and use the best technology. These two forces have resulted in a swifter adoption of products from early stage companies in the US.

Jacob Jofe

Index Ventures

US businesses are more likely to increase IT spending in order to upgrade outdated infrastructure (whilst) European ones are more likely to turn on the boosters due to regulations like GDPR.

2020 State of European IT

Spiceworks

European corporates tend to be more risk-averse, avoiding startups and preferring instead to buy legacy solutions from established software providers. Early-adopters are therefore concentrated in the US. We also see shorter average US sales cycles and higher ACVs, even in the metrics of later-stage SaaS businesses.

Once you have US case studies, you can sell more easily to corporates in Europe.

Felix van de Maele

CEO & co-founder, Collibra

We’ve just landed a European blue-chip after 3 years. In the US, the same decision would have taken 3 months - they are just more open to innovation.

Sacha Herrmann

CFO Nexthink

For enterprise B2B startups, these factors can make the US an even more important market than the 50% US TAM headline suggests. This is less true for SMB-focused startups, which may therefore align more closely with the Pendulum archetype, rather than the Compass.

Our US users are more savvy, more engaged, and monetise better across all use-cases.

Christophe Pasquier

Founder and CEO, Slite

You get media and PR attention from top tier outlets once you make inroads in the US market.

Ran Peled

Former VP marketing, Trigo

Corporate conservatism is one of the biggest weaknesses in Europe’s innovation ecosystem, and it needs greater attention from Europe’s corporate CEOs and CIOs.

Dominic Jacquesson

Index Ventures

The Archetypes in B2B

The most successful B2B startups sustain exceptional revenue growth year-after-year. However, using public listing as a milestone of having achieved true scale and success, the journey from founding is still a long one. Whilst every company’s route is unique, we have summarised a whirlwind, but credible, 9 year timeline for an ambitious SaaS startup today, in terms of funding, headcount, and ARR (annually recurring revenue).

In the sections which follow, we will present a case study that illustrates each of our four archetypes for US expansion. In each case, we will explore how headcount and revenue metrics might break out between Europe and the US.

Journey from Founding to Listing for a SaaS startup

B2B Compass

Compass Archetype
Illustrative journey from Founding to Listing

Archetype CompassCompass

Collibra - A playbook for European enterprise SaaS success

About: Collibra helps organisations unlock the value of their data, turning it into a strategic asset.

Founded: Brussels, 2008

Fundraising: 2009 €1.2M Seed
2012 €1M Series A
2015 $23M Series B (Index)
2017 $50M Series C
2017 $58M Series D
2019 $100M Series E

Fundraising to date: $234m, Series E

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 660. 50% US, 40% Europe, 10% RoW

GTM: Enterprise sales

Leadership location: COO moved to US after Series A, and CEO after Series B. Entirely US now

Engineering location: Entirely Europe. US engineering centre planned for 2020

Founder location: New York

Founder/CEO: Felix Van de Maele

Built out of Europe (2008-11)

Collibra was building a new category of enterprise software, which required early-adopter customers. They found five early European test customers, including international banks in London, but the founders always knew that the US was the real prize.

Early US Traction (2012-14)

Collibra began to sell remotely into the US, sponsoring conferences and sending over team members to attend. They added 10-12 new clients this way, servicing them remotely.

In 2013, to ramp up US sales, they set up a New York WeWork office, with a team of five. New York was the obvious location, since at the time they were primarily selling into banks.

Co-founders Stijn (COO) and Pieter (Chief Science Officer) relocated, with co-founder Benny (VP sales) also spending 60% of his time there.

The biggest difference in the US is that enterprises see the value of paying more for software. We saw more US traction once we were present in NY, and were able to close our first $1m deal.

Felix van de Maele

CEO & co-founder

Felix, CEO, stayed in Belgium, overseeing engineering & product. He was too immersed in day-to-day product decisions to be able to also move to NY.

The first 10 US hires were AE’s - individual contributors, rather than managers. With hindsight, it was clear that these were mis-hires. The company lacked the capital, or brand-name investors, to give it credibility to hire the talent that was really needed. Furthermore, they found it challenging to evaluate US candidates - something that other European founders have also admitted.

Everyone appears to be amazing. We used to ask candidates how they rated themselves on a scale of 0-10. In Europe people would say between 6 and 8. Iin the US they were giving us 11’s and 12’s!

Felix van de Maele

CEO & co-founder

Commitment and Scaling (2015-17)

In 2015, following an Index-led Series B, Felix moved to NY. He was already in the US 50% of the time, and by this point, he had been able to relinquish his product responsibilities.

Pre-Index, we were pretty much bootstrapped. It was only post-Index that we could properly scale, with the mental shift to create a really big company.

Felix van de Maele

CEO & co-founder

Everything is much more expensive in the US - everything. Salaries, housing, office space, travel. So you need decent fundraising first.

Felix van de Maele

CEO & co-founder

Knowing how to hire effectively in the US was a challenge, as was localising HR policies and practices established in Europe. Hiring a Chief People Officer, Jarlath, in 2016 was extremely valuable. Originally European, he could effectively translate cultural expectations.

The European team used to share hotel rooms at conferences - a practice that was not common for US employees.

Jarlath Doherty

Chief People Officer

Collibra was scaling beyond a level that any of the European leadership had experienced. To prepare for the next growth phase, Felix hired seasoned US global functional executives, including a CFO, CRO, and CMO. All these hires had an international flavour of some kind - having lived in London, run global teams, or worked at European companies.

International outlook or experience is a key criterion for all our exec hires. And these types tend to be attracted to us too.

Jarlath Doherty

Chief People Officer

In 2020 Collibra set up a secondary hub in Atlanta, a much lower-cost location than NY, with strong talent pools across SDRs, customer success, plus marketing and finance ops.

The understanding of SaaS selling, including customer success, is way better in the US. There is still cloud hesitancy in Europe, and more of a licence orientation.

Felix van de Maele

CEO & co-founder

Product & Engineering Leadership (2018-20)

The product function was still entirely located in Belgium, close to engineering. Felix communicated and translated market requirements to this team. But with a 500 person organisation to lead, and a majority of US-based customers, this became unworkable. A Chief Product Officer was hired in the US in 2018. There is now a small but experienced team of customer-facing product managers in the US, to complement the engineering-facing team in Belgium.

It has been important to have product people close to sales, to make sure that what we’re promising is deliverable.

Jarlath Doherty

Chief People Officer

All engineering to-date has been located in Europe (Belgium, Poland and the Czech Republic). However, with a team over 200 strong, Collibra had to search in the US for a CTO with the requisite experience, who will soon also be opening a US engineering centre.

Balancing cultures, levelling and communicating

Making sure that teams across all offices felt valued has been a constant challenge. Poland used to feel secondary to Belgium. Later, with the move of Felix and decision-making to NY, morale in Belgium fell.

The leadership has learnt the importance of being thoughtful in its efforts to level the playing field. They pay careful attention to the locations of all-hands, board meetings, offsites, etc.

Collibra introduced core manager training that included cultural awareness content to create a common internal language and approach. Four day long global employee summits were held each year, in ‘neutral’ locations - Vancouver, Malta, Lisbon, New Orleans - which promoted bonding and unity.

Collibra’s top tips for European founders looking at US expansion:

  1. Make sure you have PMF (product market fit) before you move

  2. You can achieve a lot through travel

  3. Raise a big round before you expand

  4. Have investors that understand the US and can help you scale

  5. Be prepared to make mistakes, but fix them quickly

B2B Anchor

Anchor Archetype
Illustrative journey from Founding to Listing

Archetype AnchorAnchor

Spectacular global success, anchored in Amsterdam

About: Adyen is a global payments company that allows merchants to accept e-commerce, mobile, and point-of-sale payments.

Founded: Amsterdam, 2006

Fundraising: 2011 €16M Series A (index)
2014 $250M Series B
2015 $50M Venture Round

Fundraising up to listing: $316m, Series C

Listing: June 2018, Euronext (Amsterdam)

US as % of TAM: <30% for cross-border payments

US % revenue: 30%

Headcount split: 1,200. 75% Europe, 17% US, 8% RoW

GTM: Enterprise and mid-market sales

Leadership location: Entirely in Amsterdam (except for COO)

Engineering location: Entirely in Amsterdam

Founder location: Amsterdam

Founder/CEO: Pieter van der Does

Starting small with a long term vision (2006-10)

Adyen was founded in Amsterdam in 2006, by a founding team with deep experience in the payments sector. They built an end-to-end payment platform, optimised for a wide range of international payment methods. The company went into hypergrowth early on, resonating particularly with e-commerce clients.

Adyen opened a small office in Boston, in 2008, hiring someone from their network to help with the set-up. Although this was very early from a commercial point of view, it was necessary in order to acquire US regulatory licenses.

European companies understand how to operate in a complex environment (legislation, currencies, etc) early on, so expanding to the US is less of a leap.

Ingo Uytdehaage,

CFO (since 2011)

Commitment: US Leadership (2011-15)

In 2011, following their Index-led Series A fundraise, Adyen realised that they needed to be closer to key US tech players on the West Coast. A small SF office was opened at the end of 2012 - a couple of salespeople with payments experience were hired locally, supported by someone from Adyen’s Amsterdam team. Uber was their first big tech account, with Adyen chosen to process all non-US payments.

They then conducted a search for a heavyweight US president, and in 2014 hired Kamran Zaki, previously global payments lead at both Netflix and PayPal. Kamran’s product and merchant experience made him the perfect fit for the role, and also resonated well with customers and talent. Roelant (employee #15 and CCO) moved to SF for Kamran’s first year, which was critical for helping him to ramp up. After Roelant returned to Amsterdam in 2015, Sam Halse (COO from 2011-19) went to SF in his place. All executives, including Pieter (CEO), made regular visits to the US.

Having a member of our Management Board based in the US continuously from 2014 [Roelant and then Sam], working alongside Kamran, was critical to ensuring our success there.

Ingo Uytdehaage,

CFO (since 2011)

European IPO (2016-18)

Although Adyen had originally planned a NY listing, they found that institutional investors (even from the US) were open to an Amsterdam one. They could see other advantages to listing in Europe - a scarcity of opportunities to invest in tech stocks, and inclusion in the main index, which would not have been the case in NY. It also positioned them next door to their banking regulator. All this shifted their decision towards listing in Amsterdam, and they haven’t looked back. With a market capitalisation in excess of $40bn, Adyen has set a new bar for the ambitions of European B2B tech companies.

More than 50% of the institutional shareholder register is US-based... Adyen proves that if you have a great business, then exchange location doesn’t matter.

Jan Hammer

Index Ventures

Global P&L but leadership in Europe

Adyen operates as a unified company, with a single global P&L. The leadership team sits in Amsterdam with the exception of Kamran, who in 2020 stepped-up from US President to become COO.

As the company has scaled, they have hired and relocated experienced leaders into Amsterdam, from the US and elsewhere. As an international hub where almost everybody speaks English, they haven’t felt disadvantaged in attracting the right calibre of people.

Culture and Collaboration

Adyen prides itself on being a global company, and they never talk about Amsterdam as an HQ. They encourage all employees to travel and move between offices, with an extremely empowering travel policy. T&E is their second biggest cost item, after salaries.

Roles and responsibilities are more fluid than is typical in the US. Working across timezones can create tension and misunderstandings, so Adyen has a core principle of “don’t hide behind email.” They continuously communicate why picking up the phone is so important, which is particularly important for avoiding language miscommunications. Investing in communication tools like Zoom has also made a big difference.

Adyen’s top tips for European founders looking at US expansion:

  1. Start early if you have regulatory barriers to overcome.

  2. Locate yourself close to your key customers.

  3. Hire local leadership, but make sure they are aligned with your long-term vision.

  4. Don’t assume that a US listing is the only, or even the best, way to go.

B2B Pendulum

Pendulum Archetype: Illustrative journey from Founding to Listing

Pendulum Archetype
Illustrative journey from Founding to Listing
Sample size = 47

Archetype PendulumPendulum

Global leadership for a global company

About: Criteo is the global leader in digital performance display advertising, partnering with over 3,000 international advertisers to deliver highly-targeted campaigns.

Founded: Paris, 2006

Fundraising: 2007 €3M Series A
2008 $10M Series B (Index)
2010 $7M Series C
2012 $40M Series D

Fundraising up to listing: $61m, Series D

Listing: September 2013, NASDAQ

US as % of TAM: 50%

US % revenue: 30-50%

Headcount split: 3,100. 62% Europe, 25% US, 13% RoW

GTM: Enterprise and mid-market sales, plus publisher partnerships on supply-side

Leadership location: Distributed across Europe and US, plus EVP Americas

Engineering location: Majority Paris, but also elsewhere in Europe and the US

Founder location Moved to Palo Alto, then to London

Founder/CEO Jean-Baptiste (JB) Rudelle, until 2019, now Chairman

PMF and Growth in Europe (2006-09)

The early years were a struggle, hunting for product/market fit. In 2008, Criteo found its business model, and raised a Series B led by Index. In 2009, revenue grew to €16m and headcount to 70, with mostly French customers, plus a few inroads into the UK and Germany.

At this point, we faced a decision; should we stay concentrated in Europe, or conquer the world - ie the US?

JB Rudelle

Chairman & founder (former CEO)

Ultimately, a decision in favour of US expansion was made, because there was a landgrab opportunity, with no embedded US competitor yet.

US clients favour local players enormously. As an outsider, you need a vastly better product to compete.

JB Rudelle

Chairman & founder (former CEO)

Commitment and teething pains (2009-10)

JB’s research found that European success in the US always involved the founder moving. His co-founders were both technical, so it made most sense for him to relocate, whilst they led the R&D team in Paris. By now, Criteo had strong sales and business development leaders in Europe, so JB felt he was leaving it in safe hands.

The US office was designed to be a commercial subsidiary, with JB’s role to seed the market. But the first 18 months proved extremely difficult.

Managing the US as a European is a complete shock. It took several years for me to understand how they work. You feel so European when you’re out there!

JB Rudelle

Chairman & founder (former CEO)

Criteo had only been able to sign US subsidiaries of their European clients. Closing Zappos proved to be a pivotal moment in changing perceptions.

JB pushed back against the US sales team who were arguing the need for major US product localisation. Being on the ground meant he had the local insight to know that this wasn’t as high a priority as they thought it was, which was critical for staying focused.

US Location and Leadership (2011-14)

The biggest early mistake in the US had been starting on the West Coast rather than the East Coast. This decision had been made for family, rather than for business reasons, and it created extra friction in terms of timezone and travel. Criteo’s US clients ended up being distributed across the US, so there was no advantage to being in Silicon Valley.

I would advise European entrepreneurs against setting up in SV. It is very shiny, but it is much harder.

JB Rudelle

Chairman & founder (former CEO)

I thought one advantage to being on the West Coast was that I could pilot APAC - but in reality, you’re no closer to Asia than you would be in Europe.

JB Rudelle

Chairman & founder (former CEO)

The team started to build across four hubs - Paris, London, Palo Alto, and New York. This was great for tapping into a broad talent pool, but it put a high burden on management time and personal lives.

Despite incredible growth, Criteo were still struggling to hire senior talent in the US, and supplemented with a landing team from Europe.

After closing 2010 with €70m in revenue, Criteo was able to make a transformative hire: Greg Coleman, who joined as US President, from the Huffington Post. He stayed until 2014 and rebuilt the US team, shifting the centre of gravity from Palo Alto to New York.

Greg had a media pedigree that could attract the best people.

Dom Vidal

Index Ventures

The distributed leadership model at Criteo persisted (in fact, through to today). JB was managing six direct reports in four locations. Functional teams (except for engineering) were also distributed. It required extreme trust, because you can’t micro-manage across continents. But despite the challenges, JB feels it could not have been any other way.

If the whole management team had been in Paris, I don’t think we would have been able to hire Greg, and there were certain skill-sets that just didn’t exist in Europe. But having the leadership entirely in NY wouldn’t have worked either - as a European company, the people you are able to hire in the US are lower quality than those you can access in Europe.

JB Rudelle

Chairman & founder (former CEO)

The key to making the distributed model work was having a very clear vision of what needed to be achieved, and being crystal-clear on KPIs. In 2011, Criteo closed on €140m revenues, growing to €270m in 2012.

This pace of scaling with a distributed team was only possible because we were focused on 1 product, which had already achieved great product market fit. At an earlier stage, you need lots of iteration, and later on, you need to diversify.

JB Rudelle

Chairman & founder (former CEO)

The US is now the largest region for Criteo, but revenues are globally spread, including significant contribution from JAPAC.

IPO (2012)

In 2012, Criteo went public on Nasdaq. The primary reason for choosing the US was to be seen as a local player. It opened doors in the US that had been closed before.

Strangely, it was much harder for us to get a CEO meeting in the US than in Japan. In Japan we were doing something different, but the US adtech space was just too noisy.

JB Rudelle

Chairman & founder (former CEO)

JB has continued to move locations, according to the priorities of the company, and his personal preferences. He was in London from 2012-14, then returned to the West Coast, and he is currently based in Barcelona.

Criteo’s top tips for European founders looking at US expansion:

  1. Set up on the East Coast unless you have a very clear reason for being in SF. Time-zone is brutal.

  2. A founder must move over.

  3. Hire the best leadership talent you can, no matter where they are located.

B2B Telescope

Telescope Archetype: Illustrative journey from Founding to Listing

Telescope Archetype
Illustrative journey from Founding to Listing

Archetype TelescopeTelescope

Barcelona base, with strategic partnering in Silicon Valley

About: Typeform helps brands & communities have meaningful conversations through a suite of interfaces where people exchange information in a fun and engaging way, and without the need for a single line of code.

Founded: Barcelona, 2012

Fundraising: 2014 €1.2M Seed
2015 €15M Series A (Index)
2015 $35M Series B

Fundraising to date: $51M, Series B

US as % of TAM: >50%

US % revenue: 40-50%

Headcount split: 289. 79% Spain, 11% US, 10% RoW

GTM: Self-serve mostly, some inside sales

Leadership location: All in Barcelona, except VP Business Development (VPBD)

Engineering location: 72% in Barcelona, 24% Remote, 4% in the US

Founder location: Barcelona

Founder/CEO: CEO: Joaquim Lechà
Co-founders: David Okuniev & Robert Muñoz

Early attempt at US expansion

Typeform, born and based in Barcelona, saw a huge opportunity in the US. From the outset, and through to their US expansion, the US has been their largest market, although less than 50% of revenues or users. In the run up to raising a Series B, the company started forming their expansion plan.

They explored the pros and cons of being in San Francisco, New York, Denver, Austin, Atlanta, and Phoenix. They decided on San Francisco for access to potential partners, and the start-up ecosystem. Typeform sent over a few European employees as a landing team, including their customer success lead. However, there wasn’t a clear objective behind the expansion - supporting US customers, trialling inside sales, or partnering? This became clearer as they made a number of US hires. Typeform regrouped, and has now hired a small team of experienced specialists in the SF office, focusing on product & reseller partnerships, and on developer advocacy around their API offering.

It’s very important to have a general manager who possesses the skills you actually require. You can support culture by sending people from your HQ to the US. But do not optimise for culture first, unless you are creating an office with 50+ people.

Robert Muñoz

Co-founder

Almost all our important partners or potential partners are in the US (eg Mailchimp, WordPress), and many of them are in the Bay Area - Slack, Intercom, Hubspot, Salesforce, etc. Being here gives us credibility and a chance to form deeper, personal relationships with the key people.

Francois Grenier

Head of Tech Partnerships

Renewed US strategy

This new strategy made very clear what the team needed in a US leader, and it was a profile that they neither had in the Barcelona team, nor one that was accessible there.

We have reshaped our strategy to focus on partnerships. We started too wide with the US, trying to build a critical mass there, without realising why we were doing it.

Robert Muñoz

Co-founder

They had the benefit of a very well-known and respected brand, which helped them to hire a seasoned partnerships lead in San Francisco, with previous experience at Hubspot.

Hiring our Global Head of Business Development in the US is proving to be critical. Now, with bigger goals and clearer plans, we are strongly considering having a more full stacked team in the US.

Joaquim Lechà

CEO

Getting meetings with decision-takers in companies we would like to partner with has been easier than we expected.

Joaquim Lechà

CEO

Their US team is about 20 strong, and growing. The SF team is focused on partnerships, resellers, developer advocacy, and product marketing. These are all areas where being in SF is necessary to access the ecosystem, and talent with relevant experience. They have also hired a few engineers, who focus on technical integrations with partners. Customer support also has a number of people in the US, although these are remote, rather than being centralised, or in SF.

Having support coverage in the US has been critical for our success and reputation here.

Nicolas Grenié

Developer Advocate

Typeform’s growth since day one has been powered by growth mechanics and bottom-up adoption, including a high degree of product virality. As the company has matured, it has broadened its product offering. They are now experimenting with selling company-wide licences, and have hired an inside sales leader in SF to lead this effort.

Leadership in Barcelona

The rest of Typeform’s leadership remains in Barcelona. They have been able to relocate experienced talent from elsewhere in Europe and the US, supported by their brand, design ethos, and the attractiveness of Barcelona as a place to live and work.

In Barcelona we do not have that many SaaS experienced professionals who have ‘been there and done that’. Therefore it is necessary to relocate them so that we can learn and scale our business faster.

Joaquim Lechà

CEO

B2B Transplant

Although the Transplant archetype is outside of the scope of this book, it is instructive to explore why founders have chosen it.

Archetype Transplant B2B

European founders who relocated early, and built a global leader in San Francisco

About: Zendesk is a customer service software company.

Founded: Copenhagen, 2007

Fundraising: 2008 500k Seed Round
2009 $6M Series A&B
2010 $19M Series C (Index)
2012 $60M Series D

Fundraising up to listing: $86M, Series D

Listing: May 2014, NYSE

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 4000. 50% US, 24% Europe, 26% RoW

GTM: Mix of enterprise and inside sales, plus self-serve

Leadership location: All US based

Engineering location: Initially all in the US, but now multiple engineering sites (Dublin, Copenhagen, Krakow, Singapore, and Melbourne)

Founder location: San Francisco

Founder/CEO: Mikkel Svane

Expansion to access funding, customers and talent

When Zendesk was founded in a Copenhagen loft in 2007, the startup climate in Europe was very different to today. There was very little infrastructure, and no strong B2B role models. They acquired a small but highly engaged customer base through a self-serve model, which was growing fast. They had no permanent employees at this point.

No Danish lawyer had even seen a venture term sheet back then!

Mikkel Svane

CEO & Founder

The three co-founders Mikkel, Morten (CTO), and Alexander (CPO), tried to raise funding in Europe but were unsuccessful.

Index was the only proper VC in Europe, and you turned us down at Series A!

Mikkel Svane

CEO & Founder

(Yes, we make mistakes, and we try to draw lessons from every one of them)

The US investors they spoke to made it a condition that they move to the US. All three co-founders relocated to Boston, raising a Series A from Charles River Ventures. After they flipped the company to a Delaware topco, Benchmark pre-empted a Series B.

After this fundraise, they moved to San Francisco, to be a part of the local ecosystem, and to access start-up talent.

Silicon Valley has far higher talent quality and density than anywhere else on the planet. Even people who are mediocre here would be considered stars in Europe, across all roles.

Mikkel Svane

CEO & Founder

Taking advantage of European roots

Zendesk capitalised on being a European-born company, celebrating their Danish heritage as part of their brand.

We are not a US company - we have broad international DNA because of our roots. Half of our revenue is outside the US, and the same with our employees.

Mikkel Svane

CEO & Founder

Zendesk was also steadily moving towards larger deals, building teams initially for inside sales, and then enterprise sales. Self-serve acquisition was a smaller proportion of the overall business. Pre-Series D, with a global team of 60 and 2,500 EMEA customers, they hired a VP EMEA based in London, to drive sales expansion.

As their team grew, and the SF engineering talent market got tighter, they opened a Copenhagen engineering centre in 2011, and another in Dublin in 2012.

Zendesk now has almost 1,000 employees across Europe, a quarter of their global workforce.

The Archetypes in B2C

Tech journalists in Europe love to ask “Why don’t we have any tech giants at the scale of Google, Amazon or Alibaba?” Europe is fragmented by language and regulations, and these twin challenges aren’t going to disappear any time soon. They slow down blitzscaling relative to B2C startups in the US or China. Some specific friction points they generate are:

  • Localisation

  • Brand-building

  • Word of mouth marketing

  • Network effects

  • Physical distribution

These same issues conversely create a ‘moat’ against US entrants, and there have been multiple pan-European B2C winners. For example, Just Eat Takeaway, Delivery Hero, Zalando, and Deliveroo. But scale is inevitably limited if you are not operating in the world’s two biggest global markets.

It would have been hard to convince brands, customers and investors that we were a global marketplace if we didn’t have the US.

Andrew Robb

Former COO, Farfetch

However, there are many B2C sectors where Europe has inherent advantages, and in these we have seen the emergence of global tech category leaders:

Music

Sweden offered labels a low-risk laboratory for adapting to streaming (Spotify).

Gambling

US laws were restrictive for domestic startups (Betfair, Fanduel, Bet365).

Luxury

Europe globally dominant for both supply and talent (Farfetch).

Travel

A huge category in Europe, particularly cross-border (Booking.com, Skyscanner).

Gaming

Language much less of an issue, and global distribution through app platforms (King, Supercell, Rovio).

Money transfer

High cross-border charges in Europe made it ripe for disruption (TransferWise, Revolut, WorldRemit).

Telecoms

Expensive international calling across Europe offered consumers huge cost savings (Skype).

Ride sharing

US cultural anxiety about riding with a stranger, relative to Europe (BlaBlaCar).

European B2C founders with global ambitions would be wise to identify and target categories where they can leverage their European home base, versus being held back by it.

Historically, European startups have sold up before they could reach massive scale. Otherwise they have ended up listing in the US. But ambition is increasing year upon year. If built in Europe today, we can be confident that Booking.com would not be sold for $135m (Priceline 2005), or Skype for $2.6bn (eBay 2005).

Another feature of many globally successful European B2C startups is to scale ‘via London’. In effect, these companies have followed a modified ‘Compass’ archetype, establishing GTM and leadership in the UK rather than the US, but with R&D teams based elsewhere in Europe. In many cases, one or more of the founders was based in London from day one (Farfetch, King, Revolut, TransferWise). In others, the centre of gravity shifted over time (Skype, Spotify, Just Eat). This partially reflects the access to customers, talent, and investors that London offers, relative to elsewhere in Europe - although these advantages are narrowing over time, as other major tech hubs emerge across the Continent. But beyond that, the UK offers an attractive test-case ahead of US expansion - English-speaking; closely aligned to the US in terms of culture, and legal framework; physically accessible; but lower-risk in terms of capital requirements for launch.

The UK can be a great on-ramp to test product propositions and branding, before you take on the US.

Danny Rimer

Index Ventures

Marketing talent in London is used to running international campaigns.

Andrew Robb

Former COO, Farfetch

Digital pure-plays, where acquisition and fulfilment don’t require boots on the ground, usually follow the Telescope model, only building a small US team. Businesses which involve physical distribution, such as e-commerce, or with regulatory hurdles, tend to be Anchors; they need to mirror their operating models within the US, with a strong local leader and a multi-functional team. These types of companies are also capital-intensive, so they tend to expand to the US at a later stage of maturity, when they have proven unit economics. If they scale beyond 30% US revenues, pressure develops to evolve from the Anchor archetype to the Pendulum, with leadership distributed across Europe and the US.

As predicted by these archetype journeys, no founders of B2C outliers from Europe have fully relocated to the US - it’s just not an essential requirement for success. Conversely, there are no examples - at least not yet - of successful B2C Compasses, which do require a founder move.

Given the different balance of B2C versus B2B companies falling into the different expansion archetypes, we will present B2C case studies in a different order:

  • Telescope - King
  • Anchor - Farfetch
  • Pendulum - Spotify

Archetype TelescopeTelescope

Built in Europe, closely connected to strategic partners on the West Coast

About: King is an interactive entertainment company creating mobile games including the Candy Crush franchise.

Founded: Stockholm and London, 2003

Fundraising to listing: $9M

Listing: March 2014 on NYSE, then acquired by Activision Blizzard in November 2015 for $5.9bn

US as % of TAM: >50% (for revenue not users)

US % revenue: >50%

Headcount split: 2660. 12% US, 80% Europe, 8% RoW

GTM: Mobile app platforms

Leadership location: Europe (London and Stockholm)

Engineering location: Multiple engineering centres in Europe

Founder location: London through to present

Founder/CEO: Riccardo Zacconi until 2019

Building out of Europe

King was founded in 2003, with product and tech in Sweden, and commercial and marketing based in London. King’s early years were as an online casual gaming portal. They started marketing web based games through distribution partnerships. These would see games embedded with a co-brand in the online properties of their partners. The first partners were in Germany, and in 2005 they signed an exclusive deal for Europe and the US with Yahoo, the largest portal at the time. To manage these distribution partnerships, they first opened an office in Germany, and then in the US. This was in Los Angeles, initially led by a British expat who already knew the King team. By 2006, Yahoo US was their largest distribution partner, and King became their largest partner in games.

In 2009 the business was disrupted by the exponential growth of Facebook; Yahoo games lost 40% of their users in one year. They had to go all-in on cracking Facebook. They put half the development team on reinventing how to bring games to market on the Facebook platform. The other half maintained the existing business and revenues to sustain the company. Reinvention also meant bringing in highly-experienced marketing talent in London in 2010 and in 2011, and closing down the marketing-focused office in Germany.

After two and a half years of experimentation they finally landed their first successful game on Facebook in April 2011, Bubble Saga. With a second Facebook game, Bubble Witch Saga, they learned more about how to monetise and market on Facebook. The game climbed up the rankings to become the largest Facebook game in terms of players within a year. In 2012 they launched Candy Crush Saga, first on Facebook web and later in the year on mobile. As Candy Crush Saga started growing exponentially, they fuelled the growth by massively ramping the marketing, up to $100m investment per quarter. Candy Crush Saga became the world’s top grossing mobile game. From the outset, the US accounted for a majority of revenues and they focused a large part of the marketing budget on the US, including working with US ad agencies for TV commercials.

Stephane was introduced to Riccardo in 2010 by investors, Apax, as a seasoned operator who they knew and respected. He joined just ahead of the release of Bubble Saga.

King tried to keep efficiency high by centralising engineering in Sweden. But as they outgrew the Stockholm talent pool, they opened engineering centres in London and Barcelona in 2013-14. They opened additional gaming studios in Malmo (2011), plus London, Barcelona, and Bucharest (2013-14), and acquired studios in Seattle and Singapore.

Gaming is one of the hardest industries to crack, because it requires a blend of creative, quantitative, and engineering. To get these three constituencies aligned and working for the business is challenging.

Stephane Kurgan

Venture Partner at Index Ventures, and former COO of King (2011-18)

US strategy

King’s primary goal for US expansion in 2013 onwards was to become the most influential content partner to their key distribution platforms - Apple, Google, and Facebook. Rather than Los Angeles, they now needed a small but senior team in the Bay Area, who had close relationships with the tech platforms. In 2014, King was able to hire two platform partnership leads, including the highly respected former Head of Platform relations from Zynga, who built out the remainder of the partnership team.

The only reason for gaming businesses to have local offices is for distribution partnerships - and this doesn’t need large teams. This basically means the US and China.

Stephane Kurgan

Venture Partner at Index Ventures, and former COO of King (2011-18)

Starting in 2013, the CEO and COO would travel to the US for quarterly platform meetings. It took a while to establish this rhythm, but it enabled them to forge close relationships. The discussions allowed a valuable sharing of thinking about platform product roadmaps, based on a raft of data collated by King’s partnership team.

They really appreciated our data, even though we stripped the numbers themselves from our charts. They were interested to learn from us.

Stephane Kurgan

Venture Partner at Index Ventures, and former COO of King (2011-18)

The rest of the business team remained mostly in London, and this worked well. The greater challenge was scaling and managing the technology and studio teams across multiple locations.

The US team increased, including some studio and technical staff, but in total it still remains below 10% of global headcount.

The London advantage

King found it very effective to build out of London, particularly due to the availability of world-class talent in performance marketing, media and advertising. Collaboration between the marketing and product teams was essential when it came to the mechanics of player reactivation and viral growth. This reinforced the decision to keep marketing centralised in Europe, rather than hiring locally in the US.

Most of King’s leadership team was hired from within Europe. The European gaming sector has a strong talent pool, which made this possible. However, as they prepared for an IPO in New York, they found an experienced CFO in the US, who relocated to London.

Archetype AnchorAnchor

Farfetch is the leading global platform for the luxury fashion industry

About: Farfetch is the world’s biggest online marketplace for independent fashion boutiques.

Founded: Stockholm and London, 2003

Fundraising: 2010 $4.5M Series A
2012 $18M Series B (Index)
2013 $20M Series C
2014 $66M Series D
2015 $86M Series E
2016 $110M Series F
2017 $397M Corporate round

Fundraising to listing: $952M

Listing: September 2018, NYSE

US as % of TAM: c.30%

US % revenue: US largest market, but % undisclosed

Headcount split: c.4,500. 5% US, 90% Europe, 5% RoW (estimates via LinkedIn, unverified)

GTM: Primarily online marketplace

Leadership location: London & Porto, plus regional leads including US President

Engineering location: Majority in Porto, but also London and Sao Paolo

Founder location: London through to present

Founder/CEO: José Neves

Started in London and Porto

The company was founded by José in London (where he was living), and Porto (where he was from). Europe dominates in luxury fashion, and José had a rich network from his previous shoe-focused startup. Launching in 2008 during an economic downturn helped, because retailers were under pressure, and were drawn to Farfetch as a route to increase sales.

Farfetch began life with supply from boutiques in five countries, but with customers from across the globe.

We always saw Farfetch as a global marketplace. And the US is ¼ to ⅓ of the global luxury goods sector, so we anticipated it being our largest market.

Andrew Robb

Former COO

Pre-Series A, and with minimal localisation, the US was already the top market. The key was offering curated access to exclusive stock - with good pricing, and ‘good-enough’ logistics. This proved to be enough of a draw for customers, despite hassles with duties and import taxes.

The key is whether you have a strong enough proposition to win.

Andrew Robb

Former COO

Customer acquisition was a mix of affiliates and performance marketing. For branded goods, there was an SEM/SEO focus, and for non-branded, it was more about building the Farfetch brand and social media strategy. London was an excellent base for digital marketing expertise.

Entering the US via a joint venture

Having a physical US presence was deemed strategically critical by José, to avoid US-based copycats from locking them out, and also to secure US boutiques on the supply side.

One of our values is ‘Think Global’. We needed it in our DNA to succeed. This pushed us to go deeper as we scaled.

Andrew Robb

Former COO

Once established, the supply-side is fairly defensible - big luxury brands want to be be seen together with their peers.

Andrew Robb

Former COO

The initial US scaling was done through a joint venture. In 2009 (pre Series A), Farfetch signed a 50/50 JV with Revolve, a $1bn GMV bootstrapped fashion e-commerce business in LA. José found himself seated next to Michael, one of the co-founders of Revolve, at a dinner, and they clicked. José invited him to the Farfetch launch, after which they wrote out terms for a US JV on a napkin. José flew out to LA the following week to sign the deal. Revolve provided logistics and equity funding, and Farfetch provided the supply, brand, and tech. José and Michael jointly banged on the doors of top US boutiques to sign them up.

The hardest thing about the US is finding a good leader - the JV solved that for us.

Andrew Robb

Former COO

Management of the JV was purely driven by José and Andrew - which involved lots of travel, but minimised disruption for the rest of the Farfetch team. Revolve sold their stake steadily as Farfetch scaled (Series B-D), making the JV a win-win.

LA was chosen simply because it was Revolve’s base.

LA’s not a recognised fashion hub but it does have cost-advantages.

Andrew Robb

Former COO

Scaling the Team in Europe

Fashion talent can be largely found in Europe. But as they uplevelled their leadership, Farfetch always ran global searches including the US. The CPO and CMO both relocated from the US.

Farfetch kept almost all development in Portugal. They ramped up recruiting efforts from domestic universities, supplemented in particular by relocating engineers from Brazil. The product team was mostly in London, together with data science.

US Scaling

For the US, the team began to build local leadership, first in Customer Service, and then in Private Clients, in 2014.

It took a certain type of person to fit with our model - someone ok with late-night calls and global travel.

Andrew Robb

Former COO

Originally they had looked for an e-commerce expert to lead the US, but then pivoted to fashion sector expertise, realising that the marketing levers were largely in London.

We revised the hiring spec to match what the US MD had most control over in our case supply.

Andrew Robb

Former COO

In 2016, they hired Jeffery as President USA. He had known Andrew from business school, and had a very international outlook. He was based in New York, and Farfetch used this opportunity to further build their NY presence. His role is to oversee US supply, customer operations, and private client business. So overall 25% of US revenues, and 10% of global supply. This is tough given the matrix structure, as not all levers of control fall under one person. It requires flexibility, trust, and a broader set of metrics than simply US GMV.

NYSE IPO

NY was the obvious choice for Farfetch’s IPO. Research showed that UK retail analysts weren’t as familiar with the marketplace model. Plus the US was more open to growth versus profit, with better liquidity and lower free float requirements.

The cornerstone US institutional investors are all active in Europe, so you can access them. But for the long-tail, which supports liquidity, you need to be in the US.

Andrew Robb

Former COO

There are administrative burdens around compliance and quarterly reporting, but these are outweighed by the advantages. The CFO sits in London with the leadership team - but with a small reporting & IR team in the US.

US travel for investor relations is tough, but we’re in a rhythm now, we just had to develop the muscle.

Andrew Robb

Former COO

Farfetch’s Top tips for US expansion

  1. Be really clear on why you’ve got an edge / strategic advantage - in the US or elsewhere

  2. Expect to make mistakes with your leadership hires. So hire and fire early and quickly - you don’t have many cycles to get it right

  3. Don’t go overboard on early localisation - just do what is absolutely required, and get going

  4. You can run digital marketing globally from London - no local US presence is required

  5. It’s not that hard to set up US operations - you just have to pay the right advisors

Archetype PendulumPendulum

Founded in Sweden, winning in the US and worldwide

About: Spotify is the world’s most popular audio streaming subscription service.

Founded: Stockholm, 2006

Fundraising to listing: $1.1bn

Listing: April 2018, NYSE

US as % of TAM: 50% (Index estimate)

US % revenue: 38% US

Headcount split: 4405. 32% Sweden, 48% US, 20% RoW

GTM: Mobile app platform

Leadership location: New York & Stockholm

Engineering location: Europe & US (multiple engineering centres)

Founder location: Splits time between US and Sweden

Founder/CEO: Daniel Ek

Early ambitions thwarted for US launch

From day one, I was trying to license in the US, but we just couldn’t afford the labels’ fees.

Daniel Ek

CEO & founder

Right at the start, Daniel travelled to the US to negotiate with the labels, but he couldn’t afford the financial guarantees they demanded for a global licensing deal. However, the music labels were facing the threat of P2P file-sharing, and were willing to test out a new strategy for survival. The tech-savvy consumer markets of Sweden and the Nordics were ideal. But even to cover this limited market, Spotify had to provide guarantees that were more than they could afford.

The only reason we are alive today is because we started in a market no-one cared about. In the beginning, we were lucky, rather than it being part of a master strategy.

Daniel Ek

CEO & founder

In the early days, you need to build good product/market fit - and that needs a limited market. In our case, this was a geographic limit. For lots of industries, going global on day one is too capital intensive - you can’t address all use-cases. This isn’t often talked about.

Daniel Ek

CEO & founder

Next, Spotify was able to extend into the UK, France and Spain. It was only four years later that they tackled the US.

Everybody else thought that being global from day one was the only way to launch an internet business.

Daniel Ek

CEO & founder

Via London

London was chosen as the commercial hub - for relationships with record labels (second HQ’s after NY), advertising agencies, and brands, as well as having Europe’s deepest pool of commercial and marketing talent. Stockholm remained the R&D hub.

There’s a benefit to growing in concentric circles. If we hadn’t expanded via London, and had come straight to the US, we’d be dead now.

Daniel Ek

CEO & founder

Going to the US

Spotify made its first US hire in 2010. At this stage, they had proven the streaming model, and labels could see the value of their proposition.

In 2011, they were able to raise $100m, led by Goldman Sachs, making them one of only ten tech unicorns at the time. This was the capital they needed to get the major labels onboard, and launch effectively in the US.

Spotify needed to uplevel the team with local US hires, and selected New York for its hub - for similar reasons to London previously.

In 2012, they launched with a novel distribution mechanic – a Facebook partnership.

Stack up everything you need to give you an advantage in distribution (talent, partnerships, etc) - especially when going after a market as large as the US.

Daniel Ek

CEO & founder

Building the US team

Spotify had been investing in influencers, getting to know talent, and hiring people as consultants for the previous few years, so they were confident about building the team.

Daniel spent a lot of time in the US, and made the first five hires personally. Two big hires were the Chief Content Officer and the US MD. Daniel was introduced to a lawyer from EMI, who he managed to recruit.

Originally, he didn’t want a full time role, but then said this is way too much fun to pass up.

Daniel Ek

CEO & founder

When the US office was 12 people, a 7 person landing team moved over, from Sweden and the UK. These were top commercial performers, who wanted to spread their wings. Two came over as Head of Sales and Head of Marketing, to run the functions for 6-12 months, with the goal to hire successors thereafter.

Understanding the different dynamics across the US was a huge breakthrough. Originally, the team assumed no one in the US would be sharing mobile devices. However, after a fortunate accident, when they enabled multiple accounts on mobile, this ended up becoming a huge growth driver for them, across the midwest in particular.

The US is a continent, not a country. We found that the Midwest had levels of 3G connectivity comparable to Eastern Europe. You haven’t visited the real US if you’ve only been to the coasts.

Daniel Ek

CEO & founder

Founder travel and distributed leadership

Daniel travels extensively, ensuring that no locations feel like satellite offices. He spends 10 days a month in the US, between NY and Silicon Valley. The rest of his time is spent in Europe, mostly in Stockholm.

It’s a multiverse life, and kind of weird. But I believe success for Spotify comes down to my spending time in the US.

Daniel Ek

CEO & founder

Daniel believes that the viral distribution days of B2C are over now, and that above-the-line marketing is essential. This requires deeper time spent in the US, to understand media and consumer behaviour.

As of 2020, Daniel has half his direct reports in the US, and half in Sweden. It has been a long journey but Spotify has gotten to a cadence that works. There is a monthly management meeting in Sweden, and a bimonthly one in the US. Functional teams are now also split between continents, so that it doesn’t matter where the leader is.

It’s been very painful to get here, to be honest. Multiple years.

Daniel Ek

CEO & founder

The organisation relies on decentralised decision making - hiring the best people, and giving them autonomy and accountability, to make the right judgement calls.

Everything comes down to people! The right person in the Sahara will figure out how to sell umbrellas there.

Daniel Ek

CEO & founder

This strategy has paid off, as Spotify has been successfully navigating changing trends, from desktop to mobile, as well as the world’s most formidable line-up of competitors.

When to Expand

Even if you have global ambitions, and the US represents a large percentage of your addressable market, you still need to decide when is the right time to build your US presence.

Our research into European expansions to the US revealed that 59% of startups between 2008-14 expanded to the US pre-Series A. This dropped to just 33% for the cohort from 2015-19. So most European founders are now holding back expansion until after Series A.

Index research: At what stage did US expansion occur?
Index Research. Sample size = 183

Choosing your moment

This will be one of the toughest choices in the life of your company. If you expand too soon, you risk spreading yourself too thin - failing in the US, and losing leadership in Europe. Expand too late, however, and you could have handed US market leadership to a competitor, who is later able to challenge you back in Europe too.

Risk is more about going too late versus going too early. The longer you stay in France (or wherever), the more French speakers you hire, the more French is incorporated in your product…you get calcified.

Martin Mignot

Index Ventures

Remembering which archetype you are can help you to determine the right timeline for US expansion, including your first boots on the ground.

Typical timing for US expansion, for each archetype

Funding Round Series A Series B Series C+
Archetype Compass Telescope Pendulum
Anchor

Compass

The case for going to the US early is compelling. Following Series A, if not before. Don’t get distracted with a pan-European rollout. Although, if you are not in a major European hub, or if you sell into banks or brands, it may still be worth considering expanding ‘via London’ - for example, to prove your enterprise GTM model closer to home.

We used a decision matrix, aiming to be closer to capital, to access a bigger talent pool, to be closer to other key people, to where the PR is, and looking at timezones. We first decided on London, but when we removed the timezone constraint, the decision snapped to San Francisco.

David Helgason

Former CEO & co-founder, Unity Technologies

You need balance between going to the US too early without enough proof points and going when you have built out too many geos and have too much surface area to manage launching another massive new territory and being spread too thin.

Neil Rimer

Index Ventures

Telescope

It is still important to push hard and early for US users and customers. But this is a question of where you focus your product, growth and optimisation efforts. The US percentage in your overall user population should be at least equal to the US percentage in your TAM. And if you operate a freemium model, concentrate on US monetisation, which should be higher than elsewhere. It’s important that you spend a lot of time in the US, learning about user needs, and building partnerships, but you probably won’t need a permanent team on the ground until post Series B.

Anchor & Pendulum

Be more cautious. You don’t want to risk losing leadership in your domestic market, and you may need to decide, for example, between launching in the US, or rolling-out to other major European markets. Even after raising a Series B, giving you deeper pockets, you may still need to choose between pushing for pan-European dominance, or winning a foothold in the US.

However, you should be thoughtful in building a product and an organisation that is primed for US-launch. For example, ensuring that your GTM team (particularly senior hires) includes individuals with significant prior US experience. You will also need to closely monitor competitor activity in the US. Carefully qualify the US opportunity, and prepare a launch plan.

If you are founded in a smaller and non English speaking hub in Europe, it can make sense to build more international coverage before going to the US. This would allow you to get proof of the business, and raise further financing, ahead of the US expansion.

Tackle the big European markets first, before the US (UK, Fr, Ger). Something tells me that this will enable you to see nuances and learnings, and be able to raise the capital required, to go after the US. You will see 10x the competition in the States, and you have to be ready for that.

Daniel Ek

CEO & founder, Spotify

Winning a second European market proves that your product is flexible enough to adapt.

Sofia Dolfe

Index Ventures

UK-specific advice

If you are founded in the UK, the argument for going directly, and earlier, to the US is more compelling than it is for elsewhere. Launching elsewhere in Europe will require translation and localisation beyond what is required for the US.

It’s really hard to have too many geographies early on. Sticking to a US / UK strategy makes sense.

Samir Desai

CEO & co-founder, Funding Circle

Brexit may strengthen the argument for UK startups to expand directly to the US, as EU market access from the UK is eroded, and regulatory regimes diverge.

Dominic Jacquesson

Index Ventures

Delaying Factors

Regardless of your archetype, there are three sets of factors which could limit your ability to consider expansion at a given point in time. By forcing a delay to US expansion, these factors may also nudge your optimal archetype, from Compass to Pendulum, or from Pendulum to Anchor.

i) Localisation & regulation

Certain sectors require minimal localisation for the US market, beyond translation of product and sales & marketing collateral. Mobile gaming, for example, or in B2B, productivity tools (e.g. Typeform). If you are already picking up US users or customers, or at least inbound US leads, you have a market signal that you are close to product/market fit for a US audience.

In our survey of European founders, the US was already the largest single market for 32% of startups before their US expansion, and was in the top three markets for over 60% of them.

How important was the US to your business at the point of expansion?
Index survey of European founders who have expanded to the US. Sample size = 54

However, launching into the US often requires more radical localisation, which stands in the way of acquiring any US customers at all. This is self-evident if you have a physical or service component to your business model (eg local e-commerce). Likewise if you operate in a regulated sector, and need to obtain licences to operate in the US. Regulation in the US may be determined at a federal, state, or local level - or even a combination of these, and approvals can take 12-18 months.

The US isn’t a simple, single market. People flagged this to me, but I didn’t fully appreciate it until I experienced it. Each state has its own regime, and our compliance team had to pitch each one separately, in-person, for regulatory approval.

Joe Cross

Former GM US, TransferWise

For regulated or quasi-regulated sectors healthcare fintech, music (because of labels) - going global from day one is too capital intensive. You could lose a fortune. Start with a ‘wedge’ market, then leverage that advantage. For example, the UK FCA sandbox is a great advantage for fintech startups.

Daniel Ek

CEO & founder, Spotify

Even in unregulated sectors, US customer requirements may be very different from what you’re used to in Europe. The US may require additional product features and functionality - or alterations to existing features. Further, your GTM approach may need to be heavily localised to work in the US. This could be as obvious as a brand name which fails to resonate in the US. Or it could be more subtle, reflecting differences in decision-making by your target US clients.

There is a lot of talk in tech about starting with an inferior product, but in many sectors you cannot do that. For example, you don’t have a viable fintech product without fraud detection.

Daniel Ek

CEO & founder Spotify

ii) Competitive environment

You may have a totally new and innovative product, with no direct competitor in either Europe or the US. This opens up a landgrab opportunity in the US. Alternatively, you may offer a superior product, but need to dislodge incumbents. You could also be faced with (one, or multiple) new entrants, who have already successfully launched. If these competitors are in Europe, you have to decide whether a US expansion risks losing an early lead in your ‘home’ market. If your competitor is from the US, and already growing strongly there, you will have to decide whether to go up against them, and if so, how to differentiate yourself.

The US is much more competitive, and the companies you compete with there are much better, and much better-funded.

Samir Desai

CEO & co-founder, Funding Circle

iii) Human & financial capital

The year after raising a Series A, you may have a team of 50 people, half of whom are focused on product development. On the GTM side, you’ll have a small team. If the two factors discussed above suggest that your path to a successful US launch will be complex, it is unlikely that you’ll have the capacity yet to execute a successful US expansion. It’s better in this case to build bench-strength in your team, optimise your GTM approach, prove your unit economics, and raise your Series B or C with a clear objective of US expansion.

Build a strong foundation in Europe first, so that you have enough cash to expand, or can raise enough at a good valuation; US expansion will take longer, and will be more expensive, than you think.

Dr Gero Decker

CEO & founder, Signavio

Ten steps to qualify the US

If there is still uncertainty around whether, or when, is the right moment for US expansion, this is evidence of a knowledge gap. The solution in this case is to educate yourself through a more rigorous qualification process. This needs to be conducted without distracting you from more immediate priorities. The end-goal is a ‘go / no-go’ decision on whether to expand into the US. In the case of a no-go, you may determine that this is just a matter of timing. You can return focus to pan-European expansion. But the research will have given you a US launch roadmap, ready to pick up once you have a stronger product offer, deeper team expertise, and the necessary financial firepower.

We started too wide with the US, trying to build a critical mass there, without fully grasping why we were doing it. Now we have refocused our strategy to know we are in the US for partnerships. That gives us a clearer idea of what to do, and who to hire.

Robert Muñoz

co-founder, Typeform

We made our US jump when I knew that I could move, without worrying that this would slow down our European business.

JB Rudelle

Chairman & Founder (former CEO), Criteo

Here is our ten-step guide to successful US market qualification:

1. Create a research brief

Develop a 3-4 month US research timetable which will end with a go/no-go decision. Key research elements:

  • Value chain comparison
  • Customer research
  • Competitor research & positioning
  • Product localisation
  • Location recommendation
  • Regulation
  • Operations (legal, financial, HR, IP, subsidiary, etc)
  • Pre- and post-launch timetable
  • Year one budget, and staffing plan

2. Find a researcher

Identify a freelancer or team member to conduct GTM research. They should bring a blend of analytical and GTM experience, and have US insight. They should be US native (or even better, a European expat).

Immerse your researcher in your European HQ for a month. They need to get to know the product, GTM approach and team. They can also spend this time conducting initial desk-research.

3. Assess product readiness

Designate a team member to be responsible for the US product.You will need to be very clear about whether the product is US-ready and what localisation will be required. Can you win competitive pitches? Can you deliver an equivalent NPS score to US vs European customers? Can you retain customers, and be ready to land-and-expand?

Find a niche in the US, and grow from there. Try to select the smallest segment you can. Not the largest. Don’t be tempted to market to everyone. Once you have your niche, talk to as many people in this niche. Show them your product, test it, get feedback and iterate.

Gil Sadis

VP Product, Lemonade

US expansion often means going through the process of finding product/market fit again. It’s rare that no product tweaks are needed.

Ari Helgason

Index Ventures

4. Create a squad and work in sprints

Create a ‘US squad’ with weekly or biweekly targets and updates. The CEO or another exec can champion the project but should not oversee day to day research. The squad should include the lead researcher, plus a representative from each of product, engineering, sales, and marketing.

5. Conduct US research in-market

Have your researcher spend time in the US to gather more insight. They should plan to immerse themselves there for a few months (more effective), else plan a sequence of week-long trips. The founder or other squad members may join for some of the time. Spending this time interfacing with potential customers and partners will allow you to tailor your GTM for the US audience.

America is so big that we needed to re-think our GTM completely. I knew this intellectually, but it took me a long time to really get it.

Peter Holten Mühlmann

CEO & founder, Trustpilot

Leverage your US network for intros. Particularly for connections to target customers. Ask your co-founders, wider team, advisors, investors, suppliers, and existing customers.

Spend a lot of time there to meet people; potential customers, partners, talent, and other founders - to get to know the context really well.

Teun van den Dries

CEO & co-founder, GeoPhy

6. Draw up a budget

You need to allocate sufficient cash to finance your US expansion. This needs to satisfy not only your base case, but also sequenced ‘quadruple-down’ (ie more aggressive than double-down) milestones in case of early success. In other words, be prepared to landgrab in the US, if a window of opportunity opens up.

In enterprise SaaS, where customers often pay upfront for a full year, capital outlay could be lower. But you may choose to follow a beta-strategy with early US customers, whilst building confidence that your product is ready to roll-out. With monthly-billed SaaS, it will take much longer to get to positive cashflow. So your cash outlay will tend to be highest in scenarios where you achieve the most success.

7. Go / No-Go decision

Once you are ready to make this call, convene the CEO, leadership team, and the board. While the CEO’s commitment is the most important, all three must be aligned and supportive.

Define metrics for success.Develop a timeline, with sequenced milestones for decisions to quadruple-down versus withdraw from the US. Milestones should include customer number and revenue goals, at 3, 6, and 12 months, with a commitment to stick to these. Share them with the board, to ensure alignment, and to keep you honest.

8. Prepare your landing team

Each person you select for your landing team needs to combine having an essential core skill-set, plus being a DNA-carrier for your culture. We typically see 2-4 individuals, senior & junior, with a commercial orientation, that may move over a six month timeframe. If you are pursuing a Compass archetype, it is essential that the landing team is led by a founder. For the Pendulum, it is desirable. For the Anchor, it is less important. If lots of localisation is required, it might be good to have a developer join the squad. Clarify with each member of your team whether this will be a “tour of duty” versus a potential permanent move.

Get the US visa application process in motion asap. Plan for 6 months from the process of application to verdict. The less experienced or specialised your landing team members, the harder it may be to get visas, so get your lawyers involved early on, and have contingency plans in case of delays or rejections (see the section on visas in Chapter 8 for more detail).

9. Create your launch plan

Based on your product, competitive positioning, and GTM, you will need to decide on whether to have a big or small launch. If you need minimal localisation, you could go for a soft launch, learning and optimising in iterations. If you need a lot of localisation, it could be worth spending dedicated time beta testing, leading up to a big launch. Assess the importance of referenceable launch partners, and prioritise efforts to acquire them accordingly.

While waiting for visas, conduct frequent US visits to prepare for launch. You can use these trips to support beta customers, and for product testing, identifying office space, and developing marketing collateral.

10. Plan for success

Once you have made a clear commitment to go, make sure you are appropriately resourcing the plan, both financially and with the right people. You are not going to succeed by dipping a toe in the market. If there is massive growth, would you, as CEO, be willing and able to move? And if not you, what is the alternative US leadership plan? This is the reverse of disaster planning!

Testing the waters for US product market fit

About: Spendesk is rethinking the way employees make company purchases, and the way businesses manage all expenses.

Founded: Paris, 2016

Fundraising: 2017 $2.2M Seed
2018 $8M Series A (Index)
2019 $38.4M Series B (Index)

Fundraising to date: €45M, Series B

Headcount split: 190 (100% Europe)

GTM: Inside sales

Leadership location: Europe

Engineering location: Europe

Founder location: Paris

Founder/CEO: Rodolphe Ardant

Ambition and opportunity

Spendesk has a huge opportunity within Europe, already launching beyond France, into Germany and the UK. However, the team also has global ambitions for the business, so they are balancing the pan-European focus, with careful preparation for US expansion.

Index Ventures has worked closely with Spendesk over the last 2 years, helping them to qualify the US market. The Index team in San Francisco made introductions to three specific groups: CEOs and CFOs in mid-market company prospects; CROs in US SaaS companies to learn about recruiting and organisation design; and specialist advisors such as lawyers. Rodolphe made multiple trips to SF to build his US network and insight.

Commercial research hire and onboarding

Spendesk was approached by a Vancouver-based sales professional with relevant sector knowledge, and who had lived in Europe previously. He was excited by the product offering. Rod hired him on a 12 month contract to start researching the US opportunity.

This researcher spent six weeks in Paris HQ, becoming knowledgeable with the product, getting to know people, and embedding himself in the sales team. He conducted desk research on Spendesk’s US competitors (Brex, Divvy and Procurify), and drafted a 12 month US roadmap.

US Squad

A six-person squad was formed, responsible for US expansion. This included Rodolphe, the researcher, and senior individuals from sales, marketing, product/banking, and growth. They worked in two-week sprints, with a weekly status call between the US and Nico, and an alternating biweekly squad call with Rod. This rhythm worked well.

Product Build-Out

Estimating that they would need 12 months to line up the right banking partnerships and infrastructure, a pair of senior individuals from the product and compliance teams got to work, whilst the GTM research was conducted in parallel.

Customer Feedback

The US researcher spent the next few months on the West Coast, conducting 60 discovery calls with target customers, after getting kicked off with introductions from Index Ventures, the Spendesk team, and suppliers. His target persona was CFOs of tech companies or agencies with 50-1,000 headcount. He offered $50 Amazon gift cards to kick off referrals, but ended up needing only five.

He had a serendipitous breakthrough when he was introduced to a CFO who was expecting a sales call rather than a research one. This conversation led to a major insight on how to initially position Spendesk for the US.

Results of Analysis

The US customer research validated that Spendesk could solve the same core problems in the US as in Europe. They would however need to introduce a new US specific persona, with a more targeted initial pain-point and target company demographic.

In terms of location, the team conducted a comparison between NY and SF. They chose SF despite the timezone challenges, because of the higher density of customers in their target segments. SF is also where all potential direct and indirect competitors are based, enabling Spendesk’s proposition to be proof-tested faster. They anticipate a ramp-up of sales capacity in a secondary location, if and when they prove traction.

Plan for Beta Launch

Spendesk had been launched in the UK, so they had already integrated multi-currency, and an English language version. They concluded that their European VAT framework was capable of supporting US state and local tax complexities.

With the US product ready ahead of schedule, the team could focus on the GTM. They identified targets for initial beta customers, and the integrations required. They also identified leadgen, channel, and hiring requirements. The goal of the beta launch was to accelerate the path to learning, with 10-15 non-paying customers.

The proposed landing team included three team members from HQ, covering growth (Jeremy), sales, and a developer. As employee #5, Jeremy could also carry cultural DNA. Their plan was to set up the US, hire locally, and then return to Europe.

Conviction Journey

The company’s focus is to establish market leadership across Europe, which presents an enormous opportunity given the size of the market. There is a small first-year (2020) US revenue target, but nothing beyond that as yet.

Our US expansion is a startup within our startup: learning what the path from $0-10m looks like.

Nico Marchais

Sales & Revenue Director

Spendesk has developed a ‘double down or retreat framework’ including marquee logo milestones. The Spendesk CFO has developed a clear US expansion budget.

The Spendesk board insisted on retaining the company’s core focus on European expansion, but were supportive of setting-up a team on-the-ground to validate the US market opportunity.

Launch

Spendesk have recently launched their US beta. Covid-19 led to only one member of their landing team getting to SF so far. The new US restrictions blocked another of their visa applications. However, two local hires had already been made before the lockdown, in sales and in customer success.

Inbound leads are considered critical to US success, since the market is becoming educated with the segment, largely as a result of competitor marketing. The Index-led Series B has boosted inbound inquiries, including in the US. The team continues to work on product-market fit in the US, figuring out the best target segments and competitive differentiation. Feedback from the first cohort of US users has been very positive.

US network building

Fundamentally, you are best-placed to succeed by starting your company in the place where you have the strongest network and support. Particularly in order to secure critical early hires and investors. It would be a recipe for disaster to move to the US to start your business there, without having first established a strong US network.

As a founding team, if you do already have a strong US network, and your TAM is clearly weighted to the US, then building the company in the US can make a lot of sense from day one, or at least pre-seed. It is better in this situation for the entire founding team to move over, following our Transplant archetype.

If your TAM is weighted to the US, but you do not have a US network, applying to Y Combinator is a good route to go, or one of the other top accelerator programs in the Bay Area, such as South Park Commons or Heavybit.

An accelerator can be a great tool to quickly build a strong network of other founders, talent, and potential customers in the US, even if your plans to enter the US market are much further down the road.

Nina Achadjian

Index Ventures

YC was launched in 2005, and over 2,000 startups have graduated through the programme to-date. Several major European success stories are YC alumni, including Stripe (Irish founders, but built in US), Front (Paris, Series B led by Sequoia, 180 headcount), Algolia (Paris, Series B led by Accel, 250 headcount), Duffel (London, Series B led by Index, 40 headcount), and GoCardless (London, Series D led by Accel, 350 headcount). More recent examples include Slite, FatLlama, MessageBird, and Station. In addition to helping European founders with refining their product offering, YC offers access to its alumni, and a deep network of advisors, investors, and talent.

I recommend YC to European founders - it’s a valuation-driver and a few hours with a YC partner can fundamentally change your perspective.

Christophe Pasquier

CEO & founder, Slite

Participation at Y Combinator by nationality

Israeli playbook

With a very limited domestic market, Israeli start-ups have learnt to pivot to the US from the outset. With an ecosystem particularly strong in enterprise software, these companies almost always follow the Compass archetype.

The Startup Nation goes to America

By Gil Dibner, General Partner & Anne Blum, Head of Platform

Angular Ventures is an early-stage VC fund focused on backing European and Israeli enterprise and deep-tech founders as they build global category leaders.

Over the past three decades, Israel has emerged as a global tech powerhouse – the ‘Startup Nation’. Today, Israel sees more startups per capita (1 startup per 1,400 people), more venture capital invested per capita ($745, double that of the US and 4.5x times that of the UK) than any other place on earth. It also benefits from more foreign R&D centers (over 100 R&D centers from companies ranging from Intel to McDonalds), more absolute VC dollars invested by year ($8.3b in 2019), and more exits per year ($9.9b in 2019) than nearly any other country.

More qualitatively, Israeli entrepreneurs gave rise to the disk-on-chip (M-systems), user-generated maps (Waze), the gig economy (Fiverr), and self-service web design (Wix), as well as playing pivotal roles in key sectors such as developer tooling (JFrog), data analytics (SiSense), marketing analytics (Datorama), and security (Aqua Security). The story of how a small country of 8 million became so important in the global tech ecosystem is well documented. Our focus here is on lessons from the Israeli experience; how to build and scale global tech companies, starting from what is, in many senses, the ‘wrong’ place.

Research into Israeli enterprise tech expansion

We conducted a survey of Israeli founders and C-level executives. The 33 startups included have raised $91m on average, $2.9bn combined, and all have significant sales or operations in the US. Eight of these companies have already exited, for a combined exit value of over $2.8bn. The insights below combine our 15 years of experience in investing in early-stage Israeli enterprise tech companies, enriched by this unique survey data, and highlighted by more detailed founder interviews.

Starting global

With a small domestic market, Israeli entrepreneurs have always been motivated to ‘go global from day one’. For 87% of the companies surveyed, the US was their largest market from inception. This contrasts with just 32% of European survey respondents polled in parallel by Index.

If you’re trying to build a billion-dollar company, if you look at statistics, there are a lot more being built in the US because of the size of the market the expertise, and the funding - than in Israel or in Europe.

Doron Gordon

Founder & CEO, Samanage

Early, early, early

Over and over again, as we spoke with founders who have made this move, we heard versions of the same wisdom - you cannot start focusing on the US too early. For an enterprise startup focused on a global opportunity, the US needs to figure into your thinking as early as practicable.

83% confirmed that US expansion led to a drastic acceleration of sales

40% believe that their US expansion significantly eased their fundraising process

73% of startups that raised $1-5m before moving to the US believe that the move dramatically improved their fundraising process – suggesting even greater benefits from moving prior to Series A fundraising

Nowadays there is always a way to get your first American customer without opening a US office. [But] without opening a US office you’ll get stuck and just can’t grow. So it’s important to have a US office, although you can wait until you have some revenue and customers.

Fred Simon

Co-Founder & Chief Architect, JFrog

We didn’t go to the US from day one because we didn’t understand the need, the impact. We lost a few deals to US competitors who were available, whilst we were always on the plane. We were scared of the adventure, the expenses, the mindset. But it has become so clear to me that if you are targeting B2B markets or larger enterprises, you have to have a strong representative in the US.

Omer Gotlieb

Co-Founder & SVP of Business Development, Totango

If you’re working on enterprise software, your customers need to see you in person. Once you start to spend a quarter of your time in the US, then you know it’s time to move, it may actually already be a bit too late.

Fred Simon

Co-Founder & Chief Architect, JFrog

Distribution of Leadership

The great majority of Israeli founders surveyed (69%) believe that founders need to relocate to the US office for the expansion to be successful. And for just over half the respondents, the first US-based team member was a founder. For the startups we surveyed, most of the GTM team was based in the US: 63% of CEOs, 60% of CMOs, and 86% of CROs. By contrast, most of these companies kept engineering, product, and finance back in Israel. 91% of CTO’s were based in Israel, together with 66% of CPOs, and 57% of CFOs.

Essential but not easy

Moving to the US is not without its challenges. One interesting theme from speaking to founders was that these challenges were minimised if the transition was made after the company raised $1-5m. It was harder if the company had either raised less (ie was younger), or more (ie was larger and more complex). This was an unexpected result. Our hypothesis is that when a company is very young, it is under-resourced; adding multiple offices, jetlag, expenses, and timezones can add a ton of stress to an already overworked team. But when a company is larger and more complex, the inevitable dislocations caused by some senior management moving countries can create complex management challenges, as teams re-adjust to the new setup, divide responsibilities, and find new ways to coordinate tasks.

US expansion's impact on difficulty managing the company by funding amount raised prior US expansion
US expansion's impact on difficulty managing the company by funding amount raised prior US expansion

Managing culture whilst expanding to the US is another major challenge that Israeli founders flagged.

Many people warned us that the first people we recruited in the US were all going to be failures. And they were right. It’s hard to find people who have the right DNA. With our first hires, the expectations on both sides were misunderstood and we hadn’t yet learned how to effectively work through different cultures.

Fred Simon

Co-Founder & Chief Architect, JFrog

With every new employee, when I meet them I warn them, ‘listen, you will sometimes see [my co-founder] and I go into a room, close the door, and start yelling at each other - that’s just how we talk, that’s Israeli culture!’.

Omer Gotlieb

Co-Founder & SVP of Business Development at Totango

Where to set up

Despite the shift towards fully-remote teams and multi-hub models, you are still likely to establish a primary US hub. This is where you choose to plant your flag, with your landing team and initial hires, even if your team build-out ends up being more dispersed.

Our analysis of European companies that have expanded to the US revealed three clear winners when it came to choice of US hub - New York, the Bay Area, and Boston.

Where do European startups establish their US hub?
Index Research. Sample size = 186

New York is increasingly the first choice, representing 44% of US hubs over the last five years. San Francisco has become less popular, but still accounts for 28%. Boston hosts another 11%. The remaining 17% is highly dispersed, with only Los Angeles appearing to be gaining some specific momentum.

When specifically looking at outlier success stories, 43% have US hubs in the Bay Area, with 34% in New York and 9% in Boston. Since outliers tend to be older, more mature companies, this mainly reflects the historical landscape, before New York’s rise to prominence.

Decision matrix

The following factors should drive the decision where to base your US hub, ranked in order of importance:

1

Customers & Partners

Where are your existing, and potential, customers?

2

Sector

Tech is focused in the Bay Area, whilst finance and media are in New York, for example

3

Timezone

East Coast (Boston, New York) gives you 3 more hours of working-day overlap versus the West Coast

4

Talent

What is the availability of GTM hires you need – inside sales, enterprise sales, partnerships, growth? Where will you find executives with proven scaling experience for your business model and sector?

5

Cost

Salary and rents are extremely high in New York, and even higher in the Bay Area. Using cost as a proxy for talent retention makes this even more critical

6

Personal & Investor network

If you know a trusted and credible US leader, this can potentially sway the decision of where to land

Often the decision of where to locate will be obvious - in fact, only 30% of the European founders we surveyed said that it was a difficult choice for them.

Following your customers is a good tenet, but qualify this with not only where your current customers are - but where your future audience is likely to be.

There are two types of customers. First, those that help you build your product. Second, the ones you are going to actually sell to.

Hannah Seal

Index Ventures

We began in Boston because we knew someone who we hired there. Then we realised most of our target customers were on the West Coast, so we moved our US centre of gravity to San Francisco.

Ingo Uytdehaage

CFO, Adyen

Some companies realise that their addressable market is spread across the entire US, even if their early adopters are in a specific region or sector. This is often the case with consumer propositions, or in horizontal SaaS. In this case, you may switch to availability of talent as your primary driver of where to locate.

The maxim, go where your customers are, and will likely be, still holds true. If they are everywhere, then go to where it is easy to create a sales base, or create distributed teams in locations where it is easy to hire from other companies with relevant experience.

Abakar Saidov

CEO & co-founder, Beamery

When it comes to experienced executive-level talent, critical mass only exists in the three hubs mentioned earlier. For SaaS roles - including VP Sales, CRO, CMO or CFO, approximately 60% are to be found in the San Francisco Bay Area, with 15% in each of New York and Greater Boston. The remaining 10% are spread elsewhere. For B2C executives, the split is different - approximately 60% in the San Francisco Bay Area, 25% in New York, and 15% elsewhere.

SF, NY, and Boston all have a high concentration of talent, especially executives. If you are choosing a different metro hub you better have a good reason why.

Erik Kriessmann

Index Ventures

If I were rating the concentration of B2B leadership talent, the Bay Area is a 10, New York is a 7, and Boston is a 5.

Mannie Gill

Renovata Partners

San Francisco

As the beating heart of the tech sector, Silicon Valley would appear to be the obvious destination for any tech company looking to succeed in the US. Early-adopting customers (consumers, startups and corporates), pivotal distribution and product partners, the most seasoned talent pool when it comes to successful scaling, and a roll-call of the most successful VC funds.

There is a gravity to the Bay area, an underground infrastructure - by being there, you are plugged into what’s happening, and what is on the horizon. You can’t get this anywhere else. There’s also a feeling of closeness and community in the people you are interacting with.

David Helgason

Former CEO & co-founder, Unity Technologies

There is still magic in the SF bay area. Take Gitlab, for instance. A fantastic growth company, 100% distributed. Their CEO chose to move from the Netherlands to San Francisco.

Mårten Mickos

Former CEO, MySQL

The biggest draw of SV is intangible. Before each trip, I ask myself if it’s really necessary. But afterwards, I find it has been so valuable for customers prospects, and investors. As well as for expert insights around product, growth, and marketing. I sum it up in one word - serendipity.

Christophe Pasquier

CEO & co-founder, Slite

Of course, it’s not that straightforward. There are two major reasons why the San Francisco Bay Area is losing ground nowadays as a US hub for European startups.

The first is timezone. With a 9 hour time difference between Continental Europe and the West Coast, the overlap during working hours is minimal. This barrier to effective team communication and collaboration cannot be underestimated. The additional 3 hour window from the East Coast is very significant. Add to this the increased flight times and jet-lag for the West Coast, which will take their toll when you’re making the trip every month or two.

Only go to SF if you are selling to customers based in SF. The time difference is huge, making the East Coast a lot easier for a US beachhead.

Abakar Saidov

CEO & co-founder, Beamery

The second is talent attraction and retention - the Bay Area is hyper-competitive when it comes to talent. As a European company, you already start at a disadvantage in terms of brand awareness and credibility. What applies to talent attraction is even more brutal when it comes to talent retention - employee turnover is higher there than anywhere else in the US (average 30%, compared to 20% elsewhere in the US, and 10-15% in Europe), as are expectations in terms of compensation, benefits, and sustained hypergrowth. You need to be realistic about whether you will be able to hire and retain A-players, as an outsider in the world’s most competitive talent ecosystem.

In SF everyone feels underpaid, all the time. However, how do you quantify the benefits of being embedded in the local ecosystem where your competitors are?

Anonymous European founder

In practice, we therefore only recommend San Francisco as your US hub if you are selling primarily to (or through) tech companies, or to developers. For example, infrastructure, data/analytics, or open source software require a focus on DevRel (developer relations), have highly technical sales processes, and require partnerships or integrations with other software platforms. Alternatively, if you are a consumer app dependent upon distribution through the Apple, Android, or Facebook ecosystems, the need to be in Silicon Valley is also compelling.

If you don’t fall into either of these categories, we advise against choosing San Francisco as your hub. And even if you do, be prepared to establish a secondary hub as you scale, for building more operational rather than strategic teams.

Developer tech is best done in the Valley, everything else can be done as well or better elsewhere.

Ari Helgason

Index Ventures

New York

The New York tech ecosystem is expanding rapidly, driven by the natural strengths of the city: Its appeal as a place to live and work particularly for younger talent; excellent universities; and global leadership in financial services, media and fashion. Its earlier strengths in consumer tech (Tumblr, Etsy, Warby Parker, Glossier, ClassPass) are now being balanced out in B2B and SaaS (MongoDB, Datadog, Invision, Squarespace, Braze).

Reasons for choosing New York as US hub
Index survey of European founders who have expanded to the US. Sample size = 50

If you are in a sector reflective of New York’s strengths, it is the obvious choice for your US hub. And for many enterprise SaaS companies, financial services represents their single most important customer sector. On the consumer side too, New York (together with Los Angeles) is the largest, wealthiest, and most influential US city.

New York as a city would be the 2nd largest fashion country globally.

Andrew Robb

Former COO, Farfetch

It is now possible to build entire GTM teams in New York, with CMOs and marketing talent particularly strong, given the city’s heritage. You need to be open to step-up candidates on the sales side, given the relative immaturity of this talent pool, and high demand.

Boston currently has still got a deeper talent pool for SaaS execs, but this is shifting steadily to New York, where there are more early-stage SaaS companies, and emerging leaders for the future… but be warned that whilst this pool is emerging faster in NY, it is also in higher demand due to the growth of the local B2B ecosystem.

David Ives

True Search

Interestingly, our research uncovered that startups born in London are particularly likely to choose New York as their US hub (52%), compared to startups from elsewhere in Europe (34%). This partially reflects sectors, with more fintech and adtech in London, but it also appears to be a cultural choice.

London is New York’s twin.

Hannah Seal

Index Ventures

Boston

Boston is a viable third option for your US hub if you are B2B, with the long-standing success of the Highway 128 tech corridor, plus world-class research universities and a heritage in life sciences. Notable Boston B2B and SaaS success stories include Akimai, Mimecast, Hubspot, Brightcove, Datarobot, Fuze, BlueConic, Toast, and Salsify.

Highway 128 is the Silicon Valley of the East. Boston is a college town that feeds this. New York isn’t. It is focused on finance, media, fashion.

Mary Beth Vassallo

VP North America Sales, Nexthink

In lifestyle terms too, particularly for families, it compares favourably against New York, with shorter commute times, and access to nature.

Boston is a city where you can have a normalised family life, which is critical as a founder giving so much time to your business. You can commute in 30m, and have a good lifestyle. Your money won’t go far in NY or SF.

Peter Bauer

CEO & co-founder, Mimecast

You face a difficult choice between locating yourself downtown in the city - where you’ll find many of the younger startups - or in the Western suburbs, home to the more mature tech companies. This situation mirrors, but trails, the evolution of the Bay Area, with the rise of San Francisco as a startup city, in contrast to the campuses of the tech giants along highway 101 to the South.

I’d caution against setting up downtown. It’s appealing for junior hires, but most of
the experienced talent is to the West, and they don’t want to commute.

Peter Bauer

CEO & co-founder

Secondary hubs

As your US footprint grows, it often makes sense to establish a secondary hub in a lower-cost location for your support functions. Typically these might include SDRs, inside sales, customer support, and operations (billing, compliance checking, etc). This has become part of the playbook for domestic US startups in recent years too, and a large number of secondary cities have emerged as potential destinations.

European startups will be particularly focused on nationwide office-hours coverage for sales and support functions, so tend to cluster in cities on Central and Mountain Time. Another significant factor specific to European startups is the availability of direct (or at least straightforward) flights to their European base, as well as within the US itself.

We have had a lot of success hiring outside of SF in hubs like Austin, New Jersey, Chicago and Phoenix with advantages ranging from cost, to talent retention, to time difference with London.

Abakar Saidov

CEO & co-founder, Beamery

Our analysis of secondary US hubs chosen by European startups highlighted Denver, Austin, Atlanta, and Tampa.

Selection of Secondary Hubs in the US

City, State US-born secondary hub European-born secondary hub

Denver, CO

Robinhood, Slack, Datadog, Freshworks, StackOverflow

Trustpilot, MOO, Funding Circle

Austin, TX

MongoDB, Airtable, Miro, Restaurant365

UiPath, Unity, Blue Prism, Darktrace, Beamery

Atlanta, GA

Square, New Relic, PagerDuty

Collibra, Algolia, Alfresco

Tampa, FL

Drift, Asure

TransferWise, TeamViewer, Scytl

Phoenix, AZ

Prosper, Opendoor, Oscar Health

Lemonade

Raleigh-Durham, NC

Indigo, View

Celonis

Dallas/Fort Worth, TX

Splunk, Blue Apron, Peloton

HelloFresh

Columbus, OH

Quest Software

Klarna

Nashville, TN

Warby Parker, Lyft, Eventbrite, Houzz

Opening a secondary hub can carry more risk the earlier it is done, since it extends multi-office challenges around communication, culture, and management. However, this needs to be offset against the challenge and cost of hiring and, in particular, retaining large, often junior and lower-paid teams. This can be brutal in New York or San Francisco, although somewhat easier in Boston, where cost and talent-competition aren’t quite as intense.

In (secondary hubs), people think ‘this is a great place to work’ and are happy. In SF, people are more like ‘where is my barista?’ It’s much harder to retain people.

Anonymous European founder

The precise trade-off in timing will vary, driven in particular by your team’s functional make-up. If your model is support- and ops- intensive from the start, a secondary hub is likely to make sense sooner. Over time, the secondary hub may well become your largest single US location. Whilst these cities can be strong on junior and mid-level talent in certain functions, they will be weaker when it comes to marketing or business development, and it is very unlikely that they can provide you with executive-level leadership. So you will have a continued need for a primary hub in one of the three core cities.

Buyers don’t care where in the US you are, so long as you have presence and a story.

Joel Passen

Former Head of Global Sales, Beamery

Fully Remote Teams

Fully remote organisational models have been growing steadily more popular with founders, even before the Covid-19 pandemic. At Index, we are fully supportive of remote-first teams, having seen them successfully scale first-hand at Elastic and MySQL, and more recently at Slite, Remote, Peanut, and others. The topic is worthy of its own dedicated guidebook, but for the purposes of US expansion, there are a couple of specific points to highlight:

Certain functions lend themselves more easily to remote than others. Enterprise sales are by nature remote. In fact, you want to pursue a distributed coverage model with reps across the US. Customer support and success also often follows this approach. Inside sales and SDR functions can be trickier, since these are often more junior hires who need intensive mentoring, and where ‘buzz on the sales floor’ can be highly motivating.

Sales leadership is hard to find in secondary hubs. But unless you’re building high-velocity sales, you don’t need a heavyweight sales leader in an office - enterprise reps are in the field most of the time.

Joel Passen

Former Head of Global Sales, Beamery

Community-building and partnering is about networking and ‘being there’. If you want to partner with Google or engage with cutting-edge developers, your DevRel team needs to be in the Bay Area. If you need to immerse yourself in the media ecosystem, you need to be in NY. This may dictate the location of certain roles, even if you operate a fully-remote model with no offices.

Archetype CompassCompass

US expansion through San Francisco

About: Algolia allow teams to easily develop tailored, fast search and discovery experiences.

Founded: Paris, 2012 YC cohort Winter 2014

Fundraising: 2013 $1.5M Seed
2014 $1.3M Seed
2014 YC W14 cohort
2015 $18.3M Series A
2017 $53M Series B
2019 $110M Series C

Fundraising to date: $184m, Series C

US as % of TAM: >50%

US % revenue: c.50%

Headcount split: 350. 63% Paris, 35% US, 2% RoW

GTM: Self-serve, inside sales, field sales

Leadership location: All in SF except CTO

Founder location: San Francisco

Founder/CEO: Nicolas Dessaigne (until July 2020)

US exposure via Y Combinator

Algolia participated in Y Combinator in the Winter of 2014, after they had raised a seed round, which included participation from Index.

We hesitated since we were already seed-funded, so dilution was significant. But going through YC was critical to our success.

Nicolas Dessaigne

Former CEO & co-founder

The team already had six people in Paris, and post YC they debated moving everyone to SF. However, since one of the co-founders was expecting a child, and splitting the team was ruled out, they decided to all return to Paris.

If I were graduating from YC now, it would be a close call whether to stay or return. It’s trading off easier access to customers in SF versus easier access to talent in Paris.

Nicolas Dessaigne

Former CEO & co-founder

Flipping to a US topco was a requirement of joining YC. There was a tax hit, and it meant we couldn’t use BSPCE’s [French stock options], but overall probably was a good thing to do.

Nicolas Dessaigne

Former CEO & co-founder

Rationale for expansion

Algolia expanded to the US with the priorities of getting more customers, attracting the right strategic partners, and securing investors. However, the quality of talent they were able to access through this move has proven more important than they expected.

We have come to appreciate that for executives, the top calibre candidates are almost all in Silicon Valley.

Nicolas Dessaigne

Former CEO & co-founder

Founder move

Despite returning to Paris after YC, Nicolas had already committed to moving back to SF in 2015, during the Summer school holidays (he already had three children).

I didn’t hesitate. And in the mean time, I travelled to the US a lot - I acted as if I was already here, and developed muscle for working at a distance.

Nicolas Dessaigne

Former CEO & co-founder

Momentum won’t come as fast if you’re not here. You’ve got to show that you’re committed, to talent and to partners.

Nicolas Dessaigne

Former CEO & co-founder

Where to set up

At the time of expansion, the US was roughly 50% of Algolia’s revenues, and the team was 20 strong in Paris. Nicolas moved to San Francisco. This was the clear choice over NY, given that Algolia is an API business that needs strong advocacy in the developer ecosystem, as well as technology integrations.

If you don’t need to be in SV, go to NY. We picked SF for the ecosystem, because we’re an API business. But the timezone is VERY tough. On the other hand, SF is better for kids, and the outdoors.

Nicolas Dessaigne

Former CEO & co-founder

Hiring in US

Algolia’s first hire was in sales, and they quickly realised that it was very challenging for Europeans to assess American candidates.

Why would an A player take a job with a European startup?

Nicolas Dessaigne

Former CEO & co-founder

You’ve either got to be super-lucky, or you’re going to mis-hire. We [Europeans] don’t know how to hire Americans, and you’ve got to develop pattern recognition. That happens much faster when you [the founder] are embedded here.

Nicolas Dessaigne

Former CEO & co-founder

With the exception of the CTO (in Paris), the leadership team is now all in SF - CEO, CRO, CMO, CFO, and Chief People Officer.

Product

Algolia found that France didn’t have the same quality of product talent as SF, so they hired product managers (both junior and senior) in SF. However, it proved to be too challenging to have the product function in a different continent from engineering. Instead, they found a good PM in France, who travelled a lot to the US; and they relocated a senior product leader from SF to Paris, who was a French expat.

Secondary US hub

In 2017, they opened an Atlanta office. This was serendipitous, as one of their early sales hires (an American living in Paris) wanted to return home there. Now the office is growing strongly for inside sales, alongside SF and Paris. Enterprise sales teams are in SF, NY, London, and Paris.

Culture & Communications

Communication across time zones has become more and more challenging over time. In the very early days the team used Aircall to do sales calls from Paris 24/7, pretending they were in the US. However, this quickly became untenable.

Once the team expanded to the US, they had to hire managers quickly, to support teams split with a 9 hour time difference.

Managers can handle 8 direct reports if they’re in a single office, but we’ve learnt the maximum is 5 when the team is split between the West Coast and Europe.

Nicolas Dessaigne

Former CEO & co-founder

The team in SF gets in early, and the team in Paris stays late, so they can communicate with each other. But they just do it - you can’t demand it from people.

Nicolas Dessaigne

Former CEO & co-founder

In order to keep decision making streamlined, there is a daily 10 minute stand-up for executives, and quarterly strategy offsites (before board meetings), which alternate between SF and Paris. The exec team stays together in an AirBnB, which helps with bonding.

All-hands are still held every week, 0830 PT / 1730 CET, and until recently (when the expense got too much), everyone was encouraged to travel between SF and Paris once a year, for an average of 2 weeks.

Before Covid hit and they adjusted their approach, Algolia had two corporate apartments in SF, and one in Paris, to accommodate people flying back and forth.

While this began for practical and cost reasons, it had the benefit of forging close bonds between the colleagues who shared apartments. It mixed up functions and offices, including execs, which had a huge impact.

We only speak English, including in Paris. It’s always a fight, even now. But it’s super-important.

Nicolas Dessaigne

Former CEO & co-founder

Algolia’s advice for European founders

  1. Try it first, by travelling to the US often

  2. Expect to mis-hire initially

  3. Comms across time zones has been harder than expected

  4. But becoming part of the SV ecosystem has been easier

Archetype AnchorAnchor

Setting up from day one with hubs in both NY and Florida

About: TransferWise is building the best way for people and businesses to move money around the world.

Founded: London and Tallinn, 2011

Fundraising: 2011 $50k Seed
2012 $1.3M Seed (Index & IA ventures)
2013 $6M Series A
2014 $25M Series B
2015 $58M Series C
2016 $26M Series D
2017 $280M Series E

Fundraising to date: $396m, Series E

US as % of TAM: 20-50%

US % revenue: 25%

Headcount split: 2,200. 15% US, 65% Europe, 20% RoW

GTM: Primarily mobile app platforms

Leadership location: Europe (London & Tallinn)

Engineering location: Mostly Europe – Tallinn, London, Budapest. Also New York & Singapore

Founder location: London

Founder/CEO: Kristo Käärmann & Taavet Hinrikus

Context for US expansion

Kristo and Taavet knew from the outset that the US was the single biggest market for cross-currency payments. Roger Ehrenberg from IA ventures, one of their earliest investors, was also based in NY.

The company had already built coverage across the EU (both Eurozone and non-Eurozone) as well as Norway and Switzerland. However, they knew the US would be different – to meet the scale of the opportunity, they’d need to build a dedicated, full-stack, local team.

Regulation

Allowing customers to send money to a country is the less complex side of the equation in money transfer and TransferWise had this live for the US in early 2014, as an MVP. Enabling customers to move money out is much harder, and involves navigating a far tougher regulatory environment.

In December 2014, following their $25m Series B led by Valar Ventures (NY based fund), TransferWise launched this service, leveraging US licensing [JC5] partners to enable speed to market. It worked but there were challenges, such as when a certain US state’s regulator wasn’t happy with the process used by TransferWise’s banking partner. They had to move quickly to set up a replacement.

Operating from Europe and using partners in the US was challenging. But it gave us the speed we needed to help serve our customers far earlier than we otherwise would have been able to.

Joe Cross

Initial GM USA

Securing their own licenses took nearly 2 more years. Although users would hardly notice the change at first, it was a major back-end logistical challenge. US regulators required locally-based TransferWise employees, and each state had its own regime.

Our compliance team had to do a roadshow to loads of states, pitching them for regulatory approval. It made me realise that the US really isn’t a simple, single market. In the EU, fintech businesses like ours only require a single license to operate across the whole bloc.

Joe Cross

Initial GM USA

I had to get my fingerprints taken 50 times in a police office in downtown NY, so that all states could verify my identity.

Joe Cross

Initial GM USA

Launch team

Setting up the US involved a trade-off between local knowledge (US hire) and culture fit (transplant from Europe). The leadership thought hard about it, and decided to send a landing team for culture fit, who could then hire for local knowledge.

Joe Cross, head of marketing, and employee #12 at TransferWise,led the landing team as GM, and moved to New York in January 2015 together with Henrik, who led the product element of the team. In parallel, the head of customer support moved from Tallinn (Estonia) to Tampa (Florida), to build a local CS team.

I felt like I was stretching the org to America, hiring the specialist people who needed to be there.

Joe Cross

Initial GM USA

US Locations - New York and Tampa

NY was the obvious choice as the hub, given the fintech angle, plus timezone. It has a rich and deep immigrant history and is full of international communities, who are TransferWise’s core demographics. Initially they focused on expat networks of Brits, Europeans, and Australians. Whilst the Latam opportunity in the US was bigger, the company wasn’t live there yet.

Tampa proved to be a great choice for support and payment operations, with many universities, and several corporates running ops centres. This provided a large talent pool. The larger portion of the US team is now there. It was also a great location to service Latam, given the large community of Spanish speakers. The mayor of Tampa was extremely helpful. The TransferWise office is in an old cigar factory, and they held a launch event just as Donald trump was coming into office. The Democratic Mayor opened the site, exclaiming how happy Cuban factory workers would have been about this immigrant-supporting company.

US Tech

Originally there was a product and engineering team in Tallinn focused on US and Americas localisation. But over time, it became clear that the US needed its own local tech team. Some engineers relocated to NY, and there have now been many local hires too.

They had a US flag above their desk in Tallinn, and one team member played weekly renditions of the Star Spangled Banner on the guitar!

Joe Cross

Initial GM USA

There was a lot of stuff we needed the central team to do, and it wasn’t always clear to them why we needed it.

Joe Cross

Initial GM USA

Culture

The US team found it easy to get behind TransferWise US, but harder to feel allegiance to the global brand.

We wanted TransferWise to be a distributed global team, one team with a unifying mission. This is so much more powerful than individual country units.

Joe Cross

Initial GM USA

When Joe returned to the UK in 2016 after 2 years in NY, a local GM replacement wasn’t hired. Instead, they re-integrated the US teams into the global functions. TransferWise had over this period hired and developed a strong slate of functional leaders based in London and Tallinn, including seasoned executives who relocated from the US.

The company holds an annual week-long summer offsite in Estonia, for which some US team members got passports to leave the US for the first time. This worked well for bonding, although some people were jet-lagged and experienced culture-shock. What worked even better was when people from European offices did stints in the US for a week or so, to help with onboarding new US hires.

Florida and Estonia in particular, are very far apart from a cultural perspective, but there were things that worked very well. For example, they made sure that CS agents in Tallinn learnt American banking lingo and terminology. On the Florida side, many of the CS agents joined from more traditional corporates). They now found themselves being quizzed by the Estonian engineering team for customer insights to improve the product, and they loved being involved.

Marketing

Ahead of expansion, TransferWise analysed census data, to prioritise how to tackle the US. They looked at the percentage of foreign-born residents, as a strong indicator that someone would use their service. New York, California, and Florida came out top.

You can get scared of how large it is, and not sure where to start. But it isn’t one big monolithic market.

Joe Cross

Initial GM USA

The US had good word-of-mouth (WoM) growth, but the viral coefficient was not the same as in the UK. The team needed to do paid marketing, as well as a PR drive.

WoM has nothing to do with how big a country is - it doesn’t mean that people know more people (except in Brazil!), so the viral loop is not enhanced.

Joe Cross

Initial GM USA

TransferWise didn’t realise how challenging it would be to stand out in New York, given the numerous homegrown fintech companies competing for consumer attention. They had to cleverly use paid social to find pockets of customers. They also ran subway ads in NY for a number of years, which was good for brand awareness, as well as for hiring and team morale, and was ROI-neutral in terms of trackable customer acquisition. Podcast sponsorship also became a major marketing channel.

As the US footprint expanded, they analysed census data in terms of nationalities-by-area, to prioritise which Latam corridors to open up, and where to focus local US marketing efforts for specific Latam communities.

For PR, sharing what was happening in European banking was interesting for tech and business reporters at major media brands - Wall Street Journal, New York Times, The Economist, and Reuters. These were important outlets for credibility and brand. TransferWise business announcements are now usually covered in the US. However, leveraging the reach of consumer media has proved much harder.

There’s such a cultural difference! US consumers are surprised by instant transfers, whilst Estonians ask ‘what’s a check?’.

Joe Cross

Initial GM USA

Archetype CompassCompass

An enterprise SaaS company that pivoted to the US through Boston

About: Mimecast cyber resilience provides email cloud services for security, archiving, and continuity.

Founded: London, 2003

Fundraising: 2008 $2m Seed
2008 $3M Series A
2010 $21M Series B (Index)
2012 $62M Series C

Fundraising to listing: $90M, Series C

Listing: 2015, Nasdaq

US as % of TAM: >50%

US % revenue: 50%

Headcount split: 1,750. 41% US, 41% Europe, 18% RoW

GTM: Spread between field sales, inside sales, and channel

Leadership location: All leadership team now in Boston, except SVP Customer Success in London

Engineering location: Mostly still in London, but secondary EC in Boston, with small teams elsewhere through acquisitions

Founder location: Boston

Founder/CEO: Peter Bauer

The South African co-founders of Mimecast, Peter Bauer and Neil Murray (CTO), were in London when they set up the company. However, some of the early team and customers were back in South Africa, which remained a major market for many years. They built the engineering and product teams in London.

US planning

In 2007, with a team of just 35, Peter aligned the management team behind a US launch within the next 18 months. Although they had explored expanding to other European countries, the US was their largest market, and also more closely aligned in terms of language and regulation.

Mimecast’s Head of Sales (Will) was Canadian, and volunteered to be part of a seven-person landing team, which also included Mark Bilbe (employee #5, and now Chief of Staff to Peter). At the time, Mimecast had only received angel funding, so costs were tight. They rented a small Regus office in early 2008, and gave each team member roughly a $5k relocation allowance. This team set up US data centres, and provided initial tech support (core to their proposition was not using public cloud).

Early days in Boston

Peter had spent a summer in his youth working at a camp in Boston, so he knew the area, and liked it. The timezone, and ease of travel to London, were also a big plus.

Their initial local GM hire wasn’t a good cultural fit, so Will took on the role, hiring a local junior inside sales team. But the lack of any US brand, or nameworthy VC’s, made this tough. There were some great hires - some still with the company today - but after 6 months, they realised they were spending more on recruiting than the revenues being generated! However, they did win some notable US customers, as well as expanding through UK customers (especially law firms) that had US offices.

During this time, Peter was already spending 30-40% of his time in the US.

The financial crisis hit just after they raised a Series A. Mimecast considered closing the US office, but kept the faith and, fortunately, didn’t. Instead, they kept costs tight, and weathered the downturn.

The team kept a central R&D function in the UK, but otherwise encouraged a lot of autonomy in each local geography (UK, US, SA), with no central marketing, etc. This was very important, as it encouraged local entrepreneurialism, and avoided tensions. These days, things are more highly leveraged from the centre, but Peter believes a looser federation was the right model for that period.

Founder move and leadership

Index led a Series B in 2009, and soon encouraged Peter to move to the US. But he was not ready yet.

I said it wasn’t necessary. Our centre of gravity was still in the UK, and it was hard to see how to extricate myself. But I said I’d think about it.

Peter Bauer

CEO & co-founder

Instead, they hired a local, more experienced, GM, who helped with scaling. Two years later, they switched to someone from the original landing team. By this point, the US market opportunity and momentum was clear. Peter encouraged his wife to visit Boston, and in mid-2011 they moved with their 3 kids (youngest 5 years old). Neil, as CTO, remained in London, together with Alan Kenny to lead UK sales. Peter’s move proved transformational for the business.

The biggest challenge became dealing with the ambiguity of where our centre of gravity was.

Peter Bauer

CEO & co-founder

Within one year, Peter convinced his CFO, and early joiner, Peter Campbell, to join him in Boston from London. But the rest of the leadership was in the wrong place. It was time for a new set of execs to take the company into the next phase. As a young founder, however, it took Peter 18 months to fully appreciate this.

In retrospect, it was obvious. I was in the US. Our largest market was the US. And the deepest talent pool was in the US.

Peter Bauer

CEO & co-founder

Scale and IPO

Between 2014 and 2015, Mimecast made a series of executive hires in the US. Critically, this included Ed Jennings as COO, which enabled Peter to focus on the upcoming IPO, whilst sustaining growth.

Ed was a transformational hire. But I’m not sure we could have hired him earlier than we did. We lacked the brand. Even if you throw money at stars, the risk is that you just end up hiring mercenaries.

Peter Bauer

CEO & co-founder

The IPO was in November 2015. The engineering team is still mostly in London, although there are now smaller teams elsewhere, including in Boston. And in 2017, Mimecast hired global product and engineering leaders in Boston.

I wanted the leadership team to all be together in Boston. Our SVP eng spends half his time in London, and we’re lucky he can do that.

Peter Bauer

CEO & co-founder

First boots on the ground

It is often claimed that successful US expansion requires the founder to relocate. The reality is more nuanced, and can be understood more clearly through the lens of our expansion archetypes set out in Chapter 2.

Saying ‘the founder has to move' is a very over-simplified way of thinking about things.

Andrew Robb

Former COO, Farfetch

First, some data which illustrate the divergence between claim and reality. In our survey of European startups that have expanded to the US, 46% believe that it is critical for a founder to move to the US. However, only 36% of founders actually make the move. Even in our outlier list of European successes in the US, only 40% of founding CEOs moved to the US. If it’s essential for founders to relocate, how come less than half actually do, even in successful US expansions?

How important is it for a founder to move to the US in order to 'win big' there?
Index survey of European founders who have expanded to the US. Sample size = 54

Founder moves

For companies falling into the Compass archetype - which is almost always the model for enterprise software startups, although rare for B2C - we agree that the founder must relocate to the US to maximise success. The earlier in the expansion you move, the better, and the move should be for at least 2 years, if not permanent.

Founder move by archetype

Archetype Founder move? When? US leadership

Compass

Essential

First boots

Founder/CEO

Pendulum

Probably

Later in expansion

Founder/CEO, or local GM/President

Anchor

Not necessary

-

Local GM/President

Telescope

Not necessary

-

Functional leads:
- Business Development
- Customer Support

If you’ve done your homework and you’ve committed to winning the US, then ideally the founder needs to move before making any local hires. They also need to promote a proven commercial team member to lead Europe in their absence.

Mannie Gill

Renovata Partners

For the Pendulum archetype, where your TAM is more distributed internationally rather than >50% US, then it is desirable, but not essential, for the founder to move. The move can also be postponed until there is clear evidence of the US becoming the company’s most important growth-driver.

In the Anchor and Telescope archetypes, it is not usually necessary for the founder to move to the US. The recipe for success for the Anchor is to create an autonomous locally-built US GTM team. With the Telescope, the US team is more focused on specific functions (business development and support), which are locally-hired.

As noted previously, in B2B there is a tendency for Telescope archetypes to morph into Compasses or Pendulums; in pursuit of larger clients and deals, the GTM strategy becomes sales-led rather than self-serve. If this happens, a Founder move might again become necessary.

Regardless of which archetype you are, and whether you will need to ultimately relocate to the US, it is essential that the founder spends a lot of time in the US. You will need to get the lay of the land, and develop first-hand experience of what customers, prospects, partners, and investors are looking for. You also need to acquire an understanding of the US talent environment, to inform your future hiring plans.

For the first two years, I was in the US 1 out of every 3 weeks. After two years, I started going less. We were closing deals so fast early on that I felt I had to be there.

Samir Desai

CEO & co-founder, Funding Circle

Why it matters

There are two distinct sets of reasons why being a founder on the ground in the US makes such a difference:

1. Signalling

When you first expand, every individual you come into contact with in the US will be sizing you up. They will be assessing the likelihood that you’ll still be around in a year or two; talent, customers, partners, and investors. You will have few, if any, US employees or US customers, and an underwhelming office space. Your permanent presence as the CEO is the strongest signal that you can provide to the market of your commitment. It broadcasts a pivot of company attention and resources to the US, internally as well as externally.

When the founder moves, it shows your level of commitment to the cause. It puts you in a category and signals your seriousness to the market.

Martin Mignot

Index Ventures

It is human to want to be a part of the action. No one wants to be on the periphery of an organization in a satellite office. By establishing a true presence in the US.S., European startups are able to recruit the best talent from Silicon Valley and beyond by making them equal partners.

Sarah Cannon

Index Ventures

2. Management

As you ramp-up in the US, you need to ensure that your vision is being realised. The size of the opportunity means that US expansion is a ‘second launch’ for the company itself. You therefore need to be personally involved in all initial hires and sales, to understand what is different, and to secure the resources and attention from HQ that will be needed for success.

It’s so far away. You need to know if it’s going all right, and they need to know you care, because it’s the US, and that needs your presence.

Samir Desai

CEO & co-founder, Funding Circle

It’s very important for the founder and ideally an established salesperson to spend extensive time in the US to onboard the first US hire. Without this, the ramp-up time is just too long.

Abakar Saidov

CEO & co-founder, Beamery

Having co-founders can really help with the challenges of a US relocation. Co-founders are the best culture-carriers for the company, to uphold your values and vision when you are operating across continents. A technical co-founder can continue to drive your engineering efforts in Europe when you move. A more business-oriented co-founder can play one of two roles; first, they could lead your drive into the US in your place, at least for an initial period. Alternatively, they can continue to drive European growth when you need to move.

Which founder moved to the US?
Index Research. Sample size = 93

Challenges of moving

Even if you know that moving is the best choice for your business, relocation is an enormous personal, and lifestyle, decision - particularly if you have a partner or children. But if your ambition is to build a global success where the US market is key, relocation is very likely to be part of that journey. It is best to be honest with yourself and your family about this, so that you can mentally and emotionally prepare for it.

Recognise that it’s very hard for your family, much harder than it is for you. You need to get their permission.

Pedro Bados

CEO & co-founder, Nexthink

There are also business dependencies that can stand in the way of you relocating to the US. In particular, you need to have relinquished day-to-day ownership for the product roadmap and execution. As the founder, this will have been a crucial role that you have played in the success of your company. With scale, it is something that you always need to step away from - maintaining the product vision, but progressively delegating more responsibility for execution, and for quality control (i.e. does this specific release, or feature, meet your standards, and match your vision?).

An early pivot to the US, as recommended under the Compass archetype, will often bring this transition into focus earlier than you might have anticipated. It requires you to strengthen product management, maybe bringing in a more senior leader, who you can trust to ‘leave at home with your baby’ whilst you turn your focus to the US opportunity. Given the need for the right chemistry, and the lack of product leadership talent in Europe, it can be a drawn-out process to find and onboard someone who earns your confidence.

When we first landed in the US, I was too immersed in day-to-day product decisions to move full-time to NY. So two of my co-founders were there for the first two years before I could join them.

Felix van de Maele

CEO & co-founder, Collibra

A similar dependency on the CEO may exist for driving sales in Europe. This scenario is less common, as founders less often have the skill-set of good sales managers, and there is a deeper European talent pool of commercial leaders. However, to clear the path for a US move, you need to have a trusted revenue leader to drive European growth in your absence.

I only moved to the US once we had strong commercial leaders who I could leave in charge of our growing European business.

JB Rudelle

Chairman & Founder (former CEO), Criteo

Given the range of issues involved in moving with a family, it may make sense to work with a global mobility company such as Topia, Cartus, or BGRS. These one-stop shops usually work with corporates, who are continuously redeploying employees between countries. The range of issues they cover includes:

  • Immigration
  • Compensation adjustment
  • Tax advice
  • Moving services
  • On-the-ground support

Given that you will have existing legal and tax advisors, it is often best (and always cheaper) to restrict your use of mobility services to providing on-the-ground support for yourself and your family:

  • Finding a home
  • Temporary housing
  • Schooling
  • Childcare
  • Social security number
  • Bank account
  • Drivers’ license
My clients always worry most about their children. But I’ve seen it over and over - the kids adjust faster than the parents.

Gigi Panico

Independent Boston Relocation Consultant

Archetype CompassCompass

Founder relocation to Boston to lead US expansion

About: Nexthink is the global leader in digital experience management for your employees.

Founded: Lausanne (Switzerland), 2004

Fundraising: 2006 $1.3M Seed
2007 $3.3M Series A
2014 $28.6M
2016 $36M Series B
2018 $85M Series C (Index)

Fundraising to date: $156M, Series C

US as % of TAM: >50%

US % revenue: 20-50%

Headcount split: 600. 20% US, 70% Europe, 10% RoW

GTM: Enterprise sales

Leadership location: Entirely in Europe until 2019. Now CMO and Chief People Officer in Boston, and CRO hire will be in US

Engineering location: Entirely Europe

Founder location: Relocated to Boston in March 2020

Founder/CEO: Pedro Bados

A European focus

Nexthink was founded in Lausanne, which is still the main engineering and product hub, with 90% of the R&D and G&A teams. Pedro was originally CTO, but later became CEO. They have a small R&D hub in Madrid with some customer support and salespeople in the UK, France, Germany and Dubai.

The company took a circuitous route to product/market fit, with just $2m ARR in 2010, almost entirely from European, particularly DACH, customers.

In 2012 they hired their first remote reps in the US. Now, there is a team of 110 in the US with the majority in Boston (half of the executive team, plus SDRs, marketing, HR, G&A), as well as 45 AEs and SEs in the field. While the TAM is US-dominant, and US growth is accelerating, revenues are still more weighted to Europe.

Initially we didn’t have global ambitions for Nexthink. We didn’t appreciate the importance of the US. There was a lack of role-models in Europe, and we didn’t have the investors to push us there or show us how to succeed.

Pedro Bados

CEO & co-founder

Cautious US exploration

In 2016, after their Series B, Pedro came close to moving to the US. However, he found that he was still too involved in product development to make it possible. In addition, his wife had just had their first child. Instead, he spent 1 week in 6 in the US, and he hired Kevin, a highly experienced CRO, who moved from London to Lausanne.

Nexthink were fortunate in 2017 to hire Mary Beth, a highly experienced SaaS sales leader, as VP of North American sales. Nexthink had just $4m ARR in the US, and a team of 14. She had a great rapport with Kevin, felt at home during her visit to Lausanne, and was very impressed with the customer feedback.

Boston was chosen because of timezone, familiarity Pedro had with the city, and because they found an opportunistic early hire there. The city has proved good for talent and retention.

The Boston talent pool is very strong - there are many great and relevant companies for us: EMC, LogMeIn, Mimecast, Dynatrace, Hubspot, Rapid7. I think loyalty is better in Boston too – definitely when compared to SV, and also NY nowadays. Lower churn, great attitude, and perhaps culturally closer to a Swiss approach.

Mary Beth Vassallo

VP North America Sales

Moving with a family

Pedro has 2 pre-school age children, and the entire family has moved over. They used a welcome-service company in Boston, with a Spanish speaker (his wife’s first language) to help them find an apartment, nursery, etc. The lifestyle in Boston is well-suited to young families and Pedro is excited by the city.

I’m passionate about research and always dreamed of going to MIT, so I’m excited to be just next door.

Pedro Bados

CEO & co-founder

Centre of gravity shifting

With continued success and global ambitions, Nexthink raised a Series C led by Index. It became clear that the company’s attention and leadership needed to pivot to the US, with Pedro at the helm.

Our investment is very focused on the US, after overachieving in 2019.

Pedro Bados

CEO & co-founder

Pedro took advice from Peter Bauer at Mimecast (featured in a separate case study in this book) and started building out a plan for both moving key functions of the business to the US, and hiring key leadership positions in Boston. In October 2019, Bernd Leger joined in Boston as CMO. Originally from Germany, Bernd has spent the last 20 years in the US as a marketing leader in several high-growth companies. In March 2020, Pedro was just able to move to Boston too, ahead of the Covid-19 lockdown. And in May, Meg Donovan joined as Chief People Officer.

If you want to make the pivot to the US, you have to follow-through as fast as possible - including C-level build-out.

Pedro Bados

CEO & co-founder

Internally, the relocation is seen as a sign of the confidence and ambition of the business.

People stay because they see the opportunity. We’ve got 72 clients here, and we’re still not even scratching the surface. Yet we’re closing some of the biggest logos around.

Mary Beth Vassallo

VP North America Sales

In 2019, Nexthink reached $100 million in total sales with more than 110 percent growth in North America. Despite the uncertainty that Covid-19 has created amongst businesses, Nexthink continues to hire in Boston and grow globally.

Landing teams, or local US hires

A landing team is always desirable if you are largely replicating your European GTM approach. This is regardless of whether a founder is also in the US from day one. Landing teams act as ‘culture carriers and decoders’, transmitting values, processes, and product understanding. With trusted relationships across the European organisation, they will also be more persuasive in securing the changes necessary for US success - be these in product, marketing, or operations. Landing teams are usually 2-4 strong, and should include both senior and junior/mid-level members. The ideal functional composition of landing teams can vary a lot. If you already have a number of strategically important US clients and a land-and-expand model, customer success will be important. If you rely on digital marketing for customer acquisition, then generating brand awareness and credibility could be more important. Otherwise you might do best with a SE and AE, to get selling.

We worked hard to create an initial team of 10 in the US, build the momentum, align culture with Europe, and then accelerate.

Pierre Betouin

CEO & founder, Sqreen

On the other hand, if you are looking to build new competencies in the US, hiring locally is essential from the start. This is most commonly the case for business development or strategic partnering (as in the Telescope archetype). You will want someone who combines experience with existing relationships at your relevant targets - be these the Apple and Android app-store teams, systems integrators for reseller/channel development, major record labels, etc. These will be rare profiles, but made up of individuals who are by nature more used to hustling, and to working autonomously.

From our research, the most common first-hire in the US was a senior GM or Sales Leader (36%), followed by an executive (i.e. global functional leader).

First hire in the US
Index Research. Sample size = 160

Making a senior hire early on will help you build-out the rest of the team. Not only will such individuals bring their own network to hire from, but their early commitment and belief will boost your credibility to other candidates.

Hire the best people early, even if they are expensive.

Charles Delingpole

CEO, ComplyAdvantage

If you are the Compass archetype, and a founder is part of your US landing team, it usually makes sense to hire a US sales leader first. You want a player/coach, who has managed at least a small team previously, but who is willing to get out and secure early sales personally for the first 6 months or so. They also need to be experimenters - optimising the GTM model, and adjusting the targeting strategy. It is often sensible to focus early sales efforts on ‘deers’ - as opposed to rabbits or elephants.

In other words, mid-market prospects, who will help you to build US market credibility, without too long a sales cycle or highly-complex implementation requirements. This type of hiring profile is less about seniority, and more about attitude and motivation. It is unlikely that you’ll find them in mature and large organisations - you need someone who is comfortable with ambiguity, which is more typical of startups. The job title will likely be VP Sales, or VP Sales (US), and they will report into the CEO (or other founder who is on-the-ground in the US). Compensation is likely to be $350-400k, split 50/50 between base and variable.

Given the challenge of finding the right sales leader on day one, you might be better off hiring 2 mid-level managers, split by sector, or opportunity size.

Stephane Kurgan

Index Ventures

Unless you have an experienced and senior sales leader in your landing team, we caution against hiring more junior individuals on day one. They will be unable to hire a local team around them, and are therefore likely to end up isolated, unsupported, and unmotivated.

Our game-changer was to send co-founders able to transmit our DNA, and to recruit within 12 months a team of senior salespeople. We should have done it way before.

Christophe Collet

CEO, S4M

For the Anchor or Pendulum archetype, it is less likely that there will be a founder on-the-ground in the US. You will initially rely upon a larger landing team covering multiple functions, before hiring a US General Manager profile - who often carries the job title of President (US / North America). This individual should be highly experienced and senior, with a strong network and reputation, who can be a magnet for talent, partners, and customers. You will need to have a strong narrative of past and future growth to appeal to this calibre of hire, and it can take 6 months to run a search to identify the right person. They typically report directly to the CEO, and joinbe a member of the global executive committee.

Making your first few local hires in the US is likely to be extremely challenging. On one hand is the employer brand challenge - you are probably an unknown quantity in the US. On the other hand, there is the challenge of learning how to assess US candidates. Many founders we interviewed highlighted that Europeans have to learn how to interview Americans. You should factor in the probability of mis-hiring in the early days.

We found it difficult to hire in the US because all candidates sound amazing and polished. European interview techniques don’t work. I found that referencing was much more useful. I listen to what referees have to say and then ask them to rate candidates on a scale of 1-10. I then ask why the candidate is not a 10.

Samir Desai

CEO & co-founder, Funding Circle

They present themselves so well and so confidently, I’ve learnt to strip away my emotions, and to use situational interview techniques, really drilling down into the detail of how they have done, or would approach doing, something specific (eg system implementation).

Pedro Bados

CEO & co-founder, Nexthink

You may struggle with senior candidates’ perception of European companies. European funding rounds are on average lower than in the US, so they may not be impressed with your level of fundraising. And unless your VCs have got a strong US footprint, candidates won’t know who they are.

We find that candidates are usually neutral to slightly suspicious of European companies. They’ll ask; what’s the company called? - never heard of them; where are they from? - where the hell is that; who are the investors? - never heard of them; how much have they raised? - meh; who’s their biggest client? - never heard of [insert European blue-chip such as Santander, Danone, or Siemens]; where’s their office? - they’ve got two desks in a WeWork?!

Mannie Gill

Renovata Partners

In our experience, successful early hires in the US almost always have some international flavour to them. Such individuals are more likely to be attracted to working with a European company in the first place. They will also be more comfortable with cultural differences, allowing them to translate between US and European approaches.

US leaders of European companies tend not to be the typical local person - there is usually something different and international about them; dual-national, spouse from Europe, spent a year studying abroad, whatever...

Dom Vidal

Index Ventures

When I interviewed with them, I saw a massive opportunity to capture the US market...I’m a builder, so let me at it!

Mary Beth Vassallo

VP North America Sales, Nexthink

Archetype AnchorAnchor

Accelerated expansion through US acquisition

About: Funding Circle is an SME loans platform.

Founded: London, 2010

Fundraising: 2010 $1.1M Angel
2011 $2.5M Series A (Index)
2012 $16M Series B (Index)
2013 $37M Series C
2014 $65M Series D
2015 $150M Series E
2017 $100M Series F

Fundraising up to listing: $372M

Listing: September 2018, LSE

US as % of TAM: >50%

US % revenue: <30%

Headcount split: 1,100. 30% US, 65% Europe, 5% RoW

GTM: Inside sales (borrowers) and Partnerships (institutional lenders)

Leadership location: Mostly Europe, with US Managing Director

Engineering location: Primarily in UK with small hubs in other non-US geos

Founder location: London

Founder/CEO: Samir Desai

US Entry Strategy

Small business lending is an enormous market, even in the UK alone. Funding Circle focused on achieving a leadership position as a digital lending platform for the first few years. However, they knew that the US market was far larger, and presented a window of opportunity for a landgrab. Samir was also concerned about emerging US competitors coming to the UK - although in retrospect, this wasn’t likely to happen. At the end of 2012, Samir together with Lisa (CSO), started exploratory visits to the US. They spoke with regulators in NY and DC. This uncovered that many US platforms were using ‘Webank’ to circumvent state regulations. They wanted a more autonomous and scalable platform, but realised that this route would take over 12 months, to comply with the various state regulations.

In order to move faster, they started looking for acquisition targets, to secure both the necessary regulatory licences, as well as a team who understood the US domestic market.

It felt as though we needed some founder energy in the US.

Samir Desai

CEO & co-founder

Acquisition

At the end of 2013 they completed the acquisition of Endurance Lending Network (ELN), a San Francisco startup with a team of 12, and licences to operate across 31 states. The mechanics and structuring of the acquisition were difficult and expensive, with 3 SPVs to optimise the financing and tax structure.

Sam, one of the co-founders of ELN, was a key benefit of the acquisition. He partnered closely as a co-founder to Samir, and helped build the combined business, staying on for four more years.

Leadership structure, geography and evolution

They began with a distributed leadership model. James Meekings (co-founder) was running the UK, and Sam ran the US. The Chief Product Officer and Chief People Officer were also in SF, with the rest of the leadership in London. However, the global leadership and matrix structure slowed things down: Decisions had to be escalated up to Samir whenever there was conflict between the needs of different countries, or between countries and functions.

Distributed matrix teams don’t work well unless there is a country head who has the final say.

Samir Desai,

CEO & co-founder

Functional leadership is now focused in London, with a US MD and other country heads. There are centralised teams for finance, legal, tech and risk. Marketing, sales and operations are local to the US, UK, and other markets.

With less of a matrix structure, there is less conflict, and we move faster. I’m not a bottleneck any more.

Samir Desai,

CEO & co-founder

Samir’s Advice on Acquisitions for US Market Entry:

  1. In landgrab situations, acquisitions are worth exploring, for speed-to-market. Particularly if you are in a regulated sector, and can acquire an operating licence

  2. Make sure the founder of the acquired company is someone you can work with

  3. The acquired company needs to align with HQ. It needs to be clear that they are being acquired

  4. Be clear about what is going to happen, how it will work, and structure the right package with the team

  5. A matrix structure helps with integrating the new business, but be clear on who has the final say

Operational issues

There are some great sources of information available online which can help you navigate specific operational topics around US expansion. We want to provide an overview and summary here, focusing on issues which have come up repeatedly in our experience, offering as clear and simple guidance as possible. However, we are not lawyers or tax advisors, and you should always speak to a professional before you act; regulations and best practices are constantly changing, and your specific situation may be different.

Professional advisors

Business culture in the US leverages professional service providers much more than in Europe. You should identify experienced advisors familiar with supporting European VC-backed companies. You will need multiple providers in order to set up in the US. One of these advisers - usually your lawyer - will become your point person in case of any questions.

  • Lawyer
  • Immigration specialist
  • Tax accountant
  • Outsourced HR and benefits
  • Bank
  • Insurance provider

Your CFO will usually take responsibility for operational issues around expansion. Alternatively, it could be your COO, or Operations lead. Your Head of People may handle the HR and benefits setup.

Once you have chosen advisors, everything can get completed in roughly 4-5 weeks, with the important exception of immigration, which will be more like 4-6 months.

Visas

August 2020: Following Covid-19, the US has suspended visa services worldwide since March. There is also a temporary freeze on H1-B and L-1 visas. It is unclear when these restrictions will be lifted.

Visa applications for relocating staff - either founders or employees - are the most common bottleneck holding up US expansion. The time to approval is unpredictable, but generally 4-6 months, so it is crucial to plan ahead. Immigration is a highly-politicised topic, with constantly-shifting rules and restrictions so you need to explore your options carefully.

In the exploratory phase, when travelling to the US, most companies use the ESTA visa waiver programme. But be careful not to violate any conditions. You must be travelling for valid business reasons, which includes office set up.

The Visa Waiver Program allows people to travel for business or tourism for 90 days per visit. There is no limitation in the number of visits per year but keep in mind that if the person spends too much time in the US it will likely lead to denied entry at some point.

Paul Samartin

Samartin & Friends

Once you or a team member are ready to actually relocate, it is time to work with an immigration specialist to assess the best visa route. Where you are incorporated does not matter for immigration. It is your own nationality that determines which visas you are eligible to apply for, and how long your visa may be valid.

Your immigration specialist should help you assess the likelihood of getting an acceptance for each proposed member of your landing team. There may be more burden of proof for less-experienced hires. You will need to make the case for each employee - for example, drawing on their title, salary, position in your org chart, and uniqueness of their specialised skills.

There are five US work visa routes you may use. But most startups go for E-1, E-2 or L-1 visas.

The E-1 and E-2 treaty visas should be the first option that start-ups should consider. They were designed to encourage investment and trade with the US, so they are generally reviewed more favourably. They are usually also issued for a longer term and give the holder more flexibility, plus options for indefinite extensions.

Diana Okoeva

Clintons

Visa Category Comment How does it work?

E-1

Treaty Traders

Often overlooked visa category. Good for startups that qualify

  • 50% of the company must be owned by nationals sharing same nationality as the principal applicant
  • 50% of the company’s international trade must be with the US
  • Processed by the local US embassy (rather than USCIS) which can often speed up the process
  • Need to be a national of a country with which the US has a treaty
  • Available to principal owners, executives, managers or those essential for the US roles (but must share nationality with the principal applicant)
  • Visas can be up to 5 years and extended indefinitely
  • Spouses can apply for derivative visas and US work authorization

E-2

Treaty Investor

Most popular startup visa category

  • As per E-1, except:
  • Must demonstrate significant investment into the US entity
    (versus 50% international trade with the US)

L-1

Intracompany Transferee

Next best option after E categories

  • Available for executives, managers or employees with specialized knowledge (higher threshold than for the E-1/E-2 visas) who have worked at the company for at least one year
  • Initial petitions can be approved for up to 3 years and can be extended in 2 or 3 year increments
  • Maximum limit of 7 years for executives/managers or 5 years for employees with specialized knowledge. (If they leave the US for a year, can apply for another term)
  • Spouses can apply for derivative visas and US work authorization

H-1B

Person in Specialty Occupation

Unpredictable visa category

  • Capped, and awarded via an annual lottery. Approximately 40% success rate (rising to 65% for applicants with postgraduate qualifications)
  • Registrations must be completed in March and if approved, the individual can start working in October
  • For years, spouses of H-1B visa holders were not allowed to work. Since 2015, there have been some exceptions, however this is currently being challenged in court

O

Persons with extraordinary ability or achievement

Could be a route for founders who have raised large rounds, whose companies are doing well, and who have significant press

Could not be used to send multiple team members

  • Must demonstrate a record of extraordinary ability or achievement, showing that the individual has risen to the top of their field, and is one of a small percentage to have done so

Note: Visa types that have been suspended as of July 2020 are greyed out in this table

Visa applications require extensive documentation. Common to all the routes listed above, you will be asked for:

  • Articles of Incorporation
  • Documents confirming ownership
  • Companies House AR01 Report (if in the UK, else national equivalent)
  • A detailed breakdown, or spreadsheet, of all funds invested into the US venture
  • Evidence of your investment in the US business including signed leases, evidence of IP and evidence of spending and payments to set up the business
  • Evidence that the business is real and active, including state and federal licenses, evidence of ongoing work and marketing materials
  • Business plan with a five year profit and loss forecast for the business, including assumptions and a breakdown of start-up costs necessary for the business to become operational

Applying for a Green Card

None of the visa routes above automatically lead to Green Cards or US permanent residency. If you intend to apply for Green Cards, you will need to explore the options well in advance. Founders on E visas can hit problems at the point of sale of their companies when they have not planned ahead.

Immigration Specialists

Given the complexities of the US immigration system, it is advisable to work with a specialist lawyer, rather than the immigration department of your corporate law firm. In the UK, the following are highly-regarded US immigration lawyers:

Diana Okoeva, Clintons (also works with non-UK visa applicants)

Paul Samartin, Samartin & Friends

Elizabeth Jamae, Pearl Law Group

The advisory costs for visa applications are approximately £7-10k for the first applicant, plus £5k per additional applicant.

Lawyer up

A major difference between US and European business culture is the importance of legal counsel. The threat of litigation is higher, and there are more employment regulations (at both the federal and state levels) which could result in discrimination lawsuits.

You should establish a primary relationship with a full-service law firm. Your corporate lawyer there will be able to pull in specialists from other practice areas - employment, equity, commercial, IP, data, etc. Your lawyers can help Americanise your commercial contracts, apply for trademarks and patents, and evaluate data residency, privacy, and regulatory requirements. If you have worked with a smaller local law firm at seed, it may make sense to uplevel your law firm to one with international reach after Series A, or at the point of US expansion.

The US has a stronger litigation culture and the costs for legal advice are much higher – For example you can expect 2x the rates vs the UK, for a partner at a respectable firm.

Joshua Jian

Head of Corporate Development, Credit Benchmark

You should consider a firm which is familiar with the needs of VC-backed tech startups. Ideally, one that operates in both the US and your European home market. These may include:

  • Wilson Sonsini Goodrich & Rosati (WSGR)
  • Cooley
  • Goodwin
  • Latham & Watkins
  • Morrison & Foerster
  • Orrick

Initial setup for US operations might cost $10k. A basic SaaS setup could be as little as $3-5k:

  • Subsidiary set up $1-2k
  • Employment contracts $0.5-1k
  • Stock option plan $2-4k
  • Americanize commercial contracts $1-7k
  • Trademark filing $1-3k
  • Patent filing $8-20k
  • Data Privacy – variable; a simple SaaS set up could be $1k, but something bespoke in a regulated sector (e.g. digital health) could go up to $50k

The Delaware flip

You will need to set up a US company in order to hire your first US employee. Most companies establish a C-Corp in Delaware.

Your C-Corp could be a wholly-owned subsidiary of your European topco. Alternatively, you may choose to adopt your US C-Corp as your topco. This is commonly referred to as ‘flipping’. You will need to assess the pros and cons of flipping, and the timing for doing so, with your specialist advisors. Having a US topco used to be a requirement of US investors (e.g. Y Combinator), and can be a signal of your ambition, but there are arguments for not rushing to flip immediately. In fact, our analysis of 31 of the outlier European successes and case studies referenced in this book revealed that only 29% (9 companies) flipped to the US.

There is a stronger logic for flipping to a US topco if you are a Compass archetype, since this playbook implies a majority of your customers, employees and leadership will end up being based in the US. It also makes it more likely that you will have US investors and an eventual US exit (listing or M&A). For the Anchor and Telescope archetype, the advantages of flipping are less obvious.

We have been advised that we’ll need a minimum of 2 years with a US topco in order to IPO there, so it’s on our timetable.

Pedro Bados

CEO & co-founder, Nexthink

Explore the tax implications (for example your qualification for SEIS and EIS investment in the UK), and the impact of issuing tax-advantaged options to US employees. In certain countries, notably Germany, flipping is treated as a liquidity event with tax consequences; so if you are going to do it, you should do it before you raise any capital.

Unless you have specific tax or governance issues, or want to attract solely US investors early on, there may not be an advantage to having a US topco.

Rini Banerjee

Index Ventures

You should consider how potential investors may perceive a company from your jurisdiction when making topco decisions.

André Dubois

Index Ventures

Bear in mind that if you are based in Europe, but with a US legal structure, corporate processes (eg fundraising) may be held up due to timezone challenges, and your familiarity with laws and requirements.

The legal and tax rules change from time to time and there are macro forces at play beyond your control, so you can’t engineer this too closely.

Rini Banerjee

Index Ventures

Tax structure

After creating your US subsidiary, you will need a tax registration EIN (Employer Identification Number). This will typically take 10 business days, and is required in order to open a US bank account and run US payroll.

You will need a transfer pricing policy from day one, although in the early stages, this is simply a document justifying your approach. Once you reach global revenues of $30-40m, you will need a more extensive policy-designed memorandum.

Sales taxes are administered on a state-by-state basis. SaaS services are considered by 50% of states to be a tangible good, so are liable for sales tax. You need to work with tax accountants to understand the thresholds, and your liability, to make sure you bill clients correctly, and don’t become liable for back-taxes later on. Typically, if you have no presence (employees) in a state and under $100k in turnover, you will not need to pay. However after the Wayfair ruling of 2018, there is precedent for a state to tax a company, even if it does not have a physical presence there.

The cost of advice and set up around transfer pricing and sales taxes will vary, but Frazier & Deeter provide a package for around $7k.

Founder taxes & compensation

Moving to the US can have major tax ramifications for you as a founder, which you need to address with a specialist advisor in advance.

The obvious one is that you will have to file dual tax returns, and look into tax treaties between your home country and the US to see where tax is owed. Most European countries have a dual-tax treaty with the US, making this somewhat simpler.

Founders may also be liable for higher taxes in the US on any equity sale, due to differences in capital gains treatment.

More challenging, although it is less likely to be an issue for founders before Series C, is exploring the tax implications of option grants. We have seen instances where growth shares (often used in the UK, Sweden and elsewhere) are considered to be RSUs in the US, and therefore liable for income tax as they vest.

When you move from the UK, you can get hit in two ways - first, entrepreneurs' relief in the UK is 10%, which is much lower than US capital gains. Second, if your shares are treated as RSUs, you may have a large tax bill the moment you relocate to the US.

Dominic Jacquesson

Index Ventures

It is important to uncover any significant tax issues early, so that there can be a sensible conversation with the board, if a founder or other employee is going to be adversely impacted by going to the US.

Moving is personally challenging, particularly if you have a family. It should be as positive an experience as possible. It may be necessary to increase salary if the founder is relocating, especially to NY or SF, given their high cost-of-living. If the move is later in the journey (Series B+), you could also explore a secondary sale of founder equity, to provide capital for a property purchase, or to alleviate personal risk more generally.

Make sure your partner and family feel good about moving. Over-invest to ensure that your quality of life stays at least the same, even if this means extra expense. Your board should be supportive on this.

Pedro Bados

CEO & co-founder, Nexthink

Tax treatment for shares or options - US versus selection of European countries

US

Capital gains could be as high as 40%
20% federal + state (11% in CA, 8-9% in NY, MA)
Some states have an extra tax for high income thresholds

France

Gains subject to special taxation rates (19% if the employee’s tenure has been more than three years at the date of sale, else 30%) plus social tax (15.5%)

Germany

Taxed as income (14–45%), plus social security contributions (around 20%). Also solidarity surcharge (equivalent to 5.5% of income tax) and church tax (equivalent to 8–9% of income tax)

Ireland

33%

Netherlands

Gains on exercise subject to income tax (8.9–52%)

Switzerland

No capital gains tax

UK

20% (often 10% through Entrepreneurs Relief)

Banking

If you are based in the UK, we recommend banking with Silicon Valley Bank (SVB). This will make life easier when you expand to the US, since you can then retain a single banking partner, with unified online access and reporting. If you are based elsewhere in Europe, where SVB does not currently have a license to operate, you will probably be better-served by working with separate local banks.

Compensation & stock options

Prospective US employees will expect to receive stock options, and will be more sophisticated in the questions they ask about your plan. It is recommended that you set up a US stock option sub-plan, so that you can grant tax-favourable ISO’s (Incentive Stock Options). To operate a US sub-plan, you will need to get a 409a valuation every six months, which sets the Fair Market Valuation for your option strike price. Depending on your stage of growth and your capital structure, this can typically be 50-80% below your last-round valuation, making stock options much more attractive to employees. 409a valuations are fairly straightforward to process, cost $2-5k, and are offered by many providers, including SVB and Fast409a.

While moving employees to the US, be aware that your strike price for options may need to be re-calibrated with a US 409A valuation. For example, if they hold UK EMI options with a more heavily discounted strike price, they will otherwise be liable for additional income tax when it comes to filing their US taxes.

One mistake we made was not getting a US 409a valuation, and not issuing options out of a US plan. This became a major problem down the line.

Anonymous European founder

For deeper insight into stock options, we refer you to the Index Ventures handbook Rewarding Talent, and to the section on US stock optionsin particular.

Payroll, HR & benefits

Most startups use a PEO (Professional Employer Organisation) to manage their employee payroll and benefits, at least until they reach 100+ headcount. PEOs operate a co-employment model; they pay the employee, and then bill the company. There is shared employer liability, and the PEO handles compliance with all filings, health & safety regulations, etc. The PEO model doesn’t affect stock option grants. The PEO will also look after the provision of US health and pension benefits, which are complex and unfamiliar ground for Europeans. PEOs leverage their group-buying power to negotiate with benefits providers, reducing costs for clients. Another benefit is that the PEO will take on the burden of registering offices and/or employees with state-level departments. This allows for simpler management of a remote workforce throughout the US, which is becoming more commonplace now, of course.

PEO service proposition:

  • Payroll (including time tracking for hourly workers)
  • Employee tax and regulatory filings (state and federal level)
  • Health (medical, dental, optical)
  • 401(k) pension plan
  • Life insurance
  • HR advisory

Health benefits in particular are expensive, and come in many different flavours. Employees will pay careful attention to health plans. If you’re hiring experienced team members, you’ll be expected to offer a policy covering family members too. Depending on the plan (in particular, which hospitals are included, and the level of employee-deductible towards any claim), health insurance can cost between $150-$1,500 per employee per month, depending on the level of coverage offered, and whether the employee requires insurance for themselves or a family. By law, employers must cover at least 50% of the lowest cost plan offered to employees.

Pension plans in the US are referred to as 401(k) plans. Companies must offer these plans. Employees make contributions which are deducted from payroll pre-tax, and the company administers this transfer of funds. Companies can choose to contribute to an employee’s 401(k). However, this usually occurs later in a company’s lifecycle due to the cost. It is a way, however, to offer a competitive benefits package and could contribute to a positive employer brand when competing for talent.

Other benefits may be bundled into offerings from some PEOs and are becoming more common, as a way of enhancing your employer value proposition. For example:

  • Online or telehealth appointments for primary care or speciality services
  • Mental health services
  • Fitness and gym access
  • Fertility, adoption, and pre-natal services
  • Ancillary insurances, like disability or life cover
  • 1-1 guidance for both employers and employees directly, to lighten the legal and HR burden

Index Ventures is invested in one of the leading PEOs in the US, Justworks, which is particularly focused on the needs of startups, and the expectations of tech employees. They have a modern online platform for both employees and company administration, and a wide range of bundled benefits. Their Plus-Plan (which includes the provision of payroll, all filings, plus the full range of benefits) currently costs $89 per employee per month.

It’s important to have a competitive benefits package to enhance your employer brand when you enter the US market. Offering a great health plan, contributions to 401(k) plans, and extras like telehealth and wellbeing services, will help you attract talent. They also signal your intent to invest for long-term US success.

Camilla Velasquez

SVP of Product Strategy and Marketing, Justworks

In the early days, using outsourced support from accounting firms + payroll processing firms, and subsequently PEO for running benefits, salaries and other HR related admin was very effective from a time and cost perspective.

Joshua Jian

Head of Corporate Development, Credit Benchmark

Property

You will probably operate from a co-working space when you first land in the US. Not only does this offer flexibility, but you will need a US office address to apply for visas in advance of having anyone on-the-ground. However, once you have more than five people in the US, it is worth considering leasing your own office space, despite the additional cost and unused space. A permanent space can be fitted-out to reflect your culture, and to a spec which matches your European HQ. It signals your commitment to the US, which will be noted by prospective hires, customers, and partners, as well as by employees.

Scaling up

After establishing your initial presence in the US, and gaining some early customer traction, the challenge shifts to your model for scaling. How should you design your increasingly complex global organisation, and your global leadership team?

Leadership talent

There is now a fairly deep pool of talent in Europe across all functions required by startups - technical, commercial and operational. It is growing all the time, and extends well beyond London - to Berlin, Paris, Amsterdam, and elsewhere. However, there are still only a handful of outlier tech successes that have been built in Europe. This means that the talent pool for leaders with proven experience of high-growth tech companies at-scale is still very shallow. This is true across all functional areas. The dominance of US companies, and more specifically, companies from the San Francisco Bay Area, is reflected in where this top leadership talent can be found.

On the journey from startup to listed company (or equivalent scale), we typically see two or three iterations of executive leadership, reflecting the evolution of capabilities that are required at different stages of growth. This is not a hard rule, and there may be one or two executives who stay and grow with the business through different stages. But on average, each function will see three successive leaders. We can characterise these stages as early, middle, and late.

The sequencing for these stages differs by business model, but we set out below a typical journey for a SaaS company, together with estimates for the number and location of experienced leadership candidates at each stage.

SaaS scaling journey - leadership requirements and talent pools

Stage of scaling
(ARR as a proxy)
Number of experienced executives per function Example leadership role and focus:
Sales Function

Early
(Series A-B)
$0 - 15m

1,500 proven US candidates
60% in the Bay Area
200 proven European candidates

VP Sales
- Experimenting with sales motion
- Finding market-fit (client size, sector, use-case)
- Player/coach, hiring and mentoring initial sales team

Middle
(Series C-D)
$15 - 75m

500 proven US candidates
70% in the Bay Area
50 proven European candidates

CRO 1.0
- Scaling and optimising repeatable sales motion
- Full customer lifecycle (upsell & resell)
- Pipeline management
- Strong methodology for sales metrics
- Ramp-up
- Regionalisation and verticalisation
- International (Europe)

Late
(Series E to Listing)
$75m+

150 proven US candidates
80% in the Bay Area
<10 proven European candidates

CRO 2.0
- Nurturing strong leaders below them
- Building channel sales
- International (APAC, Latam, MEA)

The most ambitious European companies will aspire to hire experienced and proven talent. By the time you reach the ‘middle’ stages, this will almost always involve candidates in the US, either to hire in the US, or to relocate to Europe from the US.

Companies also need to be open to step-up candidates.

Pat Haggerty

True Search

Relocating leaders

Within the US

It is a common misconception that relocation is much easier within the US than in Europe. Whilst this may be true for junior or mid-level talent, it is rare for executives.

Relocations of execs in the US, particularly from the West Coast, are super-hard, particularly with Covid-19. I’ve actually done more European relos from the US over the years. It’s actually getting harder now, with dual-career couples juggling priorities, and greater concern for protecting work / life balance.

Mannie Gill

Renovata & Company

If one thing is mis-understood, it’s the likelihood of candidate relocation at exec level. In the last four years, I haven’t done a single one.

David Ives

True Search

On the other hand, commuting is more common for executives in the US than in Europe, and offers another way of broadening the talent pool. This doesn’t work between the East and West Coast - the distances are just too long to be viable over any period of time. However, there are many examples of execs who commute weekly along the East Coast (particularly between New York and Boston), or West Coast (e.g. between Los Angeles or Seattle, and the Bay Area).

If a candidate hasn’t proven themselves to be capable of a commuting arrangement before, that’s a red flag to me.

Pat Haggerty

True Search

Relocations to Europe

For relocations from the US, we advise looking for US candidates with some ‘hook’ to Europe. There is a growing pool of expatriate Europeans in Silicon Valley, who now have young families and/or ageing parents, and who are therefore open, or even keen, to return to Europe. Inversely, they may be American executives, with a European partner who is keen to return. Alternatively, they may have spent some time studying or working previously in Europe, or simply have run international teams involving frequent European visits. Another receptive talent pool we have seen are South Asian expats on the West Coast, who want to move significantly closer to home. Whilst it can be tricky to pre-screen candidates for some of these characteristics, our experience is that you need at least one of these hooks. Beware of US candidates whose interest boils down to “I want an adventure, and Europe sounds fun.” Not only might you waste time on ‘tyre kickers’. The bigger risk is hiring someone who then doesn’t work out, because they didn’t appreciate the realities of moving to Europe, either personally or professionally.

Ensure that your shortlist of candidates in any executive search is therefore weighted accordingly - eg 4 from Europe, and 1 or 2 from the US. Otherwise you run the risk of drawing a blank.

In my experience, someone from Silicon Valley is as likely to relocate to Europe as they are to NY or Boston.

David Ives

True Search

Another common challenge with relocations from the US relates to compensation. US compensation is significantly higher than in Europe, particularly for equity. This difference partly reflects the higher average experience levels of US candidates, and also the very high cost of living in the San Francisco Bay Area. However, even adjusting for these factors, you may need to re-think your executive pay-scales in order to compete for US talent. We recommend also thinking about this in terms of up-levelling compensation for your European-based executives. It creates resentment if a relocated US executive is offered a much better package than their European peers. Often, this is because companies have failed to increase compensation for their existing executives in line with growth.

US talent is far more focused on equity - you need to pay to play, and they’ll do a lot of due diligence.

Andrew Robb

Former COO, Farfetch

It is important to recognise the ‘pulling power’ of different European locations for US candidates. Individual candidates will have personal preferences, but our experience of ‘city appeal’ is as follows:

  1. London - by a significant margin

  2. Berlin, Amsterdam, Barcelona

  3. Paris, Dublin, Copenhagen, Stockholm

  4. Other locations

Recommended Headhunters

For GTM hires in the US:

True Search - Pat Haggerty & David Ives

Renovata Partners - Mannie Gill

Daversa Partners - Gary Constance

For US to Europe relocations:

True Search - Nick Fairclough

Renovata Partners - Thomas Jepsen

Daversa Partners - Wendy Colvano

Distributed leadership teams

Successful US expansion implies that, for at least some functions, or time period, company leadership will be distributed across the two continents. This presents challenges, even for companies with a fully-remote model. The critical factor to ensure success with a distributed leadership team is a willingness to travel and meet frequently. This is essential for any executive in an organisation split between the US and Europe, and the expectation needs to be explicit before making any hire.

Having remote leadership takes a certain kind of person - someone willing to take late-night calls and frequent travel. There are lots of late nights, and lots of jetlag. Not everyone has the stamina for it. Although we wanted our people and leadership co-located, for the right person, remote can make sense.

Andrew Robb

Former COO, Farfetch

At the earlier stages, it is important that leaders are co-located with their functional team, until there is sufficient bench-strength to cover day-to-day management. We see this most clearly with R&D leadership - engineering and product leadership will remain in Europe for several years, before it is possible to consider upleveling these roles in the US. But the recommendation applies to other functions too - marketing, finance, operations, etc. When a functional team is small, there is a significant advantage to co-location, making it easier to establish systems and processes, and to train up more junior members of staff.

An exception to the co-location model is for sales leaders in companies with a field sales model. Field sales teams are likely to be distributed by their nature, and also composed of experienced individuals, so it is fairly common for these roles to be remote. But it is still preferable if sales leaders are located with other leaders.

Engineering stays in Europe

In every outlier success story of Europe-to-US expansion, core engineering has remained in Europe, even if commercial success pivots to the US. Once you have built an engineering team that has in turn built your product, it is simply too risky to move or replace it. Keeping your engineering team in Europe also allows you to take advantage of a strong talent brand, lower costs, and higher retention. Later-stage European companies sometimes add additional engineering centres within Europe as they scale, in order to tap into new talent pools. For example, King and Skyscanner in Barcelona, or Collibra in Wroclaw. But there is still an advantage to keeping hubs relatively close in terms of timezone.

We reviewed hiring developers and UX in New York, but the cost of doing so was astronomical compared to London.

Joshua Jian

Head of Corporate Development, Credit Benchmark

From our research into 275 European companies that have expanded to the US, only 50 had any developers in the US. Much later in the scaling journey, we do sometimes see the opening of a secondary engineering centre in the US. This is typically triggered by the hiring of a US-based CTO.

The problem with engineering talent in the US, particularly in the Bay Area, is that there is just no loyalty. In Europe, they are genuinely excited about what they are working on, and are more likely to stick it out through the highs and lows.

Danny Rimer

Index Ventures

What % of R&D Headcount do European companies have in the US?
Index Research, sample size = 251
Keep technology in one location for as long as you can. If you need to expand, seed the new location with a mini cell and build a team around that cell. Avoid building a technology team in the US, because of retention issues.

Stephane Kurgan

Index Ventures & former COO, King

Organisation design

With the exception of engineering, the impact of US expansion on organisation design varies widely, depending upon your archetype. A summary of each potential journey is presented below, after which we will discuss some specific recommendations for each of the archetypes.

Organisation Design and Leadership - division between Europe and US

Early Stage Venture Stage Growth/Listing Stage
Archetype

Organisation Leadership Organisation Leadership

Compass

All in Europe

R&D in Europe
G&A in Europe
GTM increasingly in US

Europe:
CTO
VP Product
VP Finance

US:
CEO
VP Sales
VP Marketing
VP Customer Success

R&D in Europe
G&A
mostly US

GTM mostly US

All in US:
CEO
CRO
CMO
CFO
CPO/CTO
CHRO

Pendulum

All in Europe

R&D in Europe
GTM, G&A distributed

CPO/CTO in Europe. Others distributed between Europe and US

R&D in Europe
GTM, G&A distributed

Distributed between Europe and US

Anchor

All in Europe

Mini-org in US across all GTM functions

All in Europe, except US President

R&D in Europe

Mirror-org in US across all GTM and G&A functions

All in Europe, except US President

Telescope

All in Europe

All in Europe except BizDev team in US

All in Europe, except
VP Business Development

Mostly in Europe, except BizDev team, plus % of Customer Support, and maybe Finance

Mostly Europe, except VPBD, and maybe VP Support and CFO

Scaling Compasses

The Compass archetype is characterised by a pivot of the whole organisation to address the US market. After the founder has moved, and US commercial traction is established, this has a ripple-effect on all other functional teams, and on leadership. At the point of IPO or listing, the entire leadership team will be in the US, along with about 50% of the overall team.

Product

In the early stages, your product team needs to be close to engineering - close collaboration is critical. But following US expansion, the requirements of US customers will drive your product roadmap. It is essential that your product team is oriented to these needs, hearing them first-hand from customers, as well as from US-based sales and customer success.

This can be achieved whilst keeping your product team co-located with engineering, but you need to put in place rigorous processes to foster communication and collaboration with the US GTM teams.

High-quality engineering talent and strong product experience means that maintaining Israel as the center of gravity for R&D makes sense for most Israeli companies. But this can’t be done successfully without heavy ongoing investment in a culture of cross-border collaboration.

Gil Dibner

General Partner & founder, Angular Ventures

However, what we usually find is the creation of a dual product team. The majority (maybe 70%) of product managers will remain in Europe alongside the engineering team, with a technical orientation. But a smaller team of (usually more-experienced) product managers will be hired in the US, with an explicit customer-orientation.

Product leadership has to be close to customers and to sales. Our product team is now split, with most of the senior PMs in the US.

Peter Bauer

CEO & co-founder, Mimecast

At later stages, with the product organisation growing in complexity, the pressure builds to hire an experienced leader - someone with the gravitas to counterbalance demands from the sales team, whilst capable of maintaining a consistent and integrated product roadmap. The talent pool of proven Chief Product Officers is very heavily weighted to the US, which results in a further pivot towards the US. This individual will often also oversee engineering, through a VP Engineering direct report based back in Europe.

GTM

Sales and marketing organisation and leadership will rapidly pivot to the US, reflecting the growth opportunity and focus, as well as availability of talent. This naturally creates tensions during the transition, particularly if early GTM leadership is already in place in Europe.

It has been tough matrix-managing a lot of people with hard dotted-lines to our Lausanne functional leaders. It’s the biggest challenge.

Mary Beth Vasallo

VP America, Nexthink

Over time, you will probably appoint a VP Sales (Europe), responsible for sales activity across the whole region, and reporting into a US-based CRO. If European R&D is in a secondary hub, the European GTM hub may well be in a different location - London or Amsterdam being the most likely. For example, Collibra and UiPath have both chosen London, despite R&D being centred in Brussels and in Bucharest, respectively. For further insight into building out European GTM operations, read the Index Ventures handbook ‘Expanding into Europe’.

G&A

As the commercial focus shifts to the US, functions such as finance and legal will tend to follow, albeit at a slower pace. The ‘2.0’ leadership hires are likely to include a US-based CFO, General Counsel, and Chief People Officer.

Scaling Anchors

In the Anchor archetype, US expansion involves the creation of a condensed mirror-org across GTM and G&A functions, and hiring a US President. Expansion tends to be later in the journey, by which point ‘2.0’ European functional leaders are likely to already be in place. The US is not expected to become the dominant market in terms of revenue share, although it may become the highest-revenue single country (20-30% of total). At the point of IPO or listing, the leadership team will remain entirely or mostly in Europe, along with 70%+ of the overall team.

Matrix management in the Anchor model can be tricky. With most functional leadership sitting in Europe, it is usually best to give significant autonomy to the US, so that they can optimise for US market needs. In practice, this means dual-reporting lines for US functional heads, but with the stronger line into the US President for sales, marketing, and customer success functions. Ideally, the US President will be responsible for the full US P&L, although this depends upon your business model.

Unlike in the Compass, the product function usually stays in Europe alongside engineering, although you may scale to having one or two US-based product managers, focused on ongoing localisation.

For our product teams, being close to customers is important, but being far from engineering is a risk.

Ingo Uytdehaage

CFO, Adyen

Scaling Pendulums

The Pendulum archetype poses the toughest leadership and management challenges with US expansion. Distributed leadership works best when functional teams are built on a distributed-basis from early on. In fully remote teams, this approach is part of the DNA of the company. But if your initial engineering team is centralised, a deliberate ‘remote-first’ decision needs to be taken when hiring later for functions such as marketing and finance.

My advice is that if you truly believe your company is going to be big, don’t accrue organisational debt; adapt to distributed leadership early, definitely once you’re post-Series B. Especially today, with remote working being more viable and desirable.

Daniel Ek

CEO & founder, Spotify

We never had the whole exec team in one location, and this took a big toll on my personal life. Running a distributed team needs you to have a very clear vision on what you are trying to accomplish, and clear associated KPIs.

JB Rudelle

Chairman & Founder (former CEO), Criteo

I was focused on getting the best talent, so I accepted the trade-offs in having a distributed leadership team: management tension, lots of travel, and video conferencing. I can recommend this when you are in pure scaling mode, and when the proposition is totally clear. But not at the stage when you are changing things, and adding product lines, all the time.

JB Rudelle

Chairman & Founder (former CEO), Criteo

Having a distributed leadership team works fine for an early stage startup where everyone is used to the rough and tumble, and are just working to get things done. Collaboration is harder on the individual-contributor level, but at leadership level, people make it work.

David Helgason

Founder & ex-CEO, Unity Technologies

Criteo provides a good example of successfully navigating these challenges. In 2013, in the midst of hyper-growth, the CEO and founder, Jean-Baptiste, was in Palo Alto. The CRO was in New York, the CPO was in London, whilst the CTO and CFO were in Paris.

Sometimes there is no ideal org structure. A good strategy is to change the design every couple of years, like multinational corporations tend to do, keeping ideas and relationships fluid.

Dom Vidal

Index Ventures

Scaling Telescopes

Telescopes are able to build a customer base in the US with little US headcount. The core customer acquisition channel is usually self-serve growth, which is run by teams back in Europe. Instead, US hiring tends to centre around two functions:

  • Business Development and Partnerships - key distribution and technology partners are in the US
  • Customer Support - proportional to the size of your US customer base

As you scale, you will probably hire a VP Business Development based in the US, to run this function, although it will never become a large team. In terms of headcount, the US support team is likely to become larger, depending on the relative % of your US customer base. If the majority of your support team ends up being in the US, it might make sense to have your global team leader there too - ie VP Customer Support. Most other functional leaders are likely to remain in Europe, even if they are individuals relocated from the US.

The level of expertise you can find for certain roles in the US is beyond anything that exists in Europe. We found this when we hired Danny [Head of Platform Partnerships] and Brian [Head of Ad Sales].

Riccardo Zacconi

Former CEO & founder, King

An important caveat is that in B2B, Telescopes have a tendency to evolve into Compasses. This happens when a software product based on a freemium or bottom-up growth model, starts to get traction with larger enterprises. In this case, the GTM model shifts towards sales, which requires people on the ground. Zendesk, Dropbox, and Slack all evolved in this way. In Europe, Pipedrive, the Estonian CRM software company, is also now shifting from a self-serve to a more sales-driven model, and building a sales team in the US. When this happens, the gravitational forces described in the Compass model kick in - drawing the founder/CEO and the leadership team towards the US.

Archetype CompassCompass

Achieving hypergrowth and category leadership from Romania to the US

About: UiPath designs and develops robotic process automation (RPA) and AI software.

Founded: 2005, Bucharest, as DeskOver, pivoted and rebranded in 2015 to UiPath

Fundraising: 2015 $1.6M Seed
2017 $30M Series A
2018 $153M Series B
2018 $265M Series C
2019 $568M Series D
2020 $225M Series E

Fundraising to date: $1,243M

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 2,700. 30% US, 43% Europe, 27% RoW

GTM: Field sales, channel sales

Leadership location: All in New York, except co-founding CTO in Bucharest, and CPO in Seattle

Engineering location: Bucharest and India

Founder location: Splits time mainly between Bucharest and NY

Founder/CEO: Daniel Dines

History

Daniel Dines and Marius Turca (CTO) founded DeskOver in Romania in 2005. It was a lifestyle business, making $300k a year providing automation libraries and an SDK. Developers discovered the software through SEO and Adwords, and their users included teams at IBM and Microsoft.

In the beginning my motivation was to achieve the minimum wealth I needed to have a decent life. But to be an entrepreneur you need the hunger to achieve something from deep within.

Daniel Dines

CEO & founder

Daniel’s eyes were opened to the RPA opportunity when a customer told him that they were using DeskOver for task automation.

We were building an engine, and selling that engine to other garages...we didn’t yet know what we could do with it. Until somebody told us ‘you can use it to build an airplane’.

Adrian Dorache

Early developer

The shift to RPA

In 2012, with a team of ten, they built a basic RPA product aimed at SMBs. At the time, they were bootstrapping the company through consulting revenues, which was a distraction.

You’re much better off raising money through an accelerator programme. But in our time that just didn’t seem possible from Romania.

Daniel Dines

CEO & founder

With hindsight, the team felt that they went in the wrong direction for a few years.

We launched our product too slowly. We polished it too much, and we killed it too late.

Daniel Dines

CEO & founder

The turning point came in 2014 when they were contacted by a major Indian BPO who was pioneering RPA, and who wanted to work with DeskOver. Daniel sent a team of 3 to India for three months, to get immersed in the problem and implementation.

This was an astral moment, and I felt it could be our break. We didn’t think in terms of ‘product/market fit’ back then, but looking back, this was what got us there.

Daniel Dines

CEO & founder

From DeskOver to UiPath

Between 2014 and 2015 the team grew from 10 to 100. They grew their enterprise customers from 100 to 700, and in 2015 changed their name to UiPath.

Customer leads were still almost all inbound, through a free-trial offer. But deepening relationships with systems integrators (Cap Gemini, Cognizant, and others) were creating a strong channel to enterprises. EY Romania was a key strategic partner, and they got UiPath in front of global corporations.

In 2015, UiPath raised a $1.6m seed round, and flipped to a US topco.

The path to scale

In 2016 they reached $5m ARR through an inside sales team in Romania, who sold remotely into the US.

You can build good relationships remotely nowadays - we were introduced to GE via a partner, and our Romanian inside sales team closed it at $300k.

Daniel Dines

CEO & founder

Enterprise products were rolled out, and offices opened in London and Bangalore.

Web traffic grew from 10k per month in 2014, to 1.5m in 2016. This indicated a much broader base of interest beyond individual developers.

Daniel Dines

CEO & founder

Shift to the US

2017 proved to be a huge year for UiPath on multiple fronts. In January, they hired a US Sales leader following a search process. He was solid, experienced, and ran the US until recently, building inside and field sales teams. A top Romanian sales rep moved over to support him. Pre-sales was covered through a lot of travel by the Romanian team.

Daniel started spending four or five months per year in New York, often with his wife and baby.

My being in NY wasn’t significant for closing US sales. But it helped for hiring US execs.

Daniel Dines

CEO & founder

In February, Forrester ranked UiPath as a leader in RPA, which made a material difference.

The ranking counted a lot. It matters what analysts say. Besides just making sales, your product needs to be very good, and by the time this report came out, we were a company that delivered. This is important, because big companies want to deal with big companies.

Adrian Dorache

Early developer

In April, a large Series A provided fuel for expansion. By this point they were servicing 200 enterprises (40% Europe, 30% US, 30% Asia).

By the end of 2017, they had also built a field sales team of 40 across Europe, the US, and Japan. They achieved $45m in ARR, and doubled their direct sales contribution. Overall, headcount grew from 250 to 500, across 10 offices.

Over the next two years, hypergrowth continued, to $150m ARR in 2018, and $300m in 2019. In parallel, Daniel raised three huge rounds, taking the company to a latest Series E valuation of $10.2 billion.

Our culture is built on humbleness. What can make us successful is really the desire to do something better, to become better. Only people who think from a position of humbleness, can improve.

Daniel Dines

CEO & founder

Engineering and Product

Securing engineering talent in Romania was initially tough, because employees were not willing to take the risk of joining an unproven startup. But there was some success, including a 2016 developer hire who now runs the Romanian engineering team.

Romania was not a good place to build a business. Although there is good engineering talent they are scared of startups. Our success should change the ecosystem. It shows that we’re now in a global era, when it doesn’t matter where you start, if you have ambition and a good product.

Daniel Dines

CEO & founder

We had product owners in Romania, but really they were technical program managers. Effectively, I was running product for a long time.

Daniel Dines

CEO & founder

In 2018,they opened an additional engineering centre in Bangalore.They saw AI/ML integration as key to product innovation, so hired a CPO in Seattle from Microsoft. This has led to building a 100-strong engineering and product team there, focused on innovation.

However, the core engineering is still mostly carried out in Bucharest.

Marketing & branding

Compasses pivot their entire GTM focus to the US. Companies following the other archetypes, however, need to make deliberate choices. These are often trickiest when it comes to the marketing function, particularly in B2C, where marketing rather than sales drives customer acquisition.

Analysing the location of marketing teams in nine later-stage companies reveals differences in approach. However, what is clear is that marketing rarely pivots over to the US. The function usually stays unified, and close to the CEO in Europe.

It’s a Google and Facebook world, which means you can run or at least test all propositions centrally.

Andrew Robb

Former COO, Farfetch

Consumer brands have to feel as though they came from the region and have to rethink positioning of their brand and cultural messaging for the US.

Sofia Dolfe

Index Ventures

Location of Marketing Teams in late-stage companies (non-Compasses)

Company Archetype US Headcount Marketing Team Location Marketing Leader

Farfetch

Anchor

200 of 4,000

Almost all in London 5 in US - brand

London

TransferWise

Anchor

173 of 1,600

Almost all in London 4 in US - content

London

Adyen

Anchor

300 of 1,500

Mostly in Amsterdam 13 in US - local social, events, and comms activity

San Francisco

Spotify

Pendulum

3,200 of 6,850

Split between London and NY, across all sub-functions

New York

King

Telescope

315 of 2,650

Almost all in London

London

Supercell

Telescope

100 of 774

Almost all in San Francisco Community in Helsinki

San Francisco

Lemonade

Telescope

176 of 326

Almost all in Israel

New York
(recent CMO hire)

Pipedrive

Telescope

55 of 600

Almost all in London 2 in US - channel marketing

London

Typeform

Telescope

29 of 259

Mostly in Barcelona

6 in San Francisco - product marketing and comms

Barcelona

The factors which influence the location of marketing teams include:

  • Co-location - the benefits of co-locating marketing teams across sub-functions - paid digital, social, CRM, content, brand, comms, etc
  • Talent - availability of marketing talent in HQ location - eg world-class in London, much rarer in Helsinki
  • Proximity to product team - strong collaboration required, eg for acquisition funnel-optimisation, growth mechanics and viral loops
  • Evolution of comms - the comms aspect of marketing is more strategic with scale, encompassing internal comms, investor comms, and public policy. Staying close to the CEO is important
  • Localisation - certain marketing sub-functions tend to localise more obviously, such as offline campaigns (TV/radio, outdoors, sponsorship), events, and content
Being such a visible part of the London tech scene was something we took for granted. In NY, despite our guerilla marketing, and stunts including taking our clothes off, we just didn’t get the same reaction! We weren’t local, so we needed to earn the right to be anti-establishment.

Joe Cross

Joe Cross, Global Marketing & PR, Transferwise

The comms function operates at its best when it is close to the senior executives who engage with external and internal stakeholders most frequently. When the CEO and C-level moves, the comms team usually follows.

Vojtech Horna

Index Ventures

Archetype TelescopeTelescope

Building a successful product and brand for the US, out of Israel

About: Lemonade is a full stack home insurer powered by AI and behavioral economics, and driven by social good.

Founded: Tel Aviv and New York, 2015

Fundraising: 2015 $13M Seed
2016 $13M Series A
2016 $34M Series B
2017 Corporate round
2017 $120M Series C
2019 $300M Series D

Fundraising up to listing: $480M

Listing: July 2020, NYSE

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 380. 37% US, 55% Israel, 8% RoW

GTM: Mobile app and web platforms

Leadership location: Leadership split between Israel and US

Engineering location: Israel

Founder location: Israel

Founder/CEO: Daniel Schreiber, CEO & co-founder Shai Wininger, COO & co-founder

Founding story

Lemonade was founded by Daniel Schreiber (former president of Powermat) and Shai Wininger (co-Founder of Fiverr), in 2015 in Israel. Both of them were experienced tech entrepreneurs, match-made by investor Michael Eisenber of Aleph VC, as they were searching for their next ventures.

In February 2015, they began broadly brainstorming huge businesses and industries - something that could be explosive, and make a dent in history. They stopped when they got to insurance, and realized the untapped opportunity. They knew nothing about the industry, but used their outsider status, and first-principles thinking, to develop a disruptive concept to be an end-to-end fully-licenced insurer, controlling the entire user experience. Their vision was to build an insurance brand that consumers loved, aligning their incentives with their customers’.

Launching in the US via New York

Daniel and Shai knew that disrupting the industry meant cracking the US market, so they focused on it from day one, even while operating out of Israel.

They chose to launch in NY, because it is one of the strictest places to get a license; if they could prove themselves there, they figured further roll-out would be much easier.

It was a challenging time while they worked on obtaining their NY operating license. During this time they were approached by both the UK and Israel for their initial launch. But they refused and stayed true to their original focus. In September 2016, with licenses in place, Lemonade launched in New York.

It’s part of our values to do hard things! We didn’t start the company to take the easy route, so we persevered in making NY work!

Gil Sadis

VP Product

After this they rolled out across the US quickly, adding 7 new states in 2017, 13 in 2018 and 6 in 2019.

Pivotal hires, building the US team

Ty Sagalow, a seasoned insurance executive, was hired in NY as Chief Insurance Officer. Dan Ariely, the world-leading behavioural economist, joined in 2016 as Chief Behavioral Officer. Hiring great people from the start helped to set them up for success, raising the bar for further hiring.

Building a consumer brand

Gil joined Lemonade in 2015 as the first product manager. He was inspired by Shai’s passion, and also excited to work with Dan Ariely. The chance to build a world-leading consumer brand proved too enticing to pass up.

Shai masterminded the brand concept, alongside the VP Comms and Gil. They would watch insurance ads for hours, and then brainstorm. They wanted to change people’s experience of insurance; in a highly-conservative industry that people love-to-hate, they would develop a brand that people love. They wanted to be selected on the basis of brand, and not on price. They wanted their user experience to mirror that of tech companies like Spotify, Uber, or AirBnB.

Transparency is a core tenet for Lemonade. They shared their bank account statements, and wrote easy to understand terms and conditions for their insurance policies. They gained a cult following - for example, by refusing to insure assault rifles, or guns above a certain value, and by not investing in coal or environmentally-damaging companies.

Our leadership was brave enough to risk that half of the US population might turn away from us, but that the other half would love us.

Gil Sadis

VP Product

Building product from Israel

Shai, Gil and others in the product team travelled to NY constantly. They parked themselves in a Starbucks and asked people to try out the app, doing hundreds of sessions of user-testing, focusing on the UX and micro-copy. Shai was the product visionary - and remains so today.

They had the benefit of time while waiting for licenses, and being very well-funded.

We were lucky. Sector sluggishness gave us a first-mover advantage. We benefited from the numbness of the industry - we shook it up with innovative branding and marketing!

Gil Sadis

VP Product

The Lemonade app launched with strong conversion rates. The first product was renters insurance - a simple use-case with a reasonable, underserved audience, which had been largely ignored by traditional insurers, so it had a lower CAC (customer acquisition cost).

As the offering got more complex, it became harder to be so far from the customer base. So the product team travels a lot, on rotation. They also rely heavily on user data - from the app itself, from user surveys, from support tickets, and through strong communication with their NY and Phoenix customer support teams.

They have since also launched in Europe - starting with the Netherlands and Germany.

Global team set-up

The founders remain in Tel Aviv, alongside R&D, growth and comms. In this respect, Lemonade is organised along the lines of the Telescope archetype. They feel that keeping comms and brand close to the founders and product has ensured coherent messaging and alignment.

Several members of the executive team are now in New York, including the Chief Insurance Officer, CFO, VP Business Development, and more recently, the CMO. Daniel travels to the US every 3 weeks.

In this sense, Lemonade also has some characteristics of the Pendulum archetype, and the company presents itself in the US very much as a domestic player.

Consumer marketing expertise is rare in Israel, which has been so much stronger in B2B tech. Lemonade hired for potential, developing people over time. They also managed to relocate a lot of talent, for example in copywriting.

Communication and Travel

Lemonade is a very data-driven company, which allows them to be location-agnostic.

Now we have such scale, the data really yields insights.

Gil Sadis

VP Product

They emphasise the importance of internal communication, via Slack, travel between offices, and beyond.

Lemonade’s Top Tips

  1. Invest in your brand, taking care with micro-copy, design, and UX. Consumer expectations now are way higher than they were in the ‘lean startup’ days of 2009

  2. It is possible to start a company without being on the ground, if you are laser-focused on your target market. Start with the smallest niche possible in the beginning, and build out from there

Fundraising in the US

The availability of venture capital in Europe has transformed over the last five years, with several new funds launched focused on both early- and late-stage investing, as well as growing interest from top US firms. The quality of European investors is also improving all the time. The fundamentals for European tech are strong, and this will drive continued increases in VC funding.

We believe that investors follow great entrepreneurs and great talent, rather than the other way around. So we were unsurprised when our survey of European founders revealed that access to US investors was very low on their list of reasons for expanding to the US. Only 1 founder - out of 47 - cited it as their top reason for US expansion.

Rank your reasons for expanding to the US
Average weighted ranking of factors
Index survey of European founders who have expanded to the US. Sample size = 47

However, this doesn’t mean that European founders don’t appreciate the value of having US investors: 46% consider it important (31%) or extremely important (15%) to have a US investor. A further 39% believe it is useful.

How important do you believe it is to have a US investor?
Index survey of European founders who have expanded to the US. Sample size = 54

How and when do US investors help?

It rarely makes sense to bring in US VCs before you have a firm timeline for US expansion. They are unlikely to be interested in your company either. At this stage, you will get more value from having local or European investors, who can be more hands-on in supporting you.

It’s important to have an investor who is close to you and can help you where you are. Founders sometimes make the mistake of trying to get US investors too early.

Ari Helgason

Index Ventures

As you expand to the US, however, having one of the top US VCs involved becomes very valuable. They offer:

  • Deep pockets
  • Sector or business model ‘at scale’ expertise
  • Network
  • Signalling and validation for talent, customers, and partners

It remains a fact that very few European B2B companies have reached unicorn status without a top US VC involved.

Coming into the valley with a badge like Sequoia's helped us plant our flag and demonstrate that we were a certain kind of company that was going to scale with ambition.

David Helgason

Former CEO & co-founder, Unity Technologies

It is an absolute requirement for Series B to have a VC with a US network. Great investors are very valuable for building quality management teams.

Felix van de Maele

CEO, Collibra

It is no longer necessary to actually be in the US in order to access the top tier US investors - they are all active internationally, and should be willing to come to you. However, there does need to be a clear US angle to the business plan in order to excite them. And if there isn’t, why would you meet with them anyway?

Our analysis of US VC funding for European startups confirms this perspective. Only 11% of European startups who expanded to the US, received US funding in advance of their expansion. A further 37% secured US funding afterwards.

US VC funding
Index Research. Sample size = 183

Make sure that the US VC you choose - and this is as much about the individual as the firm - is insightful on the complexities of building a business out of Europe. They must show a willingness and commitment to spend time with you in Europe - for board meetings, and beyond.

The reality is that US investor engagement will be low if you’re not actually in the US.

Dom Vidal

Index Ventures

Because US investor involvement only makes sense once you are executing on US expansion, the optimal timing for engaging with them varies by archetype.

US fundraising by Archetype

Optimal timing for US fundraising, for each archetype

Funding Round Series A Series B Series C+
Archetype Compass Telescope Pendulum/Anchor

Compasses will look to pivot to the US early on, so are more likely to engage successfully with US investors for their Series A. Other archetypes will usually expand to the US later. In these cases, your proposition will only resonate with US investors for later funding rounds.

Archetype CompassCompass

Pivot to US following a Sequoia-led Series A

About: Unity is the creator of the world’s leading real-time 3D development platform.

Founded: Copenhagen, 2003

Fundraising: 2009 $7.8M Series A
2011 $17.5M Series B
2016 $181M Series C
2017 $250M Series D
2018 $145M Series D
2019 $125M Series E
(unverified by company)

Fundraising to date: $775M (unverified by company)

US as % of TAM: >50%

US % revenue: >50%

Headcount split: 3,500 (highly distributed). 51% US, 33% Europe, 16% RoW

GTM: Field sales

Leadership location: All in San Francisco, except for CTO and CPO

Engineering location: Distributed globally, multiple centres

Founder location: Based in San Francisco

Founder/CEO: David Helgason until 2014, John Riccitiello since.

Beginnings

Unity was founded in 2003 in Copenhagen by David Helgason (CEO), Nicholas Francis (COO), and Joachim Ante (CTO). They were initially a gaming company, but in 2005 pivoted to tools for game developers. They were one of the first companies to focus on a bottom-up developer-adoption model. They began with a beta product downloadable from the web, with a hobbyist licence for $200, and a pro licence for $1,500 per seat. Over time, the community became more highly engaged.

In 2007, when still a team of just eight, they held their first developer conference in SF, with 60 attendees. In 2009, Unity announced a freemium model which in its first 24 hours, increased their user base by 30,000. In 2010 they also launched an asset platform, allowing devs to share and sell tools and scripts directly.

US strategy and CEO move

By April 2009, they were 30 people - 18 in Copenhagen, 6 in SF, and a few in Lithuania and Brighton (UK). Their sales leader (later to become CRO) was in Seattle. The team realised that to match their ambition, they needed to select a hub for scaling; to access investment, talent, and a deeper tech ecosystem.

The plan was for David to move to London, but during a long, final session to align on this, they removed the timezone requirement. San Francisco emerged as the clear winner.

At this point, the US was already Unity’s biggest market, with major gaming companies there already key clients and prospects.

US fundraising

Unity had been trying to raise a Series A in Europe for a year. They already had term sheets from East Coast and European VCs. Then during a trip to SF, David bumped into Diane Greene (CEO of VMware), who introduced him to Sequoia. Within a week, they had offered a term sheet, conditional on David moving to the Valley. He relocated in September 2009 during the closing period. David’s two co-founders remained in Copenhagen.

Distributed Team

Almost all their developers were at this point in Europe. Game engine developers are specialist beasts - it requires some experience, so they tend to be in their 30s rather than super-young. By this time they have often put down roots and started families, and so are less willing to move. They ended up opening multiple engineering centres - Copenhagen, Brighton, Lithuania, Helsinki, Montreal, Shanghai, etc.

We began with all our R&D in Europe but had to use a distributed model, because there is almost no location in the world with the critical mass of the particular talent we were looking for.

David Helgason

Former CEO & co-founder

Communication Workflows

The years from 2007 and 2009 were challenging for communication. David was constantly travelling, combined with 9 months of fundraising during the financial crisis.

They introduced two workflow improvements in Summer 2009, when the team was 50 strong. First was a two hour exec call every Monday; each exec would fill in notes on a shared google doc ahead of the call, creating the agenda. Second, David established weekly 1-1 calls with his co-founders and execs. These were 15 or 30m standing slots, and not always taken up. The changes were super simple, but they made a huge difference.

I also got an EA, who supported the other execs to some extent too. She was highly experienced, had previously worked with the CEO of Macromedia. She was overpowered versus what we expected, but she got a lot of stuff into shape. She became this anchor, creating a comms backbone for us.

David Helgason

Former CEO & co-founder

Shortly after this, David watched Steve Jobs on stage, talking about how he ran Apple; 30,000 employees, but still steered by a 3 hour weekly exec meeting. He knew then that they had a scalable model.

It was extremely hard - yet, when I hear about other companies, it sounds even harder! For example, our first VP Sales hire was really successful, and stayed through to building a team of 150. I now realise that never happens! So I guess we were lucky. We also had so much business momentum that we could afford mistakes.

David Helgason

Former CEO & co-founder

Culture & communication

Culture and communication are fuzzy but critical elements to building a successful company. As teams grow, maintaining trust and quality always gets harder.

The moment you can’t all sit around a table together, the pottery is broken. You can glue it back together, but you are forever fighting entropy.

Neil Rimer

Index Ventures

The addition of management layers is inevitable, but deepens the challenges, cutting the direct connection between founder and team members. Headcount also doubles each year (typical in a VC-backed startup), so the majority of your people are always ‘recent arrivals’.

Keeping a team aligned and productive in these circumstances is tough for any founder. But you will be doing it whilst also building a new base in the US, many timezones and thousands of miles away.

The number of locations is not a linear problem, it is an exponential one.

Stephane Kurgan

Index Ventures & former COO, King

Our founder survey on US expansion confirmed this - ‘culture and communication’ was flagged as the second biggest challenge (‘hiring’ topped the list).

Your best people may feel they are unappreciated and you won’t know that because you are not looking them in the eye every day. You continually have to work on communication. Don’t take anything for granted.

Neil Rimer

Index Ventures

Keeping your team aligned requires an intentional approach - you can’t just let things happen.

Culture is a prerequisite from the get go. There needs to be continuity between the new offices and HQ so that the new office can also contribute back to the overall culture.

Danny Rimer

Index Ventures

The levers that you have to work with are:

  • Internal communication practices
  • Communication infrastructure
  • Travel and mobility policies
  • Blending US and European business culture

Internal communication

Cultures are unique, but there is a common scaffolding of practices and processes that will support and shape your culture. Whilst these are important for all organisations as they scale, some of them are particularly relevant to US expansion:

All-Hands

All-hands need to be inclusive of both your Europe and US teams, and they need to be high impact and high production. Planning, agenda-setting, and speaking, should involve individuals from both continents.

All-hands are the most expensive, and also the most valuable, moments in your company’s workflow.

Danny Rimer

Index Ventures

Packing everybody into one room per location can emphasise difference - we’re bigger than you are. Even before Covid-19, Elastic had shifted to everybody sitting at their own desk, using Zoom to connect. This democratises the team - everybody’s experience is the same.

Mike Volpi

Index Ventures

It’s not a good look to have the full European team appear on-screen at 5pm on a Friday with beers in hand, telling the US satellite office at breakfast time what they should be focusing on.

Dominic Jacqueson

Index Ventures

Global and Team Offsites

Holding regular, at least annual, global team offsites, can really help with alignment. At scale, they require a huge effort, and a large budget, to organise. But they are a unique touch-point to strengthen team bonding and trust. Annual offsites are usually 3 day events, ideally held in a neutral, non-HQ geography, with sufficient travel time, and a generous time allocation for social activities, built-in.

In addition to global offsites, it may make sense for distributed functions to also hold periodic offsites. The more distributed the team, the more frequent these offsites should be.

Documentation

A major learning from fully-remote organisations is the importance of scrupulous documentation of meetings, decisions, and processes. Tools such as Notion, Slite and gdocs make this easier to organise and share. For example, where a function (e.g. sales, or marketing) holds a weekly global meeting, maintain a single rolling record of what is discussed and agreed. This avoids confusion, and also makes it faster for new team members to onboard.

Staffing Project Teams Across Offices

Set up projects with multi-geo staffing, to promote close collaboration. This is particularly important for internal projects concerning HR or business systems. It will slow down execution, but improve buy-in, which is more important for projects that directly impact on culture.

It's important for your global team to collaborate, but there is also a cost to this. You have to find the right balance leveraging synergies, but not too much.

Dom Vidal

Index Ventures

Official get-togethers are important, but not enough. Feeling part of a team in your day job is more deeply effective than a company-wide event. Shared projects, job swaps, and the like are powerful.

Joe Cross

TransferWise

Weekly Executive Meetings

Once you have a leadership team that is distributed across geographies, you need to formalise the rhythm of exec meetings. There should be a weekly all-execs call, and the CEO should do 1-1’s with each of their direct reports weekly or fortnightly.

Hiring an EA or a Chief of Staff

A great Executive Assistant can be a game-changer for enabling smoother communication in the leadership team, and for enforcing necessary formal processes. They will often prepare the agenda for executive meetings, as well as tracking follow-through on decisions taken and actions committed to. An alternative approach, gaining in popularity, is to have a Chief of Staff to the CEO, who takes on this responsibility.

Engagement Surveys

Once you operate across multiple geographies, team sentiment will diverge. Smaller US offices will probably feel ignored to some extent. The original HQ office can also feel downbeat if there is a sense that influence is shifting towards the US. Although the broad outline of these dynamics is predictable, it is helpful to track sentiment through employee engagement surveys or pulse tracking tools. Once you are at 400+ headcount with significant geographical spread, you should have a dedicated internal comms manager, who can also coordinate actions to address employee concerns.

Our first engagement survey lit up the priorities across offices. We introduced biweekly all-hands, so that Felix [CEO] became visible again, and we put much more effort into internal comms.

Jarlath Doherty

Chief People Officer, Collibra

Onboarding

Employee onboarding is a key period for reinforcing values and shaping culture. The ideal is a global onboarding process, which brings together all new hires for a shared program of induction and learning. In reality, however, global onboarding can be prohibitively expensive, and is instead run on a regional basis, maybe with some functional grouping.

It has been difficult to introduce a global on-boarding process because of the functional split between tech in Europe and GTM in the US. But European GTM hires do go through US onboarding.

Jarlath Doherty

Chief People Officer, Collibra

Working Across Borders

When you are running an organisation across continents, you should be explicit with candidates about the impact this has on your culture, and what it may require from them. For example, you will benefit from having night-owls in Europe, and early-birds in the US, for roles which require extensive collaboration.

Dutch directness doesn't always work well in email and can sound negative. This is avoided when you speak to someone on the phone. We repeat until we are sick of it - don’t hide behind email!

Ingo Uytdehaage

CFO, Adyen

Hiring in the US for both a startup’s needs, as well as for international DNA and fit is very tricky. It is especially hard with a young team who need to be coached with timezone, different ways of working vs Lausanne [European HQ], and more.

Mary Beth Vassallo

VP North America Sales, Nexthink

Hiring across different timezones does present challenges, even in an era where remote work is easily facilitated. We do ask for a commitment for US employees to start their day earlier when required so that there is sufficient crossover with London.

Abakar Saidov

CEO & co-founder, Beamery

We’re used to the time zone requirement - we start work [in SF] at 7.30am - it’s just a fact of life for us, to be able to work with Barcelona.

Francois Grenier

Head of Tech Partnerships, Typeform

Communication infrastructure

The 2020 pandemic has forced everyone, even in traditional corporates, to rely upon video conferencing and collaboration tools, such as Zoom and Slack. With US expansion, investment in these tools becomes even more important.

Not being in HQ [Barcelona] requires us to be more vocal across all channels: All-hands, Slack, etc.

Nicolas Grenié

Developer Advocate, Typeform

Most of us will return to spending at least some, if not the majority, of our time working from an office. But when it comes to video conferencing, there is a lot you can do to ensure that collaboration between offices is optimised.

Leveraging Video Conferencing: The VC’s advice on VC’ing

In the 100 years following the invention of the telephone, both the technology, and the social norms for using it, developed in parallel. By contrast, video conferencing (VC) usage has spread way faster than the social norms around its use. This is a recipe for miscommunication and misinterpretation, with the potential to damage relationships as much as to strengthen them. With less flying in future, our ability to effectively work as distributed teams by leveraging video conferencing, has become essential for success.

In a venture capital firm, the difference between success or failure can be boiled down to a small number of critical investment pitches by entrepreneurs, and votes by the partnership. Smooth and trusted communication is therefore an existential issue.

The video conferencing experience for us at Index has to get as close as possible to all being together in one room. Both for founders when they present to us, and for the investment discussions and voting that follows.

Danny Rimer

Index Ventures

Here are ten best practices that we have established over the years:

  1. All offices should be equipped with equally good VC tech. Don’t provide a higher standard for HQ versus local offices

  2. Keep cameras and screens as close to eye-level as possible. Not mounted higher up on a wall or corner

  3. Be aware of room furnishings. Too much glass and no soft furnishings will result in poor audio quality

  4. Be aware of room size, and participants’ distance from the microphone(s)

  5. Include a wired option for connection. Don’t rely solely on wireless, just in case of problems

  6. Either everybody in a call should be using video, or no-one should. Having one or two people dialling-in to a VC or meeting rarely works. Unable to read body language, they might remain silent, or else continue talking way longer than appropriate

  7. When across >3 locations it is often better to have each individual join a video call from their desk, rather than room-to-room groups

  8. Opt for transparency over sound quality. Avoid one room (location) going on mute. This creates a bad dynamic where a side-conversation in the silent room, perhaps with gesturing and chuckles, can provoke irritation and even paranoia in the other location, unable to hear what is being said

  9. Take care to read body language. Pick up on potential frustrations, air them, and adjust meeting dynamics to ensure things run smoothly

  10. Have a ‘no post-mortems’ policy. When the video has switched off, the meeting has ended. Avoid sub-groups ‘meeting after the meeting’. It can impact later interpretation of what was decided

Pay careful attention to your meeting room setup - positioning of cameras, microphones, screens, and furnishings. You can dramatically improve your video conferencing experience and make it feel much closer to 'being there' for minimal extra cost.

Avron Marcus

Index Ventures

One day every organisation will have a psychologist. For now, leaders play the role of understanding what is happening from a meta point of view with their teams and with each other.

Neil Rimer

Index Ventures

Travel and mobility

A recurring theme when talking to founders about US expansion is the need for extensive travel to and from Europe. This applies to the founders themselves, to the rest of the leadership, and also to the broader team as a whole.

Enabling this cadence of travel requires a large budget, as well as a culture and policies that signal to your team that it’s something to be encouraged. At Adyen, travel is the biggest line-item in the budget, after salaries. They allow employees lots of flex to move between offices as they wish, covering travel and alternative-accommodation costs, for weeks or even months. This facilitates team members getting to know each other across different offices, and is also part of their employer branding.

Our travel policy is simple - if you wouldn’t blush to justify it, it’s ok.

Ingo Uytdehaage

CFO, Adyen

With a distributed leadership team, we make a lot of effort to bring people together for in-person planning and strategy review sessions whenever possible.

Abakar Saidov

CEO & co-founder, Beamery

Renting a company apartment in the US can be a cost effective and creative way to encourage mobility. It also has a side benefit for team bonding.

Renting an apartment converts a variable travel cost (to be minimized) into a fixed cost, to be utilised to the max.

Dominic Jacquesson

Index Ventures

We’ve been through several apartment upgrades in SF - we started by renting a $1,100 pad from a friend, where we’d share rooms. We don’t do that now, we rent smarter places for about $5,000 each.

Nicolas Dessaigne

Former CEO & co-founder, Algolia

A Post-Covid World: Fewer trips, but longer and more impactful

Despite the wide-scale adoption of video conferencing during the pandemic, the value of face-to-face interaction has not diminished. In fact, it may become more essential than it was before. There is little doubt that travel patterns will change post pandemic, with a more thoughtful approach to travel. We anticipate fewer Europe-US trips taken by founders and their teams, with up to a 50% drop, even after a vaccine becomes available. But we also expect an increase in average trip duration. There will likely be more full-week and multi-week trips, with a pre-scheduled set of meetings and objectives. But less hopping-over mid-week for a couple of days to attend a single internal, board, or sales meeting.

The Covid pandemic also comes on the back of growing environmental concerns about the impact of flying. As well as the ethical considerations, a culture built around frequent travel can jar with an increasingly values-conscious employee base.

Companies will need to have increasing social awareness, and ensure that flying is kept under control, and given a strong rationale.

Kyle Polischuk

Global VP People, MOO

Blending US and European business culture

Throughout this book, we have touched on differences in business culture between the US and Europe. These pop up everywhere, but require intentional education and adaptation, to avoid a sense of ‘them and us’.

The hardest thing was, and still is, creating a healthy company culture that respects both US and European ways. That requires daily presence in the US office by execs from Europe. Not just to influence, but also to learn and adjust.

Jesper Theill Eriksen

CEO,Templafy

To summarise some common sticking points and differences that need to be addressed:

Hiring processes

US candidates are generally more confident and better at selling themselves.

Compensation

US candidates get paid more, and are more aware of their market-value.

Psychological contract

US employment laws are looser than in Europe, and so is the general employer-company bond, which tends to be more transactional.

International outlook

Europeans think internationally by nature, whilst much of the US is domestically-oriented.

Etiquette and protocols

There is more sensitivity around physical privacy in the US, and around data privacy in Europe.

US talent is so much more aware of benchmark compensation, as well as the mechanics and vocabulary of stock options.

Sacha Herrmann

CFO, Nexthink

Our geographic differences run alongside the cultural differences between engineers [Europe] and sales [US].

Jarlath Doherty

Chief People Officer, Collibra

There’s a lot of cultural nuance which can often lead to Israelis not understanding fully what is meant when Americans speak. To counteract this, we would have experts come in and teach courses that explain the cultural differences to the employees. Investing in this has been of huge value to the organization.

Doron Gordon

Former CEO & founder, Samanage

Archetype PendulumPendulum

Building the first transatlantic venture capital firm

Founded: 1996, Geneva

US as % of VC market: >50%

US % Index portfolio: 50%

Headcount split: 66 total: 32% US, 68% Europe
22 investors: 50% US, 50% Europe

Timeline: 2002, London office
2011, San Francisco office

Geneva to London

Index Ventures was founded on the vision of backing Europe’s best entrepreneurs, pioneering the Silicon Valley model of investing across the continent. Each of Index’s three co-founders had both studied and worked in the US previously, although they all lived in Geneva, Switzerland.

Sourcing pan-European investments required significant travel, as no single hub dominated. Geneva is centrally located on the continent, so Neil Rimer and his co-founders optimised for personal network and support base.

Five years later, Danny Rimer (Neil’s brother) joined Index after having spent years immersed in the US tech ecosystem. Danny’s arrival was the catalyst for opening a London office. Being in London positioned Index in Europe’s emerging tech hub, with the deepest ties to transiting US entrepreneurs and investors.

Decision to Expand to US

Nine years later, Index had established a leading position in European VC, and the offices in Geneva and London were in balance. The firm set its sights on building a permanent presence in the Valley, even though this was not part of the original vision.

If you are competing in the top quartile but not playing in the US, you are at a disadvantage.

Neil Rimer

Index was already making 30% of its investments in the US, and Danny was spending one week a month on the West Coast. Expansion would broaden investment opportunities, and allow the team to better serve their internationalising entrepreneurs.

Portfolio companies needed our help, and whilst we had the network, it was tougher to leverage from Europe. For example, helping Skype to hire a US GM.

Danny Rimer

Mike Volpi, who had joined Index in 2009, expressed an interest in returning to the US. Between Mike and Danny, there was a pairing which could transmit both the formal business processes, and the informal cultural DNA, needed to make the leap.

Deep US Commitment

Index planned with a ten year horizon in the US, to bring it to the same level of competitiveness as in Europe. Ensuring that the European team appreciated the level of investment for US success required constant attention.

If Mike and I had not moved, it is unlikely we would have kept faith with our US expansion. Our personal commitment made everyone aware of how important it was to win.

Danny Rimer

Nine years in, the SF office headcount matches London, and the Index portfolio is evenly balanced between the US and Europe.

Until 2018, it was like ‘the jury is still out on whether the US will really work out’. It was only in 2019 that it became obvious.

Danny Rimer

Brand Position

Adapting from market leadership in Europe, to challenger brand status in the US, required localisation of both strategy and messaging.

Much of the communication had to be ‘translated’, including media relationships and marketing hires.

There’s a lot of noise out here. You need to make a lot of effort, both time and money, to stand out.

Mike Volpi

The US team did not initially have access to enough quality Series A deals, so focused on Series B. Achieving a marquee investment by leading Dropbox’s Series B (October 2011) gave them the initial credibility they needed.

It put us on the map - everybody knew Dropbox. It was the US equivalent of our European investment in Skype.

Danny Rimer

They located the office near Dropbox in San Francisco, rather than on Sand Hill Road in Palo Alto, which was an immediate differentiation from other VCs. They invested in taking out a lease and hiring an architect, to build a space that truly communicated Index’s culture and design aesthetic.

We don’t have a product - our product is us. So how we present ourselves is critical. But a good question for any founder to ask themselves is ‘what is our marketing edge?’ when they go international.

Danny Rimer

The need to present a professional face led to hiring two highly experienced EAs from the outset, who were able to maximise Danny and Mike’s efficiency.

Leveraging their newcomer status created co-investment opportunities with local US VCs, who found Index less challenging to their brand than other competitors.

Success metrics included association with household brand names, such as Dropbox, and what calibre of talent was saying ‘yes’ to joining. Only later did the metrics converge with Europe - how many top Series A opportunities were being seen, and being won, relative to competitors.

Nine years on, and with a stronger brand position in the US, Index has come full circle, with a more unified story in both continents.

We’ve achieved a lot in the US now. But in hindsight, it has taken longer because we were too timid - we should have scaled the US team with local hiring more rapidly than we did.

Mike Volpi

Communication

Despite internationalisation, Index was determined to remain ‘one team’ (which remains a core Index value), avoiding any sense of HQ, or hierarchy between offices.

Even though the US team was smaller to begin with, Index invested in quality experiences, on par with Europe. There was a lot of communication to ensure that those in Europe understood the need for this investment.

For our first Christmas in SF, there were only four of us, but we went for a beautiful dinner at Hakkasan to make sure the team felt valued.

Danny Rimer

The team had to begin formalising processes for internal comms. They moved Monday partner meetings and company pitches to later in the European afternoon to balance the pain with the SF team, and stepped up responsiveness to calls and emails. They avoided disuniting language such as “West Coast [or Europe] are thinking this”.

Over years, detailed best practice emerged around video conferencing (see earlier breakout box for details). But relationships are built face-to-face, so the full partnership also meets in-person five times each year, shifting locations each time.

It’s like a battery charge. Video-conferencing can extend your battery life, but the only way to recharge is by spending time together in-person.

Mike Volpi

Appendix

Glossary of acronyms

ACV

Annual contract value

AE

Account executive

AM

Account manager

APAC

Asia Pacific

ARR

Annually recurring revenue

BDR

Business development representative (alternative to SDR)

CHRO

Chief Human Resources Officer

CPO

Chief Product Officer

DACH

Germany (D), Austria (A) and Switzerland (CH)

EC

Engineering Centre

EMEA

Europe, the Middle East and Africa

EVP

Executive Vice President

G&A

General and administrative (HR, legal, finance, travel, and premises)

GTM

Go to market

ISO

Incentive stock options

JAPAC

Japan and Asia-Pacific

KPI

Key performance indicator

LatAm

Latin America

MEA

Middle East and Africa

MVP

Minimum viable product

NPS

Net promoter score

PEO

Professional employer organisation

PMF

Product market fit

RSU

Restricted stock unit

SDR

Sales development representative (alternative to BDR)

SE

Sales engineer

T&E

Travel and expenses

TAM

Total addressable market

USCIS

US Citizenship and Immigration Services

VPBD

Vice President Business Development

WoM

Word of mouth (marketing)

YoY

Year on year

Thank you

We would like to extend a special thanks to Wilson Sonsini, and to Angular Ventures, for sharing expertise, content, and data.

Dan Glazer
Partner

Wilson Sonsini Goodrich & Rosati

Gil Dibner
General Partner & founder

Angular Ventures

Anne Blum
Head of Platform

Angular Ventures

Contributing startups

Name Organisation

Abakar Saidov, CEO & co-founder

Beamery

Adi Azaria, Chief Evangelist & co-founder

Sisense

Alexey Sapozhnikov, CTO & co-founder

prooV

Alexis Alexander, General Counsel

Liberis Group

Amaan Nathoo, Former US Expansion Lead

Spendesk

Amiad Soto, CEO & co-founder

Guesty

Amiram Shachar, CEO & founder

Spotinst

Andreas Cleve Lohmann, CEO & founder

Corti

Andrew Butt, CEO & co-founder

Enable

Andrew Robb, Former COO

Farfetch

Andy Byrne, COO

H4

Anne Blum, Head of Platform

Angular Ventures

Anne Mellano, co-founder

Bestmile

Antoine Rostand, President & founder

Kayrros

Augustin Marty, CEO & co-founder

Deepomatic

Avinoam Nowogrodski, CEO

Clarizen

Benoit Grouchko, CEO & co-founder

Teemo

Cameron Stevens, CEO & co-founder

Prodigy Finance

Caro Van Rompaey, CFO

Cashforce NV

Charles Delingpole, CEO & founder

ComplyAdvantage

Christian Nentwich, CEO

Duco

Christophe Collet, CEO

S4M

Christophe Pasquier, CEO & co-founder

Slite

Clare Flynn Levy, CEO & founder

Essentia Analytics

Clint Smith, General Counsel (former)

MySQL

Daniel Dines, CEO & founder

UIPath

Daniel Ek, CEO & founder

Spotify

David Casellas, CEO & co-founder

Pridatect

David Helgason, Former CEO & founder

Unity Technologies

David Polonsky, Head of Americas

FundApps

Diego Meller, Co-CEO & co-founder

Jampp

Ditlev Bredahl, CEO & founder

OnApp ltd

Donal Smith, Chairman & co-founder

Credit Benchmark

Dorian Selz, CEO & co-founder

Squirro

Doron Gordon, Former CEO & founder

Samanage

Dror Davidoff, SVP Strategy

Aqua Security

Eamon Jubbawy, COO

Onfido

Efi Cohen, CTO & co-founder

Datorama

Elad Gelman, Mobile Engineering Lead

Honeybook

Eldad Farkash, CEO & co-founder

Firebolt.io

Erwin van der Vlist, CEO & founder

Speakap

Fabrizio Perrone, President & founder

Buzzoole

Felix Ewald, CEO

DyeMansion GmbH

Felix Van de Maele, CEO & co-founder

Collibra

Francois Grenier, Head of Tech Partnerships

Typeform

Fred Simon, Chief Architect & co-founder

JFrog

Fredrik Kekalainen, CEO & founder

Enevo

Gero Decker, CEO & co-founder

Signavio

Gil Dibner, General Partner & founder

Angular Ventures

Gil Sadis, VP Product

Lemonade

Ian O'Rourke, CEO & founder

Adthena

Ignasi Vilajosana, CEO

Worldsensing

Ingo Uytdehaage, CFO

Adyen

Isabel Osborne, Commercial Projects

Flatfair

Ishay Green, CEO & founder

WonderLabs

Jakob Freund, CEO

Camunda

James Hirst, COO & co-founder

Tyk

Jarlath Doherty, Chief People Officer

Collibra

JB Rudelle, Chairman & Founder (former CEO)

Criteo

Jennifer Williams, Chief of Staff

Oden Technologies

Jesper Theill Eriksen, CEO

Templafy

Joaquim Lechà, CEO

Typeform

Joe Cross, Global Marketing & PR

Transferwise

Joe Scarboro, COO

The Bot Platform Ltd

Joel Passen, Former Head of Global Sales

Beamery

Jon Cornwell, CEO

Newsflare Limited

Jonathan Klein, Chairman & co-founder (former CEO)

Getty Images

Joshua Jian, Head of Corporate Development

Credit Benchmark

Kalle Kilpi, Chief Solutions Officer & co-founder

Midaxo

Kevin Tumulty, CRO

Nexthink

Kyle Polischuk, Global VP People

Moo

Lior Akavia, CEO & co-founder

Seebo

Lior Sion, CTO & founder

Bringg

Lukasz Panek, Financial Controller

Veeqo

Mårten Mickos, Former CEO

MySQL

Mary Beth Vassallo, VP North America Sales

Nexthink

Matt Barker, CEO

MPB

Matt Hicks, VP, Executive Communications for the CEO

Zendesk

Maya Pizov, VP Business Development

enSilo

Micha Y. Breakstone, GM Israel & co-founder

Chorus.ai

Mikael Kolehmainen, CEO & co-founder

TrademarkNow

Mikkel Svane, CEO & founder

Zendesk

Nelson Nahum, CEO & co-founder

Zadara Storage

Nick Denaro, HR business partner

Nexthink

Nicolas Grenié, Developer Advocate

Typeform

Nick Peters, VP Operations

Ardoq

Nick Rose, CFO

Enable International Inc

Nicolas Marchais, Sales & Revenue Director

Spendesk

Nicolas Dessaigne, Former CEO & co-founder

Algolia

Nicole Reader, CEO & President

The Modern Mirror inc.

Ohad Hagai, SVP Marketing

Namogoo

Omer Gal, VP Marketing

Altimo

Omer Gotlieb, SVP Business Development & co-founder

Totango

Omer Regev, CFO

Nym Health Ltd

Omri Cohen, COO & co-founder

Yotpo

Oren Raboy, VP Engineering & co-founder

Totango

Oyvind Henriksen, CEO & co-founder

Poq

Pedro Bados, CEO & co-founder

Nexthink

Pedro Monteiro de Barros, VP Strategy & Operations

Codacy

Peter Aschmoneit, CEO & co-founder

quantilope

Peter Bauer, CEO & co-founder

Mimecast

Peter Hames, CEO & co-founder

Big Health

Peter Holten Mühlmann, CEO & founder

Trustpilot

Peter Kromer, Senior Manager of Business Strategy

AImotive

Phil Thorne, CFO

Quorso

Piero Zucchelli, President

Andrew Alliance

Pierre Betouin, CEO & co-founder

Sqreen

Ran Peled, VP Marketing

Trigo

Rani Osnat, VP Marketing

Aqua Security

Riccardo Zacconi, Former CEO & founder

King

Richard H Harris, CEO

Ensygnia

Robert Muñoz, Co-founder

Typeform

Robin van Lieshout, CEO & co-founder

inSided

Rodolphe Ardant, CEO & founder

Spendesk

Rodrigo Rodriguez, CEO

Odilo

Roey Brecher, CTO & co-founder

Wiser

Ronan Higgins, CEO & founder

TVadSync

Roope Heinilä, CEO & co-founder

Smarp

Rory Donnelly, CEO

digi.me

Sacha Herrmann, CFO

Nexthink

Samir Desai, CEO & co-founder

Funding Circle

Simon Cobby, VP Corporate Development

Moo

Slavik Markovich, CEO & founder

Demisto

Stefan Lederer, CEO & co-founder

Bitmovin

Stefan Sulistyo, Chief Customer Officer & co-founder

Alyne

Stephane Kurgan, Former COO

King

Steve Dunlop, CEO & founder

A Million Ads

Teun van den Dries, CEO & founder

GeoPhy

Tom Livne, CEO & co-founder

Verbit

Tomer Michaeli, COO & co-founder

Fundbox

Tomer Tagrin, CEO & co-founder

Yotpo

Uri Levanon, Former VP Global Brand Partnerships

StreamElements

Willem Sundblad, CEO & co-founder

Oden Technologies

Willem Wellinghoff, Chief Legal and Compliance Officer

Shieldpay Ltd

Wim Van Hecke, CEO & co-founder

icometrix

Yair goldfinger, CEO & co-founder

AppCard

Yair Halevi, Chief Scientist

SundaySky

Zack Zigdon, MD International & co-founder

Innovid

Zia Yusuf, CEO & co-founder

Velocity

Contributing service providers

Name Job Title Company Sector

Camilla Velasquez

SVP, Head of Product Strategy and Marketing

Justworks

PEO

David Ives

Partner

True Search

Recruiter

Diana Okoeva

Partner, Head of Immigration

Clintons

Law firm

Gigi Panico

Independent

Relocation

Kat Manalac

Partner

Y Combinator

Investor

Malcolm Joy

Lead Partner

Frazier & Deeter

Tax advisor

Mannie Gill

Founder & Partner

Renovata Partners

Recruiter

Mike Whitacre

Partner

Frazier & Deeter

Tax advisor

Nirvano Brans

Vice President, Global Head of Sales

Papaya Global

PEO

Pat Haggerty

Partner

True Search

Recruiter

Paul Samartin

Managing Partner

Samartin & Friends

Immigration specialist

Rick Bank

Partner

True Search

Recruiter

Contact

Index Ventures

3 Burlington Gardens
London W1S 3EP, UK
Telephone +44 20 7154 2020

139 Townsend Street, Suite 505
San Francisco, CA 94107, USA
Telephone +1 415 408 7900

indexventures.com

Copyright © 2020 by Index Ventures.
All rights reserved.

Contributions and insights from the Index Ventures Investment, Legal, and Strategist teams.

Researched and written by Dominic Jacquesson, VP Insight at Index Ventures.

Co-researched with Zheela Qaiser. Additional research by Darvesh Daswani.

The information provided in this handbook, in particular chapter 8, is a general guide and specific legal and tax advice should be sought when implementing corporate and HR arrangements.