How to fundraise & secure capital in the US, with Jorian Hoover

Anthony Rose: Hello! I’m Anthony, founder at SeedLegals, and I talk to lots of startup founders, and many people are saying, you know how hard it is to find investors, and they’re often looking in the UK. And there’s a belief that if you look in the US, where, if you read TechCrunch, the valuations are crazy. There’s tons of money around. It’s going to be much easier to find money in the US.

And then founders go and look to US investors. And it turns out US founders have got exactly the same problems. So today I’m going to be talking with Jorian, who is an expert at finding investors and principally finding US investors to get to the bottom of: should you look for investors in the US? How to find investors in general? Is the grass greener on the other side of the ocean? And what things to do next. So, Jorian, over to you.

Jorian Hoover: Yeah, hey everyone. Thanks so much for taking time out of your busy schedules today to join us. I’m Jorian Hoover. I like to call myself a startup fundraising sparring partner. I work with founders mostly in the US, but also in US and Europe, and help them with their preparation for their fundraising rounds. So I really believe that if you have strong preparation and you run a tight process, that can help you run a better fundraise. And I’ve worked with quite a few European and UK founders who have sought funding from US investors. So I’m really excited to talk about this topic with you today.

Anthony Rose: Okay, so let’s start with the general problem. You want to find investors. So people come to you for looking for help to find investors. Tell me the top problems that you see when somebody thinks, “Yes, I’m ready to find investors,” and it turns out, dude, sorry you don’t have a business plan, the deck’s no good, I don’t understand what you do. What are the key things to overcome before you go looking outside the UK?

Jorian Hoover: Yeah, regardless of what stage you’re fundraising at, but especially at the early stages, I really recommend founders figure out, you know, what are the 3 to 5 reasons why an investor would invest in you? You know, for some people that’s just a remarkable team and you have industry experience. For other people, that’s a really special market. But in any case, you know, a lot of investors these days really want to see some kind of an MVP, some kind of a product that you’ve actually got started. And so I would really try to figure out, you know, what are those 3 to 5 main reasons why someone would invest in you. And once you have those, then you can start to look for investors.

Anthony Rose: Okay? And I think you’ve hit the nail on the head for the rest of our discussion, which is often when I’ve seen people looking to fundraise in the US, it’s because they’ve tried to fundraise in the UK and gotten, you know, the refrain that we always get from VCs: “Love what you’re doing, come back later,” or “Valuation’s too low,” or just no interest. And you’re not sure if you put that down to just mere UK investors, and if you looked elsewhere it would be better, or whether there’s something fundamentally wrong. And when I say fundamentally wrong, that just means things to improve on, rightly, and our goal of this session is to dive into those things. And I think what I’ve seen is when I see in founder chat groups and so on, people being unhappy with UK investors and then looking to the US, and I wonder, are they going to be posting in two months’ time that they’ve got the same issue in the US or not? So let’s go through some of these things that you see. Indicating, you know, you’re an investor, you get an outreach from someone—and we’ll get in a minute to how to do that outreach—what are the things you see for your customers as indicating, “Not quite ready yet. I don’t understand it.” And let’s pick the top 3 or 5 of those, and then dive into what you can do to improve on that.

Jorian Hoover: Just to make sure I understand the question: top 3 or 5 reasons why an investor says “not ready yet”?

Anthony Rose: Exactly, or somebody coming to you with what they think is a great pitch deck, and actually that’s where it needs work.

Jorian Hoover: Hmm. Yeah, so on the material standpoint, I would say what I see most often is the materials feel more like an essay or, you know, making kind of 12 to 15 different points, as opposed to a very clear and simple reason why someone should invest in you. I’ll say, even for much, much larger rounds, right? When someone’s raising 100 million dollars—even then—it still comes down to a very simple story. So when you’re raising a few hundred thousand or a couple of million, you really need that simple story. So that’s number one.

Number two, I would say is, you know, you need to have a key reason why you are different. I think I meet with so many founders where, you know, I see yet another social app, or yet another Uber for X or something. And it doesn’t mean that’s not possible, but I always encourage founders to look at not only what does the competition look like today, but what is the graveyard of startups that has tried this before? Right? And why did they not succeed? And why will you be different? So those are a couple of the reasons that kind of stand out.

Anthony Rose: Okay, all right. So thank you. And I have to say, when I see decks, they’re often too many words, and people have got no attention span. They glance at the top, so let me spend a few minutes on the art of storytelling.

Anthony Rose: …So I like, and I’m sure on your side you’ve seen the slide deck. You know, I liken it to a Netflix episode. The goal of it is to get you to watch the next episode, and by episode 3 or 4, there’s a check involved. But you want to get the person coming along, and it starts with your investor outreach, where you’re not going to send them a slide deck on your initial email, because, like, dude, where did this deck come from? So you want to reel them in with some sort of warm message that’s crafted so they know it’s sent to you.

So a lot of people write to me, and if they write—and often looking for a job—and if it says, “I’d like to work at SeedLegals,” it’s like, okay, how’s it different? But if someone writes to me and says, “Anthony, I’ve watched one of your videos. And in it you spoke about this. And actually, I share that. And I’ve been thinking about that. Can I talk to you more about it?” You naturally want to engage.

So thing one is crafting that outreach to the investor. And then thing number two is a few sentences that will hook you in to get the investor to go, yes, let’s get on a call or get the pitch deck. But the pitch deck itself—often you’re going to, you know, the standard literature says, create a deck which has…

Jorian Hoover: Yeah.

Anthony Rose: …Problem solved. How are you solving it? You know, market size. Do not put literally the names of the slides of “Problem,” “Solution,” “Market Size.” Create something that tells a story. Something is broken. We’re fixing it. It’s a huge market. Meet the amazing team. How we plan to make money—instead of saying, you know, “subscription” or “business model,” say, “here’s how we’re monetizing.” You know, we’re raising. And then each slide has bold graphics and a single key theme to it.

In your slides you’re also going to think about, is this a slide deck that I’m using as a standalone, or am I narrating it when talking? So any thoughts on how you’re going to help founders when they come to you, you know, turn potentially a deck with too many words into a deck, with bolder, bigger vision and story?

Jorian Hoover: Yeah, a couple of comments there. And just on your email example, like, I completely agree. You want to have a little bit of personalization up at top.

And then one other really important thing when you’re emailing an investor—or even when you’re getting a warm intro and someone’s forwarding it on your behalf—is you want then a few bullets of just what is the startup? You know, and some of the basics. Like, I’m amazed how many times I do get some of that personalization, but then I get, you know, someone goes into their life story, and it’s really hard when you get a bunch of startups sent your way to understand, okay, what is this, right?

Then on the pitch deck side of things, I think how you turn it into a story is you want to start kind of unconstrained from the slides. So I think a lot of people get into kind of like slide hell. They’re making little edits here and there. I actually recommend starting on like a Google Doc or something, and just writing out numbers one through twelve for your slides, and write kind of like, what are the titles of these slides? What are the one or two sentences that are the key takeaways you want an investor to have?

And when you read through those one through twelve, does that read like a story? Because that’s the order someone’s going to go through it in. And if it does, okay, now you can start making the slides to help support that. And obviously they should be well designed. But if not, then you want to go back to the drawing board and really go back and simplify that story.

Anthony Rose: Okay? And I like that. And that matches what I often see, which is, you talk to a founder and you say, what are you working on? And there’s this amazing, inspiring, and short story: “My grandmother had this, and it really affected us. So we grew this. And I’m, you know, I’m a PhD in this from Cambridge,” whatever, and we create—and then you look at the slide deck and it says, you know, “Changing medicine” and something, and you just drown in words.

So I think a nice thing is to, you know, say it’s the story as if you tell it to somebody. Obviously, you’re not going to show TAM, SAM, and SOM, but to the extent it can be a story.

Now I’m going to take a slight diversion and talk about when you are doing a pitch on a call to an investor. What you triggered is, I think, a common problem, which is people just reading their decks. And I was at an event the other day which was covering exactly this.

So let’s spend a moment or two: you manage to get an investor’s interest, and you manage to get on a call with them, and you’ve probably got 30 minutes on a Zoom call or in person. And the standard problem that I see—and when I get on a call with people as well, telling me about their slide decks—is they will go through all 20 pages and kind of like, read it.

You’ve got a couple of problems. Firstly, you haven’t got any information from the investor upfront to help you tailor the story you’re telling them. Number two, at the end of the call, you’ve taken the entire call going through the deck, and there’s no time for questions, and that’s where the real action happens. And number three, in a sense, you’re perhaps correct, but maybe insulting them slightly that they haven’t read the deck—because an astute investor would go, “Dude, I’ve read the deck. You don’t need to go through this.”

So what you want to do is try and use no more than a third of the total meeting time to go through the deck. So what I would do is start by engaging conversation with the investor. Ask them what’s interesting to them, what sectors they want, and don’t feel shy to do it. I think it creates a sort of power play in the right way where you are driving a little bit.

So when I got on a call with an investor, I discovered after many investor calls, I spend all this time pitching. At the end they go, “That looks great. You know, we’re a follow investor, by the way, so when you’ve got a lead, call us.” And I go, I’ve just wasted like half an hour. There’s no point trying to close this investor because they’re waiting for a lead.

So what I now do very quickly, I say, “Great. I’m Anthony from SeedLegals. We do this. Tell me a little bit more about your investment thesis so that I can tell you a story that relates to that.” And then ask them, “By the way, are you a lead or a follower?” And if they’re a lead investor, awesome—I’m going to do whatever I can to try and get interest right then. And if it’s a follow, it’s like, “Okay, great. When I’ve got a lead, I’m going to get back to you.” And I know it’s, you know, two or three episodes later they might re-engage.

And then I might do a product demo. I might go through the deck very quickly, assuming that they’ve read it beforehand, and then spend, you know, 10 minutes at the end in Q&A, where you’ve now got an engaged conversation, rather than, you know, before they can ask anything, it’s all over.

So your thoughts on how you might construct the deck or the presentation with the investor along those lines?

Jorian Hoover: Yeah, I think you’re right. I can’t tell you how many founders come to me and they say, “Jorian, I was really expecting to go through the slides in that 30-minute meeting with an investor,” and the first thing the investor says after “Hey, nice to meet you” is “Oh, yeah, already went through the deck—can I just ask you some questions?” And that completely throws off the founder.

So I think on the pitch deck front—and this is more my recommendation, you’ll hear different advice out there—I recommend having a versatile pitch deck that works both in a read mode as well as a meeting mode. Because otherwise I think what happens is you can start to have four or five different decks that you’re having to make edits to every time there’s a change required.

So I think that’s one thing that helps. The second thing is, back to what I said earlier around knowing what are those three to five kind of core reasons an investor wants to invest in your business. And if you listen to Y Combinator talk about this, they’ll call these the fundraising kind of vertebrae. What is the backbone of your fundraise?

Even if you’re off the pitch deck and investors are just asking you questions, you should be returning to these three to five reasons, right? And not start going off in all sorts of different directions. Because otherwise it might be an interesting rabbit hole, but you might lose the investor on what is the real reason why they should be investing in your startup.

Anthony Rose: Okay. So in your mind as you’re presenting, I think what’s important is the—you know, there’s the IQ and there’s EQ, the emotional quotient—and I think you want to be… it’s a bit more difficult on a Zoom call to suss out whether the story you’re telling is resonating or boring. And so, you don’t want to be talking at the investor for half an hour. You want to be engaging. And if you can see that they’re distracted or that they’re not getting it, this is time to pause and take a step back and go back to the fundamental problem.

Or maybe, you know, some people love the details. Some people want to go more in one direction, and some are like, “Dude, just get to the big story.” So tailoring what you’re saying based on the audience.

Now, we’re going to switch to the key topic that we’re discussing on this call, which is US investors. So we’ve spoken about the general art of the pitch. And now what’s specific to US investors? So talk to me about the scale of the US and what US investors are looking for that’s going to be the same or different to UK investors.

Jorian Hoover: Yeah. So I was pulling up some data right before this conversation. And when we just think about the scale of venture capital in the US versus the UK—I looked at one quarter last year—and in a quarter there was about $3.9 billion of venture capital activity in the UK. And there was $44 billion of activity in the US. So in terms of magnitude, it’s about 10x larger.

You know, I think that comes with historical reasons. Silicon Valley is named Silicon Valley for a reason. You have these silicon manufacturers from 50–60 years ago—that was the birthplace of venture capital. And so with that, you really have a ton of VC firms in the US that are often operating slightly larger funds than their UK counterparts.

And one other interesting thing I looked up right for this call was actually—about a third, from what I could tell—a third of UK kind of VC investment actually came from US investors. So it is decently common for US investors to invest in the UK.

Anthony Rose: Okay. So, I mean, the amounts are larger. But of course there are also a lot more companies competing for those amounts, so that may not really help. So here’s what I found, which is just taking a step back. I think there’s always a bigger fish in a bigger pond elsewhere.

So when I look at startup founder discussions, people in Eastern Europe are looking to perhaps expand or move to, you know, France or Germany. And people in France or Germany are often thinking, “Oh, the UK—that’s… there’s way more money in the UK.” And in the UK, we’re looking across the pond at the US. And then, now that I’m in New York, I discovered that people in New York are going, “You know, all the big money is on the West Coast.” So there’s always a bigger fish.

But I think what’s important here is to understand what’s going to drive investors in the US, what’s going to get them interested in you, and also who you’re competing against.

So here’s my data point, which is: now that I’m spending time in New York, I talk to lots of founders there. And it seems that the amounts people are raising is somewhere maybe about 4x the amount that people are raising in London, which is always disappointing. Here, we’re doing our £250k SEIS round, and there they’re raising a million dollars happily, at a similar stage.

One reason to know is that salaries in New York are probably about 2x London size. So you have to have a lot more money, or you’re not going anywhere. But it is slightly envious to see that there’s more.

And one reason why the amounts raised are larger is because the US is a much larger market. So investors in the UK see initially your goal is, you know, UK market domination—and that’s yay big. And then investors in the US go, well, if this works, we can have a way bigger market. Your costs are going to be higher. You’re going to spend more on marketing because you have to go East Coast, West Coast, a bit in the middle. And so there’s more money with an expectation of a large growth.

And this comes down to—that’s the key part that you need to figure out in order to attract US investors. I think you have to be talking a bigger story. You have to be talking the bigger markets in order to tap into that. Because if it’s the same ambition, then you’re not going to get the same valuation and multiples as you’re seeing in the US.

So, over to you.

Jorian Hoover: Yeah, I think you’re completely right. You know, yes, there is a decent amount of US investment happening in the UK. But one of the most common questions I get from UK founders is like, “So… can I just raise from the US?”

And the truth is, you know, it might be possible. But there’s a few things that absolutely need to be true—and maybe we’ll get into some of those—for US investment to make sense.

I really like what you said around “it’s a bigger pond, but there’s also bigger fish.” Very commonly, you know, you’ll be the startup for X in the UK, but there’s six of those startups in the US that are better funded than you and have better scale. And by the way, maybe the US market’s looking for something different.

And so it can very much be possible. I don’t want to say—the last thing I want to say is, you know, negative, you can’t do it. But sometimes there’s too much of an optimism as well on the other side.

Anthony Rose: Okay, all right. So now let’s look at different company stages and sizes, and when it makes sense to do different things US-way. And let’s put it in a few different groupings.

So we’re assuming for the purpose of this that you’re some UK founders based in the UK, and you now want to:

Thing one: expand to sell your product in the US.

Thing two: you want to raise investment from US investors into your UK company.

Thing three: you want to actually create a US entity and have that as the main structure and do what’s called the Delaware Flip—so you’ve now got a US topco, and then raise from US investors.

So let’s put that as the three things and what makes sense to do at different stages, and I’ll have a go for that first, and then I’ll hand over to you.

So the first thing is, you’ve got your team, you’re in the UK. Some products are very local—I mean, if you’re shipping things physically, or like SeedLegals is legal contracts, it’s kind of like English law, it’s going to be different. But some of it might be a social network or some kind of calculator for something, or an AI thing, and it’s global. All you have to do to be in the US is turn it on in the App Store or, you know, get some web traffic and you’re good to go.

But of course, unless you’re marketing, unless you’re developing the market, you’re not going to get any traffic. So thing one is, you might want to start hiring people, expanding in the US. And now you’ve got US traction, which is going to excite US investors.

The next step might be, you now want to raise from US investors. And remember: US investors are unlikely to invest unless they see US traction. And the reason is that they get thousands of founders coming to them in the US. And you’re competing with all the people coming to them for investment in the US. And all the people coming to them speak in a pitch in the same way, have got Delaware C corporations, so they know the legals, the American investors will get their QSBS tax relief—which is not as good as SEIS, but that’s their local equivalent: no capital gains tax if they keep the shares for 5 years if it’s a C corporation. And they’ll all be targeting that US market and the US investors are familiar.

So when you come along from the UK, you’re competing with all these other people. You’ve got a sexy British accent, but maybe that will count for something, maybe not. But there’s going to be friction because it’s English law. They don’t understand the market. You know, different fundraising. They’re not sure whether there’ll be SEC or tax issues on investing in a UK company. So there’s more friction. And the way you’re going to overcome that friction is by showing—at least on an equal footing—that you’re targeting the US market with the same ambition and scale.

So thing number two is raise from US investors—and we’ll get to at what stage it makes sense to talk to them—into your UK company.

And thing three is: at the point it makes sense to either, right at the start, incorporate in Delaware and not even incorporate in the UK at all, or do what’s called the Delaware Flip—create a US topco, and now you’ve got a Delaware company and you’ve solved the problem for US investors of English law. You haven’t solved the problem of, “I’m in the US and targeting the US market with US plans,” and you’ve also created maybe an unwanted side effect: that if you are in the UK, the reality is a good fraction of your investors are likely to be UK investors.

And what many people don’t know is you can raise SEIS and EIS into a Delaware company. That used to cost tens of thousands of dollars, and my goal is to make that a completely commoditized thing so that 12 months from now, maybe a good fraction of all startups are just creating Delaware companies.

I haven’t decided if that’s good or not. But I want to, you know, on calls like this, explain it to give everyone, you know, optionality.

So now let’s go back to you—because I’ve been doing the talking—on when you think people should be eyeing US investors and what they should be doing to attract them, given, you know, the additional friction.

Jorian Hoover: Yeah, and I like how you broke it into those different buckets, right? Because there’s different decision points—like at the very inception of the company, do you need to create a Delaware corp or not?

I think if we were having this conversation in 2018 and you were a top founder in the UK, the conversation would look a lot different. I would say more strongly then, “Yes, you really should consider that Delaware corp.” But now, where we’re sitting in 2025, you know, almost every US VC that has invested internationally is very used to investing into a UK company. And so I don’t think having a Delaware company is necessary. Of course, you know, you want to get legal advice—go to SeedLegals or elsewhere on that decision.

The one exception might be, you know, if you’re going to be a lot more a US business than a UK business, then that could make more sense. Or if you’re physically going to be there.

In terms of looking for US investors—if you’re a UK founder and you’re a UK company—I’d split it into maybe two different scenarios.

Scenario one is kind of as you described, right? So if you have kind of US traction, or members on your team that have led a US business, or you have boots on the ground in the US—if some or all of those things are true, I think you start to look a lot more appealing to the US investor. And that’s maybe a good signal that you can go to US investors.

The second category—and I wouldn’t quite say it’s the exception, but it’s more an exception category—is if your startup is truly differentiated from anything that exists in the US, even if you’re UK-only or Europe-only, that can be extremely interesting to a US investor, because now they’re broadening their portfolio of, “I’m now betting on this new AI thing,” or “this new marketplace that exists nowhere else.”

But if there’s copycats around or someone doing a similar thing, then that applies a little bit less to you. And that’s going to be less interesting for a US investor.

Anthony Rose: Okay. So we’ve got some interesting questions in the chat about the Delaware Flip and so on, which we’ll get back to. But I want to pick your brains a bit more on how to now find those US investors, right?

So regardless of whether you’re planning on actually expanding to the US or flipping to a Delaware company and all the other complicated things—you’re just fundraising and you need to find investors. And you’re doing LinkedIn outreach. We’ll get to the things you might be doing. Should you be targeting, you know, US investors as well as UK ones? What are you going to do differently when you pitch to them? What are the things they’re looking for?

So let’s start with: how are you going to find them? Right? And as always, that falls into angels and VCs. And can I put you on point for some top tips there?

Jorian Hoover: Yeah, absolutely. So, yeah, angels or VCs—typically you want to decide what’s your focus, right? At least in the US context, if you’re doing under a million dollars, that’s typically when you want to rely more on angels. And if you’re doing over a million, that’s when you want to rely more on VCs.

I will say one thing that’s very common among top rounds is—let’s say you’re raising $2 or $3 million—it’s very common for a founder to raise the first few hundred thousand of that from angel investors, which starts to build that kind of excitement, etc.

But anyways, let’s say you’re building a VC list. What is the problem? The problem is not finding names of VC investors. There are so many lists floating out there. It feels like every day on LinkedIn I’m getting new lists of VCs. There’s lots of different resources, there’s great websites, you can talk to other people. So the problem isn’t, you know, getting VC names.

The problem is more: how do you get a curated list that makes sense for you and your startup—not someone else’s list, not something you just found on the internet?

And how I recommend founders do that is you kind of take in these different sources, right? So yes, you go to some of those lists that are out there. Maybe you sign up for a free trial of Crunchbase. You ask other founders. A website that I really like—I’ll put it in the chat here—is vcsheets.com. It’s really good for US investors.

You go to those sources and based on your industry, what amount you’re raising, you make a big list. And this is where the tedious work can really help you out. You go investor by investor, go on their website, and try to understand: is this a good fit for you?

And then I recommend founders try to get that to a list of 125 investors. I know that sounds like a lot, but I think once you’ve done that step, that allows you to then get into that process of: how do you get in contact with them? How do you run a process? More of those fun things.

Anthony Rose: Okay, all right. So one of the things I’ve seen in my dealings with UK and US funds in particular is the US ones are way more switched on. They run their investment things like my sales team runs a sales operation.

They use HubSpot. They do outreach. If you tell the investor “It’s premature, let’s talk again in August,” you can bet on August 1st you’re going to have an email in your inbox going, “Hey, just following up, circling back,” whatever it is, from our last call.

Jorian Hoover: “Circling back from Italy,” yeah.

Anthony Rose: “Circling back” is, you know, it’s American. So they are just way better at sales comms. They run it like a proper operation as opposed to a bit of a hobby. And I think that’s one of the many things that puts, you know, founders off UK investors.

And I have to say, over the weekend, somebody I know asked me to make some warm intros—gave me a list of six people, six investors to reach out to—and three of them were in the US and three in the UK. And on Sunday night when I reached out, the three in the US got back to me saying, “Interesting, please make an intro, send me a deck,” and so on. And the three in the UK—no one responded.

And I think that epitomizes that US ones just kind of… they run it as a serious operation. And people find that kind of off-putting on the UK. I’m not trying to make any judgment on it, but it is fascinating to see how professionalized the fundraising piece, I think, is in the US. And you should run with that.

Now, one other data point from my talking to founders in New York—and coming back to your point about what are the stages of fundraising—is, I think it goes in these stages, and it’s a little different to the UK.

Anthony Rose: So I think it goes in these stages, and it’s a little different to the UK, which is: as you say, raise $100,000—friends and family, usually very unstructured, using SAFEs. Often founders don’t know the way those YC post-money cap SAFEs convert. Sometimes they make terrible problems that cause them dilution later. Sometimes they get it right.

So there’s no concept of a lead investor—just like, you know, doing an SEIS round, you’re going to find angels: 10k, 5k, 20k, and raise with SAFEs.

Then the next step might be raising a million dollars, which is going to be not dissimilar to our £250k SEIS round. And there, you know, a million dollars is quite a few angel investors, so it’s probably going to be a lead investor.

Often what’s going to be interesting is: some founders find that they can send out SAFEs and people will invest immediately with SAFEs, and others will find that people will only invest when they found a lead investor. So they have to—everyone says, “Yes, I’m in! Yes, I’m in! Send me a SAFE,” but “Wait until you’ve got a lead and then I’ll come in.” So then everything’s on hold while they find someone to lead. And that’ll be this sort of $1M pre-seed round, as they call it.

And then a seed round might be $3–5M, which would be equivalent to our £800k round here. And then raising much more substantially from VCs but maybe also filling in with angel investors.

And then you’ve got your Series A, raising quite a few million from VCs.

How does that parallel, Jorian, what you’re seeing?

Jorian Hoover: Yeah, I think it’s pretty closely aligned. I think it depends a lot on the founder, right? But I’ll speak to kind of like, if you’re like a strong founder, what does this look like for you?

In the US, it’s typically you’ll raise $100k–$300k from this kind of friends and family or angel round. And I put “friends and family” in quotation marks because it doesn’t need to be your literally friends and family—but people you kind of know. Right? If Anthony’s getting investment, people who believe in Anthony, know Anthony personally—and they’ll also fill in some angel capital.

Then the next round I see is typically what’s called a pre-seed round. And there’s a whole suite of VCs that have been created kind of last 5–10 years around this round. And honestly, 10 years ago there weren’t even so many people talking about a pre-seed round.

And this is typically $1–2.5M or so, that actually looks a little bit more like a seed round, right? And it’s supposed to give you runway probably for 18 months or so.

And then now either people go directly to a Series A, but more often they’ll go to more of a prototypical seed round, which is, you know, $3–7M depending on sector or what your momentum looks like.

And nowadays, I think when people say seed in the US, there’s a lot more traction that’s expected—often several hundred thousand of ARR—as opposed to, you know, eight years ago, I think seed was more what we might call pre-seed today. So the lingo can often get kind of in the way of this discussion around rounds.

Anthony Rose: Yeah. And I have found people in the US talk much more about sort of the lingo—pre-seed, seed, Series A—than the UK, which is often, “I want an SEIS round, I’m raising £200K,” and you don’t sort of give it a name. The name can cause issues, but also it’s quite useful. When someone says they’re pre-seed, you kind of know they’re in this area—remembering that the numbers are often quite a lot larger. You know, pre-seed is like a million or two million. It’s like, “Oh my god,” or $3M even might be called pre-seed.

Okay, so let’s now still get back to how to find those US angel investors. So are we using LinkedIn outreach? Are we getting investor lists? Particularly if you’re looking for angel investors—any tips or any things that you’re using to help companies find US investors?

Jorian Hoover: Yeah. I’ll say, it’s always tricky with angel investors—I’ll just be honest with that. It’s a lot easier to do the research on VC investors in the US, because, as you said, they’re run like sales organizations and they actually want to be found, the vast majority of the time.

With angels, the best angels are the ones that are coming from your network somehow. And so an exercise that I’ll sometimes do with founders is: I have folks write down, “What are the 4–8 groups or parts of you that make up who you are?” Right? This could be places that you’ve worked at. This could be universities you’ve gone to. This could be community groups you’re a part of. And just think through each one of those groups—who are folks within there that are well connected in the startup ecosystem, and/or who might have the type of money where they might want to make an investment?

They might want to invest $10K, $25K or so. And I was working with one founder on this, and he said, “You know Jorian, I’m only going to come up with 15–20 names.” But when he did this, he actually came up with 100, 150. Not everyone has that, you know, but when you actually think about it in a structured way, I think we know more people than we give credit for.

The other group is, you know, finding that prototypical angel investor who does this as a big part of their life—and it’s part of their career. I think for that, I often tell founders: try to ask other founders in similar spaces, “Which angel investors made a difference on your cap table? Who opened up intros? Who was really helpful? Who took an early chance on you?”

And I think if you ask other founders, that’s often where you can start to get some of those names and connections.

Anthony Rose: Okay, all right. Thank you. Now let’s talk—we’re going to go through some great questions—on alternative funding mechanisms. So let’s—I’m going to go quickly through a few.

Crowdfunding. So interestingly, crowdfunding in the US I think is way less popular than the UK. I always track all my competitors’ traffic—so whether it’s Seedrs or Crowdcube or Wefunder or Republic and so on—and I see the UK crowd companies have usually got more traffic than the US ones, in a market that’s an eighth the size. So crowdfunding per capita is way more popular in the UK.

And the question is: why? I think it got started here a lot earlier. In the US, the SEC rules made crowdfunding really tough for many years, and only now are they being opened up.

But from what I’ve seen and talking to people, crowdfunding is a different concept in terms of target audience in the US and the UK. In the UK, crowdfunding is you open it up and you find a crowd. In the US, it seems to be a legal mechanism of finding a company with the right SEC permissions that let you raise—but from your customers.

So you’ve got the mailing list, you’re going out to customers. In the UK, you probably just send them a SeedFAST. In the US, you may not be able to do that. So you need some regulatory thing. So it’s not as much about just finding random people wanting to invest—it’s often you driving that.

I can’t say that’s always the case, but from what I’ve been told, that seems to be a difference in pattern. So you can certainly do crowdfunding in the US—you may find it’s only going to work if you’ve got a Delaware company. Those US crowdfunding platforms just cannot operate into a non-US company. So you’ll have to have a US company for that.

Debt. So, pure debt—as in, borrowing money—usually isn’t an option for startups. Because you can only borrow money if you can pay it back. And if you don’t have revenue and hopefully profit, you can’t pay it back. And you for sure are going to be bankrupt when it comes time to pay it back.

You can raise with a convertible note instead of a SeedFAST or a SAFE. And it seems that in the US, SAFEs—which are kind of the US equivalent of a SeedFAST—seem more popular on the West Coast. And when you get to the East Coast—New York—it seems to be sort of 50/50 between SAFEs and convertible notes. Some investors seem more comfortable with convertible notes.

There’s an option to get their money back on conversion, or get shares on conversion. Maybe they can get interest. Maybe they just want a convertible note. So keep those things in mind—the different legal constructs that might be helpful for your investors.

Grant funding. So in the UK, grant funding—in Innovate UK, you know the Smart Grants—were hugely oversubscribed. Only a 2% chance, literally, of getting one. You could go to the casino and play roulette and have a higher chance of making money by putting your money on 26 than, you know, getting a Smart UK grant.

That program the government has now killed. So you’ve got fewer grant choices. But if you’re a spinout, grants are good.

In the US, there are literally, as I understand it, 10,000 granting bodies. And Grantify is now set up in the US, and you can go there to see—they want to sort of productize the finding of grant investments from thousands of state, local, federal authorities.

But you’re almost certainly going to need a US company. And if you want to get money from the Idaho authority, it may need to be an Idaho company that you’ve set up. But grant funding is certainly an option—but probably requires a US company, and sometimes a local state entity, rather than a Delaware C Corporation, which is used for VC funding.

So let’s now go back to the traditional funding—and you now have found some investors. And I’d like to spend a moment—maybe it’ll be a slightly fun moment—on the difference in style when presenting or pitching to a UK versus US investor, right?

Because in America, it’s always big—dialed up to 11. So maybe you can caricature how you might dial it up—or maybe there’s no difference?

Jorian Hoover: Yeah, I was hoping you weren’t going to ask me about crowdfunding…

Anthony Rose: Ha!

Jorian Hoover: Yeah, I mean, if I was to caricature—you know, I can’t tell you how many founders have told me, “Hey Jorian, what worked really well for me talking to US investors is—they, you know, get out of their seats, and volume goes up, and they’re getting animated.”

And you know, that’s more of a caricature. But if you just look at it on LinkedIn, you know—what do people say is the generic difference between the US and UK investors?

You’ll hear: the US investors—they have a way bigger risk appetite. They’re looking for something way bigger. And they’re true VC investors.

And you’ll hear in the UK: they don’t want to take risk. They’re asking for all these things, etc.

To me, I don’t want to say everything’s more nuanced—but there’s some subtlety here, right?

At the top of the VC tables, I really don’t see that much of a difference between UK and US investors. When I think about the top UK investors, they really are looking for: “Is this a billion-plus opportunity?” Right? They really want that huge home run.

So I think that’s very similar. I think where you start to see the difference is once you go down a couple of tiers, in terms of VCs. In the US, you still have more of this risk appetite because there’s a deeper kind of source of capital—more VC firms.

But I think when you’ve gone down a couple of tiers in the UK, that’s where you start to get more questions: “Hey, are you sure you want to take those risks?” “Can you send us three or four financial models at the pre-seed stage?” “Okay, can you do X? Can you do Y?”

And that’s where I notice maybe more of the difference between the US and the UK.

Anthony Rose: Okay, all right. So just for a fun thing—I think one thing that I’ve seen in New York is: do not tell people, if they ask how things are going, say in a traditional English way, “They’re going pretty well,” because they’ll say, “Oh my God, I’m so sorry! What went wrong?” So if it’s not awesome, it means it’s fatally flawed.

So if you tell people it’s going “nicely,” they’re just going to go, “How’s growth?” “It’s pretty good.” It’s—“Dude, thank you. It’s been really great calling you. Call me when you’ve got growth again.”

So everything is dialed up to 11.

But I think you’ve just hit the nail on the head with a key thing to keep in mind with any investor VC call—particularly in the US—and you hear it much more in the US than the UK, where it might be sort of top of mind but not as expressed as clearly, which is:

Are you going to be a unicorn?

And so when you’re talking to a VC, I’ve frequently seen panels with VCs, and the single thing they think of as you are rabbiting along on your pitch deck is: Is this going to exit for a billion dollars? If it’s not, they’re just not interested.

And it’s different with angel investors. If angel investors make a 5x or 10x return on their investments in 3 to 5 years, that is awesome—because it’s much better than what they’re going to get with their money at the bank. And if, you know, half of the investments or two-thirds of them go bankrupt and one-third return 10x or something like that, they’re ahead. And if some return 50x, they’re very much ahead.

Whereas VCs obey this power law, where they know most will return little or nothing, and one is going to return 100x—and they’re going to be diluted several times between now and then. So VCs are going to realize, these days, the median time to an exit is, you know, 7 to 10 years, during which time you’ve raised Series A, B, C, and so they’re diluted by, you know, 70% or something like that.

So they need to make a substantial amount to cover their fund and make the entire business worthwhile.

So if every slide you’re going through with an investor—a VC—if you’re channeling: “Is this a billion dollar exit?” And if the answer to you is no, then you maybe shouldn’t have got on the call in the first place until you’ve sexed it up to be that. And not only sexed up the slide deck, but sexed up the vision for you as well.

So I’m going to talk about that for a minute. Because at SeedLegals, when we raised our Series A round, a common thing was: “Hey guys, love what you’re doing, it’s an awesome business… but I’m not sure the market’s going to be big enough. Is it going to be a unicorn?”

So what you want to do is—you know, at SeedLegals, great: UK startups do funding rounds on SeedLegals—great! But it’s a certain size market.

So then your quandary is: do you tell investors, “I’m going to be in 17 other countries. We’re going to go crazy. And we’re going to ramp up quickly”? The problem is, if you do that, you’re going to run out of money.

So you’ve got a dual story to tell: one to your product and marketing and dev teams: “Stay focused, build this as our initial product,” while at the same time selling to the investors the bigger story.

You’re not doing anything duplicitous—you just haven’t got there yet. Showing how it’s going to branch out into these other areas, and you’re going to use AI, and you’ll add a B2B component, and you can sell data, and it’ll be global.

But stay focused locally on what you’re building now—otherwise if you spend too much time too early on that, you’re going to run out of money.

But the key is: going back to, with each slide, is this a billion dollar exit? And if you can see the flicker in the investor’s eyes that it’s not—you’ve got your work to do for your next investor presentation.

Jorian Hoover: And Anthony, just curious—when you guys were raising your Series A, was potentially moving to the US at some point a big part of that story?

Anthony Rose: It wasn’t, actually. At the time, we didn’t discuss it. But you’ve actually raised a super interesting point, which is—I get a lot of inbound from investors wanting to invest in us. And the question is: should I talk to them about US?

And what I discovered is: as soon as I mention, “We’re thinking about the US,” they go, “That’s really good. Call me when you’ve got traction in the US.”

And so I found the two stable scenarios for investors:

1. Do not talk about US expansion at all. We’ve got great companies, growing nicely, focused on the UK. These are our numbers.
2. Once you’ve got traction in the US, then go talk to investors with some numbers: “We’re doing this number of dollars ARR or MRR, growing at this rate, and now we want to raise however many zillions to grow and scale across the US.”

But if you just are in the UK and you say, “We’re launching in the US,” US investors see it—from what I’ve seen—as the worst of both worlds. Which is: you’re going to be using money across multiple countries, so you’re going to be burning more money with no evidence that you’re going to get product-market fit in this market. Your senior team may now be spending their time trying to manage two different markets and different time zones, and your dev team and product team are trying to conquer two different things too early.

So talking about the US too early can be a serious negative with investors, which I was quite surprised to find. I thought mentioning the upside was going to get, “Awesome, we’re in!” And I’ve learned: we have to fund US expansion on our own bat until we’ve got traction—because no one’s going to be interested in doing it until, you know, there’s evidence.

Anthony Rose: All right. Now let us go to a couple of questions. Can you, Jorian, talk about any tax issues? Are you familiar with what happens with transfers or creating Delaware companies or others—and if not, we’ll move on to something else. And if yes, go for it.

Jorian Hoover: You know, I know a little bit about it just from the founders I’ve worked with, but I’d really hesitate to give any tax advice on the call, because there are more specific scenarios I know.

Anthony Rose: Okay, all right. So the tax one—we’ll get back with separate articles on that.

Anthony Rose: Next is—you know, what stage? From my discussion moments ago, what stage do you think you would recommend founders look to the US? Should it be super early, right at the beginning? Should it be later?

Jorian Hoover: You know, I think—kind of building on your points around US investors either want to know you’re not doing the US now, or that you’ve already kind of started in the US or have concrete plans—either I would do it very close to the beginning, right?

If you’re going to be entering the US as your initial market, I would highly consider looking for US investment as your pre-seed or seed. But then, if your initial investment has come from UK investors—if you raise a million from UK investors—I would say most likely, unless it’s a digital product like you’ve said before that can just be distributed globally, I probably wouldn’t raise from the US until you have more concrete plans to expand into the US. Because then I think that American capital can really be better for you as a company at that point.

Anthony Rose: Okay. And that aligns with one of the questions—and what I’ve said—which is: when’s the time to raise from US investors? And it’s really at the point you’ve shown product-market fit in the UK and you’re now ready to expand to the US and hopefully have some traction.

Sometimes you’ll manage to get it without needing traction, and sometimes you’ll need to show traction. And the answer might vary by investor and also by the ease at which you can just turn on in other territories. If all it is is sales and marketing and you’ve proven the model, then that’s great.

But if a lot of local development is needed—so for example, if you’re doing things for property—you’ve now got a whole property ecosystem that’s in the UK: the Zooplas and the RightMoves and so on. In the US, it’s completely different with different players. Success in one by no means indicates success in another. And that’s why investors say, “Come back when you’ve got traction.”

All right. So there are lots of great questions. We’re not going to have time for all of them. I think some of them are, “When should I do a Delaware corporation and do a Delaware Flip?” And I think it’s only when you think that your company will largely now be based in the US and that becomes the hub, or when you’ve got investors who insist on it as a condition of investing.

That is the wisdom today. And the reason is: there’s more friction in having a US company—particularly if your team is in the UK. You then need a UK subsidiary to have employment agreements here. Your SEIS investors—you can get them SEIS into your US company. They can invest and you can still give them SEIS, but it’s going to be a bit more persuasion needed.

And then very quickly, you’re going to run into your tax filings in the US. You know, I’d set up in New York and got some office space—and a week later got a letter from, you know, New York.gov or whatever it is about, “Now, great, register for doing tax and business in New York.” It’s like, “Okay, great. One more thing.”

So there is more friction, but there is considerable promise and upside to be had.

So we need to wrap up at this time. Any last words, Jorian, your side?

Jorian Hoover: Yeah. And just on the Delaware Flip front—that’s something not to be taken lightly. And that is much harder to do than just creating a Delaware company from the get-go.

Yeah, in terms of any last words—no, it’s been really great chatting with everyone. I hope it was helpful.

I would say: the US and getting investment from the US is definitely possible. But as we’ve talked about today, a few conditions need to be true for it to make sense as a UK founder. If you want to be based in the UK—I mean, you always have the option of just moving to the US and creating a US company, and then you’ll be on that turf. But that’s a different conversation.

Yeah, I’ll also say—if anyone has any other questions or ever wants help with their fundraise, feel free to DM me on LinkedIn. I’m pretty easy to find there.

Anthony Rose: Thank you. I think one of the last things just to wrap up is that if you’re expanding in another market, there are many words of wisdom on the way to do it. One of the common things that’s been said is: for UK companies expanding to the US, the first role they hire is a marketing role—and they’re usually at $200K+ per year compensation and stock, equity and so on.

And then, some months later, they realize the only thing this person has been able to sell is themselves—because you’re used to the British reserve: “Yes, yes, I do,” whereas Americans are so outspoken, the first marketing person you talk to, you go, “That’s amazing! They’re going to solve everything.” And then it turns out there’s a lot of BS-ing involved.

Jorian Hoover: Yeah.

Anthony Rose: So we’ve tried at SeedLegals to take the opposite approach, which is: not go crazy on cash. In fact, one of the companies that I’ve met in New York is a UK company who’s immediately hired 10 people, got office space, and is now cutting back—because you can spend a lot of money in New York or elsewhere.

So I’ve got my butt on a plane—two weeks in London, two weeks in New York. One of my colleagues in New York. I’m now hiring a couple of other people in New York as we get traction. And as the founder, you have the fastest way to get product-market fit.

So as your customers in the US are going, “This doesn’t feel right,” or “This wording doesn’t feel right,” you can relay it to your team very quickly—because you want action. Otherwise, you’re sitting there and nothing’s happening.

I’ve also discovered that Americans like everything to feel American. So when I went to chat with people, they’d look me up on LinkedIn and go, “Oh, Anthony, you’re based in the UK.” So I changed it to US. There should be no pound sign anywhere on your website that Americans see. Don’t tell them that you’re in the UK—they don’t care. Because there’s just the US.

So you need to portray yourself to US investors and customers as just US. You don’t need to say “we’re elsewhere,” because for US people, there is no elsewhere. There’s just the US.

And once you’ve mastered that, then you can go off and do business and raise.

So if you need more: anthony@seedlegals.com, hit me up on LinkedIn, Anthony Rose. I’m doing a bunch of articles on Delaware Flips, which I really am looking to automate. And maybe this time next year, a good fraction of UK companies will just incorporate in Delaware—maybe because the UK government is helping them want to do that inadvertently.

But if you Google “SeedLegals Delaware Flip,” you’ll see articles on that.

And I’m definitely not encouraging the Delaware Flip—but I’m encouraging people to have a set of tools to help them grow their business, whether it’s here, they’re raising here, or raising in the US.

So I hope that was helpful—and anything you need, reach out to Jorian or to me. Thank you.

Jorian Hoover: Thanks everyone so much. Thanks Anthony.