fundraising & visa

Hey there!

Aizada here from Alma.

I've been having deep conversations with dozens of international founders lately about a critical intersection that doesn't get enough attention: how your immigration strategy and fundraising plans affect each other.

Many founders don't realize it, but your cap table and visa status are intimately connected. Getting this wrong can create serious headaches down the road.

Sounds confusing? Let’s dive in: simple as just hiring someone through an offer letter. Compliance requires more.

Why It Matters for Visas:

⦁ SAFEs delay valuation discussions and are less complicated to negotiate than equity rounds

⦁ Equity rounds, while they have more paperwork and governance, make future rounds easier (in terms of raising)

Yup, especially during early rounds like Seed. Here’s why:

1. Hands-on Value Addition: VCs bring not just capital but also experience, advice, and networks. Geographic proximity is considered crucial for identifying investment opportunities, monitoring portfolio companies, and adding value through mentorship (Village Global has been exactly that for us)

2. Time Zone Challenges: For European companies, working with West Coast US investors means navigating an 8-9 hour time difference, with potential flight times of 11 hours or more, making regular in-person interactions difficult (they want to help you scale and raise your next round for both you and them)

3. Market Understanding: Having founders in the US allows for better understanding of the American market dynamics, customer needs, and competitive landscape (also your company is going to have to be registered in the US (usually mandatory by VCs)

4. Network Effects: Physical presence enables founders to build relationships with potential customers, partners, and future investors – crucial for growth-stage companies (founders who were here for SaaStr could just walk in to our office and meet us)

Talking about SaaStr, the CEO echoes the same thought process:

This is a long one, I can go on about this and it’s based on so much context.

But here’s a grid I worked on to make it easier:

A general rule of thumb would be first understanding the current limitations of your visa (especially if you’re in the US on an F-1, H-1B or L-1) and then ensuring that the way forward supports not just being able to be funded but being able to raise basis your visa.

Most of the groundwork on converting your visa status to an O-1A would be done post raising given the visibility and documentation that creates to help with acceptance of issuance.

If this is yet to confusing, just click below and we’ll get on a call and guide you through it!

Based on all the above, here's your action plan for aligning immigration and fundraising:

Having worked with Assel (my co-founder) who went through the O-1A to EB-1A journey, I've witnessed her stress through the journey. At Alma, we've guided hundreds of founders through aligning their immigration and fundraising strategies.

What I've learned is that transparency with investors about your immigration strategy is actually a strength, not a weakness.

The most sophisticated investors respect founders who proactively address this aspect of company setup.

Building a startup is challenging enough. Your immigration strategy shouldn't add unnecessary complications to your fundraising journey.

If you have questions about your specific situation, just hit reply to this email and we’ll get back!