The Globalization of Venture Capital Investing

Globalization of VC is great for America, American investment firms, and startups in other countries. America gets a slice of the best, worldwide, and it helps companies that are often fighting uphill in their local markets.<p>As a founder who has raised in Canada and is now raising in America: the cultural difference is night and day. America has significant advantages in willingness to take risk and the amount of capital to deploy. I have data showing, population adjusted, dollars per time, that American VC outclasses Canadian VC by at least two orders of magnitude. Likely much more.<p>An anecdote from a friend I was discussing this with:<p>&quot;A former partner of mine was turned down by [every Canadian firm he went to.]<p>Went to the US for a weekend and came home with US$10M.<p>4 years later, that company is valued at US$35B&quot;<p>It is an amazing experience talking to people who understand technology, understand risk taking, and put their money where their mouth is.<p>I&#x27;m bullish on American&#x27;s performance in a globalized VC market.

Zoom and the pandemic have had an effect here, but so has the success of companies not based in the US. Atlassian, Canva, SafetyCulture (to name a few) in Australia has not only helped grow the local VC ecosystem, but also made US VCs recognize that Australia punches above it&#x27;s weight.<p>VCs new they had to make investments in Asia and South America as they saw more successes come out of those regions.<p>Technology is global, so VCs can&#x27;t afford not to be.<p>However, I believe most of these VCs still expect companies to be set-up as Delaware Corps. Anybody have any insight on that?

&gt; <i>It seems to me that about half of our “new deal activity” right now is happening outside of the US. And very little of it is in western Europe where most of our non-US investing has been for the last decade.</i><p>I always thought the problem with European startups was lack of a VC critical mass and risk taking ethos. So I thought the globalization of VC would help, but this sounds like it’s bleaker than ever.<p>Is it the absurd bureaucracies? Taxes? Red tape? Europeans are a super-smart bunch but their devs make far less and they lack any superstar tech giants. Makes no sense.

It&#x27;s much better to invest in a U.S domestic C corp startup because then you&#x27;re eligible for QSBS which is one of the biggest tax breaks in the whole tax code. Sure the founders can live anywhere they want, but it&#x27;s got to be a U.S domestic C corp to get that tax break.<p>However, the founders have to comply with backup withholding and all that jazz if they live overseas and are not U.S residents.

Seems that zoom has really changed the geographic reach of VC investing.

very consistent with my sense. it has become much easier to raise money from US VC while being based internationally in the last 12 months