When considering a move to the United States, Indian startup founders first need to make a mental pivot to face the market they want to sell into and ask themselves how much risk they are willing to own.
In the SaaS space, there are (broadly) two types of companies you can build. The first option is to create a better product than what is currently available on the market — like better accounting software or a CRM, or a better marketing automation tool, especially for the mid-market companies. This path is well-worn — Indian companies Zoho and Freshworks are leading examples.
The first mistake Indian entrepreneurs make when coming to America is to assume that a large market and a customer base open to novel products means your first step should be buying a plane ticket.
The second — and riskier — option is to build something in an entirely new category, which is what we’re doing at Talview, where we’re building a video AI platform for digitized talent processes for companies making hiring decisions. Creating a new market is a high-risk scenario lined with pitfalls disguised as opportunities, but the rewards are potentially immense.
The first type of company never has to leave India. You can start your company there, hire local talent and begin selling your high-quality remote services to midmarket businesses across the globe. The second option works best if you’re willing to target more advanced SaaS software markets in the U.S.
No game plan, just a product
The U.S. is the largest software market and where customers are more likely to try something new. However, the first mistake Indian entrepreneurs make when coming to America is to assume that a large market and a customer base open to novel products means your first step should be buying a plane ticket.
First: Which city will you choose? When entering a new market, founders are also the salesperson, so you need to be prepared to meet customers or investors and get that early traction before you decide to move your operations to the U.S. full time.
Where you want to be based depends on your appetite for investment. If you’re in a fast-growing or competitive segment, or if there’s a lot more upfront investment involved, then you want to be located in the Bay Area. Silicon Valley will provide you better access to investors, and it’s much easier to raise money there.
But if fundraising is not your top priority, you should look for places where you can be closer to your customers. Therefore, the industry you’re targeting determines where you’re based. If you’re selling into retail, maybe the Midwest makes sense. If you’re targeting the financial services sector, then the Northeast might be your best option. Chicago for insurance. Seattle for manufacturing and aviation. Texas for energy. Los Angeles for media and film.
More money doesn’t mean better opportunities
Unfortunately, many Indian startup founders fall for what could be called the “funding misconception,” where they think a significant offer from an Indian or foreign investor will be more valuable than an American investor offering a smaller amount of money but better connections in the industry.
When relocating to the U.S., investors are not just a valuable source of capital you need to fund operations. They are a vital lifeline to many resources you need to get established, including the talent pools you can tap into to hire your first stateside workers.
Investors provide opportunities for Indian startup founders to navigate U.S. culture, help you connect with like-minded individuals and facilitate meetings to close your first U.S.-based deals.
Founders should be aware of the many cross-border platforms and tools for acquiring early investors in the U.S., including AngelList, SeedInvest and many others. In Silicon Valley, there are also India/U.S.-specific investors like Emergent Ventures and Inventus Capital Partners. These investors have ties to other Indian founders and can help you grow your network and brand.
Failing to hire an immigration attorney early on
One critical element of a successful startup transfer to the United States is the relocation of a few of your top executives to establish a serious presence. Being able and willing to relocate provides clarity to investors and shows that company executives are eager to play an essential role in establishing a new footprint overseas.
Startup founders need to be aware that post-COVID, the landscape has changed for companies looking to relocate to the U.S. You must hire an immigration attorney to make sure your visa application and paperwork are in order.
A typical immigration strategy is to acquire an L-1 visa for international employees. This type of visa is a relatively easy option for startups. It provides attractive benefits and advantages, including work permits for family members and the opportunity to upgrade your immigration status to permanent resident. If you have a solid business plan and some early backers or investors, and you plan to hire locally, then this type of visa is not a huge challenge to get today.
In the Bay Area especially, there are many experienced immigration law firms that work specifically with startups. Founders should contact a few before they plan to relocate so they can find the best option to suit their business and long-term plans.
The United States is a welcoming market full of opportunities. However, relocating presents significant challenges.
To succeed, founders need to have solid backing from their Indian operations paired with a sound business plan. Next, they must connect with others in the India/U.S. business community and find American investors who can introduce them to people they can bring onto their team. After that, the visa process is relatively straightforward (so long as you have an attorney). Once you get on the ground, get out there: Networking will certainly help founders avoid unnecessary mistakes and grow their business successfully.