How to Expand to the United States: 6 Aspects Startup Founders Should Consider

The United States is the economy with the most opportunities for creating and expanding startups. It holds the two most developed entrepreneurship ecosystems in the world, with Silicon Valley and New York the main areas with the most entrepreneurial activity and the easiest conditions for opening new startups, according to The Global Ecosystem Report 2020. This reinforces founders’ interest in how to expand to the United States.

Entrepreneurs around the world see this country as one of the main destinations to take their business international, mainly because of the business climate, the dynamism of the market and its position in world trade. In addition, the ease of creating companies and the push from accelerators, VC funds and organizations that leverage the business ecosystem make this economy an ideal place to expand.

There are opportunities for startups in different sectors, such as edtech focused on girls, boys and teenagers, considering that children in this country face educational challenges. One of them is bullying. The United States is the country with the second most bullying cases, after Mexico. Six out of 10 American children and teenagers suffer from this problem, according to the Bullying Without Borders International Organization.

Challenges like these represent a market opportunity for startups from other countries to build their international expansion plan and implement their solutions and business models to address the social challenges faced in the country.

There are Latin American startups focused on childhood that have already expanded to the United States. One example is Brave Up, an edtech that fights school bullying and landed in the United States from Chile in 2020. Its platform, with a B2B business model focused on schools, predicts, detects and stops bullying in schools.

More and more Latin American companies are betting on the U.S. market in their internationalization. Educational startups such as Beereaders, Uplanner and Storybook also chose the United States as their expansion destination.

Basics for a successful expansion

Even so, expansion is one of the most challenging stages for any startup, whatever its industry, even with fast growth, revenue and a scalable business model. Not all companies reach this milestone in their journey, and some fall by the wayside.

So that this does not happen to you, in this article we share some general considerations that can help you with how to open a company in the United States. You should know that expansion will always be a challenge, but with these recommendations you can make better business decisions.

1. Look for strategic allies

The support and guidance of allies such as incubators, accelerators, investment funds, law firms and any other institution that guides you through the soft landing process is key to making the expansion happen.

Fortunately, in the U.S. startup ecosystem there are different players who support entrepreneurs, such as Endeavor, The VentureCity, TechStars, IDB Lab and Base Miami, among others.

The recommendation from Álvaro Carrasco, co-founder of Brave Up, is to look for local partners who will accompany you in the expansion process before leaving your home country. According to Álvaro, doing so will help you get investment, a place to live in the United States, open an office and receive advice for the soft landing.

2. Incorporate your company

There are two categories that are usually used to incorporate companies in the North American market: LLC and C Corp. In Latin America they would be the equivalent of companies set up as limited liability companies and corporations. You will most likely look for investment for your company in the United States, so a good option is to incorporate the company as a C Corp, just as Brave Up did.

3. Get your visa

After legally creating the company, one of the most important procedures you need to complete is the visa, which will let you live and work legally in the country. There are different types of visas to open a business in the United States, with different features and purposes. Here are some of the most commonly used:

L1-A L1-B Visa

This visa is ideal for business owners who plan to expand in the United States. It is the most common and is granted when an employer requests authorization for an employee with specialized knowledge to work and live in the United States. With this visa, foreign companies can send their workers to that country so they can establish themselves in the market. It is a non-immigrant classification and is temporary.

E2 Visa

This is a visa for investors who want to create a business from scratch or buy an established one with a moderate investment starting at 50 thousand dollars. It lets the entrepreneur live legally in the country indefinitely together with their partner and family. This visa applies to people who live in Mexico, Chile, Argentina, Colombia, Ecuador, Bolivia, Costa Rica, Honduras, Panama, Paraguay and Spain.

EB5 Visa

Ideal for investors or entrepreneurs who want to do business in the North American market. Unlike the E2 visa, the minimum investment to obtain it is 800 thousand dollars, and it requires creating at least 10 jobs.

H1B1 Visa

This visa is exclusive to people who live in Chile and Singapore. It provides for the temporary employment of non-immigrant foreigners in specialty occupations from these two countries. They can work up to two years in the United States. This is the visa Carrasco obtained, which let him work and open Brave Up in the United States, since he is Chilean by birth.

4. Accelerate growth

Another way to carry out a successful soft landing while minimizing risks is to do it alongside an accelerator, since you can receive advice, support and connections with other players who can help you establish yourself in that market. This was a strategy applied by Brave Up.

The startup went through Started, an accelerator for edtech startups, and also Newchip for fundraising and raising the money it needed to start operating. It also took part in Go Global, a government program run by ProChile that supports the internationalization process of Chilean startups and scaleups. Thanks to this, it was able to start its soft landing with Base Miami.

5. Find product market fit

In general, companies have found product market fit in their local market before moving to another country. Once you start operations and open offices in the United States, work on adapting your product and model to this country’s market.

Finding product market fit is one of the most challenging stages in the expansion process, but it will let you find potential customers and gain traction. That way the startup will begin generating sales and revenue that will help fund the start of operations in the new destination, and sustain itself with its own resources.

6. Raise an investment round

It is true that a capital injection speeds up a company’s growth and helps fund its entry into other countries. On this point, Carrasco explains that opening a new market is a good justification for raising investment, but he does not consider it the only path in an expansion. “If you already have a profitable business that generates revenue and has positive growth, with the money and traction you have you can start expanding,” says Carrasco.

Without a doubt, the United States is a land of opportunity that can take your company to the next stage of growth and expansion. We invite you to consider these recommendations so that your startup’s landing is a success.