The U.S.
Playbook
A Guide for European Founders to Successfully
Land and Expand in the USA
About
Frontline
Ventures
About Frontline Ventures
Frontline Ventures is the venture firm that facilitates frictionless transatlantic expansion, backing B2B software founders with global ambition. We invest out of two funds but collaborate across teams, giving founders access to networks and expertise from both of our fund strategies.
Frontline Seed is for European entrepreneurs at Pre-Seed or Seed stage, with clear intentions to expand to the US.
Frontline Growth is for US companies at Series B-D, with plans to expand to Europe in the next 12-18 months.
If you’ve founded a European SaaS company with global ambitions, we’d love to hear from you — pitch us here.
CONTENTS
Introduction
At Frontline, we believe B2B tech companies must conquer both the US and European markets in order to make it as a category leader.
We’ve been operating on that belief for a decade, supporting European founders to successfully expand to the US through Frontline Seed and writing the first playbook on US expansion in 2015. We’ve also been supporting US CEOs to land and expand in Europe via Frontline Growth, and have published the go-to guide for European Expansion.
The current state of play
A decade on and the ecosystem has matured dramatically: starting up is cheaper than ever, talent wants to work at startups, and the fundamentals of starting and scaling up have been refined and made repeatable by experienced ecosystem players.
On top of that, remote and hybrid working models have also been widely adopted off the back of the pandemic, revolutionising how companies can go global.
Yet, crossing the Atlantic remains a critical challenge for globally ambitious startups. The number of European companies that have truly conquered the States and out-performed the competition to establish themselves as category-leaders remains small.
Setting expectations for U.S. Expansion
Attracting talent, securing investment, and establishing a top-tier brand in a new territory is no walk (or hike) in the park – startups still need substantial support in order to make this crossing successful, and to know when to call it a day if it’s not.
Before you start spending any money on expansion, you should understand that it involves a lot more than swapping ‘S’s for ‘Z’s and ditching ‘U’s. Setting up a new location will mean evolving how your company operates and going right back to basics to establish product/market-fit (even if you’ve already reached it in Europe). And that will be easier said than done – by the time you’re ready to expand you may have forgotten the effort it took to establish early traction, something we call “success amnesia”.
Expanding to a new continent is essentially ‘starting up’ all over again, and you should treat it as such. Start off like you are a new company with limited cash (which will be the reality), and experiment to figure out how your business is going to scale.
About this playbook
These days, there are plenty of resources available on the bureaucratic, but ultimately routine, legalities of incorporating in the States. So we didn’t just want to add more noise to the clamour of advice for overwhelmed founders.
Instead, we’ve reworked our US playbook to focus on six core principles that, if done correctly, can set you on the right path for success in the States:
- When to Expand
- Where to Land
- How to hit the ground running
- Who to hire and relocate
- How to recruit top talent in the US
- How to Manage Across Borders
Who this is for: This resource is for European B2B founders who want to expand their fast-growing business across borders and capture the US market. It is not for founders who want to shift headquarters – that’s a different kettle of fish.
Want to see who our recommended suppliers are for U.s. Expansion?
Fill in the form and we’ll email you the full list, from finance and legal to HR and consulting.
Why should European startups expand to the U.S?
Before we dive into the nitty-gritty, let’s go back to basics. Why should you be considering US expansion?
The US remains the top destination for VC – attracting 47% of global venture capital dollars in 2023 – and has a robust and diverse talent pool, bolstered by 23 of the top 50 universities in the world. These candidates have a culture of high risk-tolerance and global reputation for innovation. It’s no wonder that, according to Pitchbook, the United States is home to ~50k venture-backed companies, and serves as an outpost for a further 10k from overseas.
Expanding to a country where the competition is amplified exponentially is an intimidating task – not least because it will require rethinking how your team currently operates, and personal upheaval from your home life with gruelling travel and frequent intercontinental flights.
But the opportunity to make it in the belly of the beast is incredibly exciting — both personally and professionally — and has the potential to grow your business by an order of magnitude.
Benefits of Expanding to the U.S.
Enormous domestic market
The country has a population of over 330M people and accounts for 51% of global software spend.
If your core market is the US, it is critical to be there for product feedback and to perfect a localised go-to-market (GTM) motion.
Pointy
World-class mentors, advisors, and partners
Many of the best and the most experienced are in a handful of hubs in the US – the mentors who once seemed inaccessible are now in the same coffee shop or co-working space. The people who built and sold the giants in your industry are now angels looking for disruptors.
And, most importantly for those selling to the enterprise, the decision-makers at corporates are much keener to partner with startups than their European counterparts. There is just a greater concentration of these big players than in Europe who can expedite your route to a large market.
Access to large pools of capital
America is the birthplace of venture capital and with $171b of venture funding deployed during 2023 — close to three times the amount deployed to European companies — and over 1,600 active venture funds, according to Pitchbook.
Aside from sheer density of investors, American VCs and angels tend to be much less risk-averse. The best of them have incredible networks that you can tap into for other investors, potential hires, partners, etc.
That said, it’s no easy task for European startups to win over US VCs. You’ll likely need to make significant inroads in the States in order to prove you have what it takes to make the kinds of returns these VCs are after. The vast majority of US investors won’t invest in a non-UK European company until it has a US parent company – over 90% will need to perform a Delaware flip if they are to receive US investment (more on that later).
Clusters of skilled, experienced talent
Talent in the States has greater experience and appreciation of startups. Americans tend to better accept the inherent riskiness of startups, and therefore excel in that autonomy and ambiguity.
On top of that, the more mature startup ecosystem means there is a greater collective experience in the space – you will often find executives who have spent their entire career in startups and can flourish in an environment of speed, flexibility, and hyper-growth.
Greater exit opportunities
Being in the US will increase your chances of a favourable exit, as well as the size of that transaction. From an M&A perspective, the decision-makers of many of the largest potential acquirers are predominantly in the US.
The reality is that Europe has very few global technology leaders, and none in the same realm as the largest US companies (Apple, Nvidia, Microsoft, etc.). Which means that companies really have to look to the US for large-scale acquisition opportunities."
Menalto Advisors
When to Expand
