Hi guys,
We're back on deck for 2026 and many Founders I'm speaking with have a similar theme on their mind: global expansion.
For almost every VC-backed Founder, there comes a time when you need to spread your wings and expand offshore. It's simple math: the Aussie market is too small to build the kind of multi-billion dollar business that VCs are looking for. And while there are many markets Founders look to depending on their product and market dynamics, it's fair to say for the vast majority the first stop is the United States.
It makes sense why. The US is one of the biggest markets for technology and where a lot of the action is. More importantly though is the fact that the US is home to the biggest capital markets for venture investment, meaning if you can crack it there you open up a world of future opportunity.
But for every story you hear of an Aussie startup cracking it in the States, there are others who fall short.
Let's delve into four key lessons from my own experience running WithYouWithMe and the Founders we work with at KC Ventures today (40 per cent of who have operations in the US):
1. Cracking the US will put a massive strain on the team (and you personally)
Founders, ideally, need to be the ones leading the expansion. I am yet to see a truly successful expansion into a new country for a Seed-Series A company that hasn't been led by the Founder. But spearheading the move comes with its own challenges.
Back in 2018, my company WithYouWithMe made the call to expand to the US. My Co-Founder moved over to join our third Co-Founder, who had set up an initial base in Washington DC. We surrounded them with a strong US operations and GTM team with local knowledge. With two Founders living in market, you'd think it would be simple to transfer the culture and lessons learnt to the new market. We were wrong.
What we learned is that when Founders land on the ground they often spend most of their days pounding the pavement selling. This inevitably leads to less focus on team building, which is essential when a team is still very nascent.
For our next big expansion to the UK, we approached things differently. My strong recommendation is to pick your best ops team member who has been with the company a number of years and send them over for 3-4 months to help things get settled. They will understand the workflows and how things work on the coalface way better than the Founder and can be that link back to the team in Australia.
The other issue you'll face is ensuring the Aussie team doesn't go rudderless without the Founder. If you have a Co-Founder who can take on the load that's ideal, but if not it inevitably leads to cross timezone late-night calls and flights back and forth. I don't think there's any avoiding it.
2. It will cost more than you think
Take whatever figure you are budgeting for the expansion, and double it. The fact is it takes longer than you think to get traction in the US and the revenue that comes with it to offset the costs.
We put aside $1m of our Seed round to help set up in the US and it was nowhere near enough. Traction came, but the burn was high and we needed more capital than expected. This is a consistent experience with KC Ventures’ clients we've seen make the same jump.
3. Operations will become more complex
Adding the US adds significant complexity overnight to your finance and ops.
My top tip for reducing complexity: Put one person in charge of bringing it all together. That could be hiring for a Chief of Staff or a Head of Ops role, but the point is that as a Founder you want to make it this one person's responsibility as what's coming is nearly a full-time job.
If you want to get a true indication of how the US is performing (which you'll need to raise capital from US investors) all of a sudden every report needs to be separated into regions, every GTM motion needs its own measurement and tracking, and every team meeting and operating rhythm doubles (with the expectation that you'll still be part of both).
(KCV helps a lot of startups set up these structures and reporting systems to help establish this new rhythm.)
4. Compliance is messier than you're used to
I won't sugarcoat it - navigating the world of US compliance is frankly a nightmare. Get ready for more complexity than you're used to in Australia.
The first step many Founders do when thinking about expanding to the US is to set up a Delaware C-Corp. And while this is where you should get to eventually, there is so much you can do from your Australian entity and jumping into a new structure too early can have big ramifications. As is the notion of needing to 'flip-up' to a US head-co in order to raise capital. There's no doubt that this simplifies things in the long-run, but it's a big, expensive job - I'd say budgeting $100k US in legal fees is appropriate, with examples from clients being twice that cost.
Often the complicating factor is that you need to find new finance partners on the ground as few Aussie firms have this expertise. And costs are often double what you'd be paying in Australia.
KCV supports clients making the jump and manages all their accounting and finance needs, including local tax obligations so you can keep finance support in one shop. We do this through a partnership with BRDG who specialises with startups looking to expand to the US.
There are 1,000 other lessons I could mention and it's a topic I could talk for hours.
If you are looking to make the jump, reach out and we can tee up a call. Coffee or beers on me.
Cheers,
Luke Rix
[email protected]