VC and Angel funding question

[DSCorp]

Is there a difference in a start-up being incorporated offshore or incorporated someplace like Delaware in order to be more attractive to VC and Angel investors? Does it really make a difference? I am looking to incorporate a DeFi platform soon and want to put myself in the best position possible to get funding.

 

[Sols]

Yes, it makes a difference. Investors will want a jurisdiction with which they are familiar. Delaware C-corp is the gold standard, especially if you want US investors or investors from the rest of the Americas.

If you are less focused on US investors, nearly any of the major EU countries will do.

For Asia, Singapore is the darling.

Make sure you understand the ins and outs of having different classes of shares (preferred, regular, Series A/B, and other variations) so that you can offer investors an attractive equity share but not give them more voting power than necessary so that you retain control.

If you show up with a dodgy IBC or other offshore company, many investors will be spooked.

 

[DSCorp]

Yes, it makes a difference. Investors will want a jurisdiction with which they are familiar. Delaware C-corp is the gold standard, especially if you want US investors or investors from the rest of the Americas.

If you are less focused on US investors, nearly any of the major EU countries will do.

For Asia, Singapore is the darling.

Make sure you understand the ins and outs of having different classes of shares (preferred, regular, Series A/B, and other variations) so that you can offer investors an attractive equity share but not give them more voting power than necessary so that you retain control.

If you show up with a dodgy IBC or other offshore company, many investors will be spooked.

Thank you for your input! Greatly appreciated!

 

[Sols]

About other offshore companies I would say that a Cayman company or a BVI company wouldn't have problems for getting investors

It really depends on the investors and your relationship with them. In my experience, you limit your ability to attract VC firms if you show up with an offshore company, compared to Delaware C-corp or EU or Singapore company. If you're speaking with a VC firm and you get to the nitty-gritty, they are very likely to insist on a non-offshore company.

Angel and seed investors might have a higher risk appetite, especially if you come to them highly recommended from someone they trust.

But yes, BVI and Cayman Islands are less likely to be problematic than something dodgier like Seychelles. However, I mostly see Cayman and BVI companies set up as investment vehicles by investors, but rarely do investors put money directly into an offshore company provided by the entrepreneur.

 

[DSCorp]

It really depends on the investors and your relationship with them. In my experience, you limit your ability to attract VC firms if you show up with an offshore company, compared to Delaware C-corp or EU or Singapore company. If you're speaking with a VC firm and you get to the nitty-gritty, they are very likely to insist on a non-offshore company.

Angel and seed investors might have a higher risk appetite, especially if you come to them highly recommended from someone they trust.

But yes, BVI and Cayman Islands are less likely to be problematic than something dodgier like Seychelles. However, I mostly see Cayman and BVI companies set up as investment vehicles by investors, but rarely do investors put money directly into an offshore company provided by the entrepreneur.

I just registered as a Delaware C-corp, thank you for your input!