International expansion is a significant milestone for any startup, but it comes with its own set of complexities. In a recent discussion led by John Kinson, an experienced consultant specializing in global market entry and startup scaling, founders and executives explored the realities of expanding into the US. The conversation covered market readiness, legal and regulatory considerations, hiring strategies, and the cultural nuances that can make or break a company’s success overseas.

Breaking into the US cybersecurity market is a major milestone, but also a significant challenge. In a Cyber Runway: Scale session, John Kinson, CTO at YellowRadio and CRO at FLUIX, and a recognised internationalization expert, shared practical insights on regulatory hurdles, market entry strategies, and growth tactics for UK-based cyber startups. Hosted by Plexal and supported by the Department for Science, Innovation & Technology, the discussion covered key differences in funding, compliance, and customer expectations between the UK and US. I attended on behalf of Cyber Tzar, the Enterprise Supply Chain Risk Management platform, gaining a deeper understanding of how to navigate international expansion successfully.

Contents

Intro to Internationalisation with John Kinson Thursday 23rd January 2025

This video is publicly available on the Plexal YouTube playlist for the Cyber Runway programme.

Understanding the Why: Market Opportunity and Strategic Intent

Before making the leap, businesses must be clear on their reasons for expansion. Some of the key motivations include:

• Market Opportunity: The US offers a larger customer base, often with more established demand in certain sectors.
• Funding Potential: Many assume raising venture capital is easier in the US, though this depends on traction and relationships.
• Regulatory Factors: Some industries, particularly cybersecurity, have different compliance landscapes in the US compared to Europe.
• Competitive Landscape: Knowing whether competitors dominate the market or if there’s white space to exploit is crucial.

Several of the participants, including those working in cybersecurity, AI, and enterprise SaaS, highlighted how their domestic markets were either saturated or not as receptive to their products as the US. The session underscored the importance of being intentional with expansion—pursuing it because of clear opportunity rather than speculative ambition.

Operational Readiness: Legal, Finance, and Tax Considerations

One of the most practical takeaways was the emphasis on getting the fundamentals right before entering the US. This includes:

• Legal Structure: Many companies adopt a Delaware C-Corp structure for tax and investment benefits.
• Contracts: US contracts are generally shorter and more concise compared to their UK counterparts. Founders were advised to focus on crisp, bullet-point agreements over long, detailed proposals.
• Tax Compliance: Each US state has its own tax laws, which can complicate financial operations. Hiring a competent CPA with experience in international business is highly recommended.
• Visas and Presence: At least one key team member needs to spend time in the US. Whether on an ESTA visa waiver for short trips or pursuing an E-1 or O-1 visa for a longer-term presence, founders should anticipate this in their planning.

John emphasized that legal counsel in the US is more integrated into strategic decision-making than in the UK. Good legal advisors don’t just handle paperwork; they help companies navigate regulations, mitigate risk, and optimize contracts to their advantage.

Sales and Go-to-Market: The Cultural Shift

A recurring theme in the discussion was the difference in sales approaches between the UK and the US:

• Shorter Sales Cycles: While European sales processes tend to involve detailed proposals and prolonged negotiations, US buyers prefer quick, clear-cut deals.
• Relationship-Driven: In the US, personal relationships play a much greater role in decision-making. Having an in-country sales representative with an existing network can make a significant difference.
• Enterprise Sales Salaries: Experienced US sales professionals command significantly higher salaries than their UK counterparts, often exceeding $300,000 for enterprise roles. However, their effectiveness in driving revenue often justifies the cost.

The group also discussed the importance of localizing marketing and communication. Even subtle differences—such as spelling and terminology—can impact credibility and customer engagement.

The Role of Partners: Leveraging Local Expertise

Several founders mentioned their interest in working with distributors, value-added resellers (VARs), and in-country service partners to accelerate market entry. John cautioned against outsourcing sales too early but acknowledged that partnerships can be valuable for:

• Regulatory compliance in specific industries.
• Building trust with established US buyers.
• Navigating procurement barriers, especially when dealing with government or enterprise clients.

Similarly, hiring in-country operations support—such as HR, tax, and legal professionals—can smooth the transition without requiring immediate in-house hires.

Fundraising in the US: Myths vs. Reality

While US funding rounds are often larger than in Europe, the process is still competitive. John shared insights from Fluix’s recent $2M seed round, highlighting that:

• US investors prioritize traction and growth above all else.
• Having a lead investor significantly speeds up the fundraising process, as others tend to follow once confidence is established.
• Being physically present in the US is essential for building investor relationships.

One key takeaway was that while the US offers more venture capital, it is not a shortcut to success. The companies that succeed in raising funds are those with clear, demonstrable traction and a strong founder presence in the market.

Key Lessons for Startups Looking West

The session ended with practical lessons for companies planning to expand into the US:

1. Start small: Expansion should be strategic, not reactive. Focus on validating the market before committing significant resources.
2. Hire carefully: US salaries, especially in sales, are high—but hiring the right people can be transformative.
3. Leverage automation: AI-driven sales and marketing tools can reduce overhead while improving efficiency.
4. Don’t assume what works in the UK will work in the US: Adaptation is key, from marketing language to customer expectations.
5. Be actively involved: Delegating expansion to an outsourced team is a risky move. Founders must remain engaged in the early stages.

Final Thoughts

Expanding to the US is a daunting but potentially transformative move for startups. By focusing on the right market entry strategy, operational setup, and sales execution, companies can avoid common pitfalls and set themselves up for success. As the discussion made clear, optimism is not a strategy—success in international markets requires preparation, adaptability, and a willingness to immerse oneself in the business culture of the new market.

For startups considering the US, the key is to approach expansion methodically—not just because it seems like the next logical step, but because there is a clear, well-researched opportunity that justifies the investment.