A few days ago, I asked if anyone had questions about AppSignal's recent funding round. Stanislav Katkov responded: "Have you considered raising from EU investors? Did you have to incorporate in the US after raising with US investors?"
We spoke with several potential partners, some based in the US and others in the EU. A few were clearly not the right fit from the beginning, while others stayed in the running much longer. In the end, we made our decision based on fit: cultural alignment, market expertise, experience, and deal terms.
Staying within the EU might have made things easier, legally and logistically. Coordinating across time zones created delays and a few late nights, and currency fluctuations added complexity that a European deal wouldn't have. Still, Elsewhere Partners turned out to be the best fit for us, and we had agreed from the outset not to exclude any investor solely based on location.
Yes, we did incorporate in the US to facilitate this deal. It wasn't something we had planned to do just yet, but it was always going to be necessary eventually. We already serve plenty of customers in the US, but a significant number of potential customers are hesitant to work with a European entity. They often cite reasons like HIPAA compliance (which, to be clear, doesn't require a US entity or data residency, and we are already compliant) as well as internal policies that prohibit them from contracting with European companies.
By setting up a US entity alongside our existing Dutch one, we're now in a stronger position to support both our European and American customers equally well. That's also why we're beginning to hire Customer Success team members in the US over the coming weeks, to ensure local support coverage in line with these growth plans.
Raising from an EU investor might have been simpler. But simpler isn't always better, and we ended up with a partner who understands our market and wants to grow with us. The complexity was worth it.