If you are an Asian investor who wants to invest in US businesses, you might find US corporate structures confusing and complicated.
Well, worry (and wonder) no more. Venture Smarter is a platform that helps business professionals start a business in the US. They make it easy for you to learn everything you need to know about LLCs and other business structures in the US.
What do Asian investors need to keep in mind?
Jon Morgan, the company’s CEO and co-founder, had a fruitful discussion with us on this area. Describing their mission and vision as “aiming to be the driving force behind everyone’s business success,” Jon gave some helpful advice on how Asian investors can invest wisely and safely in US businesses.
Here are some of the things to keep in mind:
Business structures play a vital role in any business.
As an investor, your success depends on the business owners’ strategies and operations.
Beyond the strategies and operations crafted by business owners, a meticulous evaluation of a potential investment includes a critical examination of its business structure. In the US, this assessment is imperative due to its far-reaching implications on legal standing, tax obligations, and day-to-day operations.
Choosing between sole proprietorship, LLC, corporation, or partnership is not just about liability, taxation, and management. It also affects how the business can survive, adapt, and grow in the market. For example, a sole proprietorship is easy and cheap to set up, but it exposes the owner to unlimited personal liability and higher tax rates. A corporation, on the other hand, offers limited liability protection and lower tax rates, but it requires more paperwork and compliance costs.
A smart investor knows that a good business structure is the foundation of lasting success. It reflects the vision, goals, and values of the business owners, and it aligns with the expectations and preferences of the investors. A well-chosen business structure can also protect you from legal risks, tax burdens, and operational inefficiencies that may arise from the business activities.
Jon says that Venture Smarter can help investors choose the best business structure for their investment goals. “We have a team of experts who can guide you through the pros and cons of different business structures, such as sole proprietorship, LLC, corporation, or partnership. We can also help you set up and manage your business structure, taking care of the legal, tax, and operational aspects,” he shared.
Strategically diversify to safeguard investments and manage risks effectively.
“If you want to invest wisely, you need to diversify your portfolio,” says Jon.
That means spreading your money across different kinds of businesses in the US market. This way, you can balance your risks and rewards, and not worry too much about the ups and downs of the market. But before you invest, you need to do your homework.
You need to check out the businesses you’re interested in, see how they’re doing financially, and find out who’s running them. You can use tools like DealRoom or Symanto to conduct thorough due diligence on the target companies and evaluate their strengths, weaknesses, opportunities, and threats.
You also need to be aware of the differences between the US and Asia. For example, some US states have different rules and taxes that can affect how profitable and sustainable a business is. You need to know what the US customers want and need because they might be different from the Asian customers. You can use techniques like customer surveys, customer personas, and customer psychology, to better understand your customers and tailor your products or services to their preferences.
Stay Informed on Economic Trends and Market Dynamic
To make informed investment decisions, Asian investors must stay updated on economic trends and market dynamics in the United States. Jon emphasizes that monitoring indicators such as GDP growth, interest rates, and industry-specific trends can provide valuable insights. This knowledge helps investors anticipate changes in the market environment and adjust their investment strategies accordingly.
Asian investors should also monitor the industry-specific trends that are relevant to their investments. For example, if an investor is interested in the technology sector, they should follow the indicators such as the Purchasing Managers’ Index (PMI) for the manufacturing sector, the research and development (R&D) spending, the patent applications, and the stock market performance of the leading technology companies.
These indicators can provide information on the innovation, productivity, and competitiveness of the technology sector, and they can help identify the opportunities and risks for investment.
Build Strong Networks and Partnerships:
“To thrive in the US market, Asian investors need to build bridges, not walls, with the local people, experts, and opportunities,” Morgan shares.
Collaborating with local business leaders, industry experts, and other investors can provide valuable guidance and opportunities. For example, local business leaders can help Asian investors understand the market dynamics, customer preferences, and regulatory environment of the US market.
Industry experts can offer insights and advice on the latest trends, innovations, and best practices in their respective fields. Other investors can share their experiences, challenges, and lessons learned from investing in the US market. Networking can also facilitate access to relevant resources, market intelligence, and potential co-investment prospects, enhancing the overall success of the investment venture.
For instance, networking can help Asian investors find reliable sources of funding, information, and support for their investments. It can also help them identify and evaluate potential partners, co-investors, or acquirers for their portfolio companies. By building strong networks and partnerships, Asian investors can increase their chances of achieving their investment goals and creating value in the US market.
The pros and cons of using Venture Smarter’s services and platform:
Pros:
- Venture Smarter can help you choose the best business structure.
- They have a team of experts who can provide you with valuable guidance, consultation services, and assistance. Their experience and knowledge in different fields, such as legal, tax, operational, and financial, can truly be beneficial.
- Venture Smarter has a reputation and track record of helping businesses achieve remarkable growth and success in the US market. They have testimonials and reviews from satisfied clients and partners who praise their services and support.
Cons:
- Venture Smarter may not be compatible with some businesses or investors. Depending on your goals, preferences, and needs, you may find that their services and platform are not suitable or optimal for you. For example, some businesses may be too large or have too much liability to be registered as LLCs, and some investors may prefer a different management structure than the one they offered.
- Working with them may not be easy or comfortable, but it will be rewarding and fulfilling. Because they only work with the best and most promising businesses, they will push you to achieve your full potential and deliver your best results. They will also hold you accountable and support you along the way.
- Venture Smarter may not have the expertise or experience in some industries or sectors. Because they specialize in helping businesses with LLC formation and management, they may not have the knowledge or skills to advise or assist businesses in other areas.
What do I think about Venture Smarter?
Venture Smarter is a reliable and helpful partner for Asian investors who want to invest in US businesses. It has a team of experts who can provide valuable guidance and advice. By working with Venture Smarter, Asian investors can increase their chances of achieving remarkable success in choosing the right business to invest in.
Nonetheless, investing in US businesses is not without challenges and risks. Asian investors need to be aware of the differences and difficulties that may arise from the cultural, legal, and regulatory environment of the US market. They need to be flexible and adaptable to the changes and opportunities in the market environment and adjust their investment strategies accordingly. They also need to be proactive and diligent in doing their homework, research, and analysis, and seek feedback and support from their networks and partners. By doing so, they can avoid potential pitfalls and maximize their returns on their US investments.
