Asked: What Stops VCs from Investing in Foreign Companies?

Nothing, it happens all the time. Yet, the question is common, frequently asked; begging a question its own — what are startups struggling with that they think that foreign investors won’t invest?

Start with this appreciation: investing in startups is the riskiest use of capital, in the world. Gambling at a casino is more likely to win.

Most founders overlook this and jump to the conclusions that “good business” = due funding.

No matter how great your business, 90% of startups fail, 74% of funded startups fail, and 54% of businesses fail in 5 years (if not sure the difference between startup and new business, read this).

Because of that, investors actually largely invest in what they know.

Not traction, KPIs, models, due diligence, nor pitch decks. Their first line in the sand is, “do I know this and have interest in this kind of thing?”

Period. I see a couple dozen pitch decks come across my desk (so to speak) every day and easily half of them are in things I know nothing about (FinTech, AI, etc.). Great startups? Maybe. Fundable? Possibly. But I don’t KNOW those things so I really can’t qualify if it’s worth anyone’s time and I don’t have the time to take a meeting to figure out if something I don’t know anything…