Some companies are simply better-equipped than others to raise money from overseas investors, says Fugler. Here are key ingredients for success:
A product or service that can fill a niche in an overseas market. "Foreign investors-institutional and private-are interested in a return on their investment, but they're interested in their own economy as well," says Fugler. "The opportunity to set up a joint venture which can capitalize on distribution or licensing in the investor's own country has a great deal more appeal to an investor than a concept based and contained solely within U.S. borders."
According to Rapchinski, the opportunity to utilize ReMark's JobTag solution was very important to the company's contact at Network Asia. "They saw real value in what we were doing," he says. "Unlike here, where everyone is sitting on the sidelines, they are quite active. They have a lot of portfolio companies that need the kind of solution that JobTag offers." True to Fugler's point, as a matter of fact, Rapchinski says one of the things Network Asia bargained hard for was the right to play a role in introducing JobTag into the Asian market.
Professional guidance. Fugler says it's possible a foreign investor might pursue your company, as in ReMark's case, and professional counsel isn't vital. However, if you plan on making an all-out assault on a foreign shore à la Normandy, you're going to need some help with contacts, conventions and presentation.
When it comes to contacts, Fugler suggests that finance directories that pro-vide names and telephone numbers aren't necessarily the right path to pursue. "The problem with third-party information sources is that they are often out-of-date before they are even printed," he says. "And not only do contacts move around rapidly, but the sources of capital change their focus rapidly. A firm that one day only trades listed securities will quite suddenly enlarge their focus to include pre-IPO companies. To get at these opportunities, you need [to have] someone who is on the ground in foreign jurisdictions and can pick up this intelligence."
Professional guidance will also help you overcome the widely varying social conventions you'll encounter overseas as you interact with investors. For instance, Fugler says, in France you might be expected to shake hands lightly, while Italian investors generally like to shake, pat and interact on a more physical level.
Rapchinski witnessed that firsthand. When he was in Hong Kong, he says, the meetings during the day were very formal, but equally important was the socializing that took place in the evening. "It would have been very bad form had I declined to go out at night with our hosts," he says.
Finally, Fugler notes that professional counsel will help you develop the global angle your pitch and presentation require. "A U.S.-centric presentation might fly, but in most cases, it's a turnoff for foreign investors."
Courage. The last ingredient required for success is a healthy dose of courage. Fugler says, "It's not easy to travel to a foreign land with a different culture, several time zones from home, and walk into rooms full of people you have never seen before-who perhaps do not even speak your language-for the sole purpose of selling them something they may never have seen or heard about before."
But it's not impossible. Preparation and hard work frequently translate into success in financial markets. "Since going overseas is premised on going where the competition is not," Fugler explains, "once you make the choice to look abroad, it's probably best to be prepared for anything that comes your way."
flies in Europe will undoubtedly cause offense in Asia. If
you're going to go, go armed. Here are some must-reads for the
earnest entrepreneur making a capital pilgrimage
David R. Evanson is a principal at Financial Communications Associates Inc. and author of Where to Go When the Bank Says No: Alternatives for Financing Your Business(Bloomberg Press). Call (800) 233-4830 for ordering information.
- I-Bankers Securities, (212) 459-3765, firstname.lastname@example.org
- ReMark Partners Inc., (877) JOB-TAGS, www.jobtag.com