If you own a small business in the United States, it may prove useful to find a foreign investor who is already self-identified as an “Angel Investor.” Foreign national angel investors look for promising start-up opportunities and provide financial support and guidance in the hope of turning a profit. They are called angels, but they do not always give money out of the goodness of their hearts. Angel investors provide financial backing to companies that have the potential to make a lot of money. They often will target companies that can also provide immigration benefits such as an E-b5 for family members.
Furthermore, foreign investment does not come without strings attached. If you find an investor who believes in your company, you can expect a significant amount of scrutiny. Many angels are former entrepreneurs. So, they know how to make money and how to organize a company. They won’t write you a blank check, but they can offer you guidance. They will likely expect progress reports along the way and proof that you will be able to make them money down the road. If their money is used as an Eb-5 investment, however, there can be no guarantees given to them of a return because that would violate immigration rules.
Finding the right investor can be a complicated process. There are many angel investors out there that specialize in specific industries. Instead of reaching out to a multitude of investors who have nothing to do with your business, try to focus on investors who have a history of supporting companies similar to yours. Working with intentional angel investment networks is a great start. Contact our office to begin this process.
Once you accept support from foreign nationals angel investors, they will own part of your company unless an agreement for a 5 year loan is made. That means that they will expect you to listen to their advice. They will want to be involved and they will expect a certain level of respect. Face-to-face meetings are essential to these relationships. Make sure you choose an investor who is able to travel to your location or who is willing to meet over Skype or another video conferencing program. Our office can help facilitate these meetings.
If you need more information or counsel, please contact our Los Angeles immigration office at (213) 375-4084.