A note for founders and early-stage startups looking to expand to the US
Captivate Talent has helped multiple European and Israeli founders hire their first employees in the US. We've helped companies of all sizes build their first US revenue team—from Series C and later businesses like Paddle and Cognism to earlier stage startups like Abacum.
During this time, we've developed expertise in helping startups prevent typical errors and setbacks while recruiting in the United States.
Hiring in the US is an exciting time for international business owners and leaders. The move to the states is usually a result of capturing a large section of your addressable market at home or early traction signs for a US customer base.
The team you build is a critical factor in the success of any US go-to-market strategy. Making the wrong hires can kill your dreams to become a tech giant, fast.
So in this guide, we'll go through:
- How to approach and solve for company culture when expanding
- Compensation tips and strategy for US hires
- Compliance laws that need to be kept in mind
- Considerations for early hires and resources to support your market entry
- Where to hire your first employees in the US—locations to hire in
And with that, let's dive in!
When should I consider expanding my startup to the US?
From our experience, the most successful US expansions happen when:1
1) Companies have reached market saturation in their current market and need to explore other markets in order to grow—ex. A European startup has reached market saturation in the European market.
2) Companies have key clients in the states or have seen proof of demand for their product or service in the US.
3) Companies have their VCs or seed funding based in the United States—if you're a SaaS company that's working with US-based investors, you probably want to be close to them.
4) Companies are struggling to find the talent they need in their domestic market and are hoping to solve those issues with a US talent pool.
If your startup falls into any of those categories, keep reading!
Should we consider working from our home country into the US market before hiring a local team?
This is a common question we get from startups looking to expand to the US.
We definitely recommend before making any hires here, that you test out your comfort level and potential success in the US.
This important step can create more confidence before fully committing to a US go-to-market strategy.
The first step in hiring in the US: Get ahead of brand challenges
When you expand to the US, you need to expect that most candidates you are approaching will not know anything about your business.
Your startup might be popular in your domestic market, but your existing brand will not carry over unless you are a well-known and established company.
"You have to understand that your brand power will not have the same pull here. You have to be prepared to put a lot of resources around awareness, marketing, and sales before you find success in the US."
- Chris Gannon, Founder of Captivate Talent
As a result, you will need to differentiate yourself from startups in the same niche or vertical competing for talent.
Look at how your competitors in the North America market are pitching candidates—what's their sell to top performers, how does their brand come across to talent?
You may also need to put in a lot of resources around awareness, marketing, and sales to convince high performers and get them to buy into your business plan here.
It's much easier for talent to pick a business that's established its presence in the US vs going with a newcomer that will need to build customer base from the ground up.
How to balance company culture when expanding your market
One big misstep we see overseas CEOs or founders make when expanding is trying to bring existing company culture over.
We all know that culture fit is very important when building a functional team in a new market. However, it is important to understand that cultures in different countries can be very different from culture in the US.1
We strongly recommend using your expansion as as an opportunity to acclimate and build a multicultural team rather than forcing your existing culture to new hires here.
How do I bridge potential culture gaps between existing employees based overseas and new US hires?
Even though you should build a new company culture in the US, your new employees are still going to have to work with current employees.
To avoid any culture differences, you should lean on your leadership team. Executives and leaders need to lead by example and show sensitivity to cultural differences.
By starting at the leadership level, you can help all employees feel like they are part of one team while respecting the cultural values of where they might live—this is the best way to build a successful multicultural team.
Compensation tips and strategy for hiring in the US
The cost of hiring in the United States is generally higher than in other global locations, including European markets. There are two main reasons driving the cost:
1) Compensation packages are more costly in the US—salaries and the upside for commission are considerably higher.
2) Benefits packages are more expensive—benefits can cost a few hundred dollars per employee so you should budget accordingly.
European founders, Indian startups, etc. need to be prepared for the high cost to hire here.
If you don't offer a competitive compensation package, you risk attracting subpar candidates.
Important compliance and hiring laws to know when entering the US market
There are many employee-friendly regulations and hiring practices in the US that can differ from your domestic market.
Here are two common compliance issues you want to avoid crossing:1
1) Questions around race, gender, family makeup, and age are not allowed to be asked.
2) Many states are now requiring minimum salary thresholds that must be included on job descriptions.
Founders and leaders that aren't familiar with US hiring regulations should consider finding a local partner that can help avoid potential legal issues.
The recommended approach for building a US team: Experience and supporting resources
Each expansion effort is unique but there are some general guidelines you want to follow when building a team in the states.
Based on our experience helping multiple European and Israeli founders expand to the US, here are some tips we recommend following when hiring your first US employees.
Consider slightly over-hiring for your first US employee
We've seen European startups, Indian startups, etc. struggle to gain traction because they under-hired for their first employee—they didn't have enough experience to help grow the team here.
"Our philosophy is that you want to slightly overhire for a role here, to have somebody that has a bit more experience."
- Chris Gannon, Founder of Captivate Talent
This is especially important when you're making your first revenue hires in the states. You want to avoid a situation where your revenue hires are unable to create a new pipeline when you expand in the United States.
Hire candidates with experience dealing with foreign businesses and customers
Earlier, we talked about the importance of using expansion as an opportunity to build a multicultural team rather than forcing an existing company culture on US employees.
Even though it's important to find a balance for culture, you need your first hires to have international awareness and understanding of different cultures.
We've found that it's helpful to hire someone who has either:
- Traveled to the country they'll be working in
- Has a general understanding of the startups' local market in order to work effectively with customers and team members with a wide range of backgrounds
What kind of people resources and budget resources do I need to plan for?
If you don't have US customers yet, you need to expect that any clients based here will want local US-based support.
Similarly, any top performers you're looking to hire will want to have local resources that they can tap into.
Sales leaders will want to make sure they have some marketing resources that are locally based. Customer success teams must also be set up in the US to provide customer support to US-based clients.
"You really have to think of when you build a go-to-market team here, you need to build it holistically. You can't get away with just hiring the salesperson."
- Chris Gannon, Founder of Captivate Talent
When expanding to the states, you can't expect new employees to success with minimal input and resources from the team back at headquarters.
Proving the right mix of resources is as key to success as hiring the right people.
The hiring location debate: East Coast or West Coast? Do founders or leaders have to move?
Your early employees in the US might be considered remote at first, but that doesn't mean you shouldn't consider candidate location when hiring.
Picking a hiring location should be a strategic decision, one that balances founder location with working hours for US employees.
The right hiring location should allow for:
- Effective communication and collaboration across time zones
- Easier travel between teams when in-person collaboration is necessary (i.e. onboarding, key meetings, retreats, etc.)
Picking the right hiring location
The hiring location decision should based on where your startup headquarters are.
Even though work will be remote, you want to maximize working hours between team members. That means picking a location that provides overlapping working hours and easier travel between both locations.1
For European founders and startups or Israeli founders and startups, we recommend hiring on the East Coast to get the most overlapping hours.
For Indian startups, Australian startups, and other APAC startups, hiring on the West Coast will give you the most overlapping hours.
To ensure success, founders and leaders should plan on either flying out to early US hires or bringing them in to headquarters for face-to-face meetings. This is a lot easier to facilitate when locations are closer.
Founder location: Do founders or key leaders need to move to the US when expanding?
It is helpful to have a leader based in United States as you set up operations in this new market.
Founders should be prepared to move if necessary but you can also send a key leader.
The goal should be to send someone that can help set up US-based operations for the first few months.
Whoever you pick, whether it's a founder or leader, should be focused on getting operations set up. You want to avoid sending someone who will treat the travel as getting a vacation.
So to sum up, founders don't necessarily need to move, but having boots on the ground for a few months can be helpful as you're hiring and recruiting a team in the states.
Expectations for your first US hires after expanding
If you've had success in your domestic market before expanding (i.e. Series B, Series C, etc. companies with traction) it can be easy to think that results will follow immediately.
Expansion ≠ Immediate Revenue
We've seen most startups that expand to the US take several months to two years before seeing significant revenue impact. It takes time to build and execute a new go--to-market strategy in a new market.
The sales cycle in the US can be slow moving. You may need to play the long-game to create impact and win business.
To create the highest likelihood of success, we recommend aligning on your go-to-market plan with candidates during the interview process. Finding alignment with new hires is key to success.
Common mistakes to avoid when building a US team
To ensure the most success in expanding, we've put together this list of common mistakes to avoid hiring the US. This list is based on our experience from helping multiple European founders, Israeli founders, and APAC startups expand to the US.
- Not committing enough budget and resources to hire top performers and support the go-to-market plan in the US—avoid dipping your toe and not fully committing.
- Under-hiring on experience for a specific role or under-hiring for the team—saving money by under-hiring is not worth the potential opportunity cost.
- Hiring someone that doesn't have experience dealing with international employees.
- Trying to force existing company culture upon new hires in the US—build a multicultural team instead and use this an opportunity to acclimate.
- Hiring in a location that doesn't allow for easier communication, collaboration, and travel—ex. If you're a European startup, you should be hiring on the East Coast.
- Not using a local partner who understands compensations and benefits plans in the US, or could help with compliance and hiring laws.
- Expecting immediate results upon arrival—US sales cycles can be slower and things can take several months to a couple years before generating momentum.
Closing thoughts on hiring in the US market
Expanding to the United States can be an exciting time for startups—usually the result of traction in this market either through sales, networks, or investors.
But if you don't approach building your US team strategically, you can set yourself up for an expensive mistake.
Make sure to provide plenty of budget and supporting resources, and be prepared for the higher cost of talent here.
If you can avoid common mistakes, you can set yourself up for success and create an even strong business.
If you need help hiring your US team to expand, consider working with a local partner like Captivate Talent. We have years of experience from helping other startups expand here and are happy to share our local knowledge to support your expansion efforts.