International Searchers Inside the USA

International Searchers Inside the USA

The USA has the highest number of searchers in the world and a robust infrastructure to support them, yet many international searchers choose to return to their own country to find a business (See Blog Post – Searching Internationally). For this Blog Post I reached out to a dozen searchers with international backgrounds who launched their searches in the USA while overcoming a number of obstacles along the way. Any searcher can benefit from the observations and experiences these international searchers have reported.

Searching in the USA instead of “home” country

For many searchers, there is a perception that it is “easier” to search and operate an SME in the USA. Flo Servan, CEO of Onsite Truck and Trailer Service, says “France is much more employee than employer friendly. Also, the burden of hiring people is too high and too rigid, to the point that it gets in the way of hiring/firing decisions; I wouldn’t want to own a business there.”

Others just could not go back, as Alejandro De Marco at Cognitus Capital says, “In Latin America, relationships and contacts are hugely important. Venezuela was no longer an option for me, so starting from scratch in any other country would have put me in a very weak situation compared to operating in the United States. The US has a legal system that works. In the US, you can leverage your deal up to 90% with debt and rates are very low and stable.” Another says “I came to America to live and be an entrepreneur. I never gave a serious thought to going back to the UK.”

Many international searchers cited personal reasons for their choice. One echoed by Ben Murray at New Forest, now CEO of Cleanway Services, “I actively wanted to live in the USA. I felt that if I took the risk of searching I wanted to have the maximum chance of success which meant the largest possible pool of deals and potential investors in the USA, which has a much larger economy than the UK.” Julio Jimenez at Navalper relates, “My girlfriend is American and works in healthcare. She can’t practice in Europe. Being in Boston has many advantages including investors, advisors and qualified interns.” Another observation by Lars Gehre, at Greenvault, now Principal at AcuityPDQ, “I left Germany 11 years before getting my MBA, had married an American, and returning was just never a consideration.”

Be careful what you wish for as Hans Petersen, the Chilean founder of Meridional Equity, discovered, “Unfortunately, I underestimated the huge disadvantage of a more efficient US market. Searching from 2014-2016 with a traditional search fund I discovered had a much higher cost of capital than the competition from small PE firms. I had assumed the SF model works much better in the US than abroad with improved deal flow, know-how in the search community, and most importantly, the ease of doing business in the US, which results in a much higher success rate as a CEO. But I was unable to close a transaction.”

What was unique about your search?

A variety of international searchers discovered advantages over their US peers, as Marc Cussenot at Pacific-Oak and now CEO of Precision Emprise points out, “There is a positive bias for the French culture in specific industries – even though it did not work out, I tried the food industry and had good traction. For me, being an engineer is a “nice to have” when you talk to business owners, specifically those that have a technical background. Also, even though not the best place to search for a business, Northern California has had the advantage of being more open to foreigners.” Flo Servan says, “I think that as long as the language isn’t a barrier then being a foreigner can be an asset. I found it was a great conversation starter with anyone.”

Another searcher pointed out that, “I think that my background made it easier to start the conversation with many sellers over the phone. Sellers want to feel they are talking to a person they can relate to and breaking the ice with a conversation that doesn’t involve inquiring about their business (e.g. “where are you from?”) is really helpful.” Ben Murray experienced similar reactions, “Many sellers really understood my story of moving to America to run a business and I felt they were supportive. Embrace your background and don’t hide it.”

Marc Cussenot discovered an opportunity he could exploit, “Among the 3 businesses/sellers I signed an LOI with, 2 were immigrants and 1 had studied abroad; they had no problem with my background.” But, Paul Thomson, founder of Scottish American, warns, “Your accent means people want to talk to you and yet may not value your time – avoid that dead end.”

Overcoming Visa issues

Paul Thomson observes changes in the the USA over the last decade, “I was lucky with the H1B as timing really matters. It is usually oversubscribed by 3-10x, but 2010 was the only year it was not full. As a funded-search, I was an employee and the search LLC sponsored me. It was central to my fears for 5 years. Then later being the CEO of an acquired company qualifies as a green card job. The whole process with a lawyer cost about $10K. Don’t make excuses about the immigration process. Everyone has some issue, this is just part of yours. If you can’t get the Visa done then don’t think you can run a company.”

Utilizing good legal support is very important in this process, as Marc Cussenot observes, “The E2 Investor Visa required investing additional money in the range of $20-30K and taking a time-related risk since the Visa was granted after 6-12 months of searching. My legal advisor was great, Elizabeth Kirberger, ([email protected]”

Each country has unique legal rules and circumstances. For example, Ben Murray had to spend three weeks back in the UK waiting for an interview and says “Visa issues were a lot of work, requiring extremely careful planning, and also money. I would highly recommend using a legal advisor for Visa applications. Use an attorney who is experienced in your home country but is also a USA Bar Member. I used Nita Nicole Upadhye at NNU Immigration,([email protected]).” Flo Servan wryly observes, “Anything that can be used as an excuse not to search can easily be turned into an excuse to search.”

As of early 2018, there is an opportunity for searchers to obtain an H1B visa who qualify for the International Entrepreneur Rule, colloquially called a “startup visa”, generally sponsored by non-profit Universities. (See article on State Sponsored Visas).

Perception of others about your search

By and large, searchers reported no significant challenges with investors or sources of funding. SBA loans are available to Lawful Permanent Residents (LPR) who are not a citizen of the United States also known as “permanent resident alien,” “resident alien permit holder,” and “Green Card holder” which may an impact on self-funded searchers. Some sellers may be put off by dealing with international searchers as reported by Hans Petersen, “I believe some of them might have been a little bit skeptical with me being international. The deeper the relationship the better, but still another hurdle to overcome.”

Marc Cussenot reports his experience as “I don’t think it made a difference with most attorneys, bankers or investors. It was however a very different story with sellers. A seller needs to be able to identify with the buyer and to believe in him/her. It is obviously harder to identify to something/someone foreign. And I think there is little that can be done about it. My advice would be to increase your funnel size in order to improve your chance to deal with sellers that will have minimal bias.”

Julio Jimenez says, “I talked to many investors before I started my search and they all seemed open and ready to invest in the right opportunity. Being international was not an issue for them”. Some searchers reported having an “easier” time finding investor funds, especially if coming from their own country where business investments may be more risky. One searcher pointed out, “My network before grad school was mostly comprised of serial investors, business owners, entrepreneurs and bankers. The search model is still unique and many international investors haven’t heard of it and are more excited and interested.”

Another searcher, self-funded with a partner, observed “My search partner makes the initial pitch and tells our story and backgrounds. I show up after initial interaction. This partnership model has worked well for us”. Alejandro De Marco, found “I think that Sellers don’t care too much if you have an international background or worked most of your career in another country. They just want to know that you are capable and have some understanding of their industry.”

Advice from international searchers

Marc Cussenot reminds searchers, “A search is difficult. Being a foreigner makes it harder. Think twice and make sure you are mentally well prepared for the challenges.” Julio Jimenez reflects, “Don’t waste time talking to business owners more than 5 minutes unless they show early commitment to the value expectations no matter how intrigued they are about your ‘story’. Also, make sure that you talk to other searchers frequently, both international and local.”

Ben Murray says, “Be prepared to work harder than other searchers. You need to own the process for your Visa and do your research; don’t just rely on advisors or others. Find sellers who will buy into the fact that you are making an extra commitment to their business by leaving your home country.” Hans Petersen cautions, “Get advice on how to develop a personal relationship with a seller, not just the deal. Listen more and speak less when in front of a business owner.”

Another searcher/CEO says, “It is an added risk to be an international searcher in the US so have a plan. It is important to build a narrative around the United States and why this is where you want to be long-term.” Flo Servan cautions about searching with a partner, “I have learned so much about myself while searching that if I was the perfect partner for someone at the beginning, I probably wouldn’t have been so at the end of my search.” While another says “I could not have been successful at this without my US based partner, just be sure it works for you”.


International searchers who focus on the USA, must tackle additional challenges to be successful. Preparation, persistence and patience are the watchwords for them. As all the searchers above have related, turning their “deficiencies” into “features” pays off with sellers and their other resources during their search.

Search on!

Feel free to share some of your own best practices or experiences in dealing with these issues in the blog comments. I encourage comments and dialog, allowing all in the community to learn from both my views and the views of others – a virtuous learning cycle. Jump right in! I frequently update individual blog posts, add to the Reference section and Search tips, so visit website regularly.

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Posts – Most Recent

Posts – Contemplating a Search

Posts – Launching a Search

Posts – Conducting your Search

Posts – Being CEO/Owner

Random Quote

45-“Strategic partners” are very important to the business searchers.You want to rely on some trusted providers to support your business, you can’t do everything yourself!(See Blog Post-Strategic Partnerships)

42-Start early on legal documents, they often delay closings while under LOIBoth the searcher and the seller are plowing new ground and it takes a while to comprehend the meaning of all of the legal details .(See Blog Post-Getting to closing)

63 Searchers make promises they can meet to build trust with sellers. It is important to provide incremental opportunities to show that you can be counted on to deliver.(See Blog Post-Building Trust with Sellers)

34 Searchers who get access to employees before closing are more likely to close. Once the seller begins to confide in their employees about the sale of the business and introducing you as the “new owner”, they are more likely to proceed to finalize the transaction than to change their mind at the last minute.(See Blog Post-Getting to Close)

07-You are not a PE firm, don’t act like one!
Potential sellers resonate with your taking over their legacy, a PE firm is simply adding to their portfolio. Make sure your website looks personal and non-intimidating.

04-Fight Seller Fatigue in Due Diligence!
Sellers get worn out in this process. It is highly emotional for them, probably their first time at relinquishing their “baby” to someone else. During LOI stage, make it a practice to communicate with them, in person or by phone, every 2 days.

53-Holding monthly “all-hands” meetings indicates your transparency. Trust employees with what is going on with the business and they will trust you more .(See Blog Post-Communicating with Employees)

06-Use metrics to drive decisions
Track what is most important for your search – getting in front of prospective sellers to make offers to buy their business. Track the number prospects, IOI’s, LOI’s and set goals for yourself! If you measure it, you can improve it.

22-When in conflicts arise, remind professional advisors they work for you.
Inevitably, you will disagree with some advice you are getting. After checking multiple sources, do what feels right to you and move forward. You will have to “live” with your own choices, not the professionals!(See Blog Post-Professional Support)

18-Every day that goes by during Due Diligence raises the chance that you won’t close!
Time is of the essence when it comes to moving from a signed LOI to closing on your business. Seller fatigue sets in as the closing date gets extended and the seller constantly re-evaluates their motivation to sell. Only you can push the process along.(See Blog Post-Due Diligence)

44-Plan ahead, give thought to the small details of how you present yourself as the new owner. The first introduction to the employees of the business has a huge impact so you want every word to be rehearsed!(See Blog Post-Taking over the business)

50-Don’t expect immediate “loyalty”, the previous owner earned it, it takes time. You will need to earn the trust of your employees by your actions, not your words. (See Blog Post-Seller Tranisition)

35-Searcher CEO’s need to be prepared to walk away from volume orders if margins will decline. It takes a forward thinking CEO to seek out higher margin, value added opportunities to grow profits, not revenue.(See Blog Post-Wearing the sales hat)

09-Learn from others – read case histories
Over 40 case histories have been written about funded and self funded searchers in a variety of industries and historical settings. Each have great “lessons learned” and are worth the $10 cost to read them. Searchers are learners!

39-The business seller is “hiring” you to run their business. The owner trusts you enough to turnover the “legacy” of their business to you. (See Blog Post-Searcher Profile)

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