Series B Global Expansion Strategies

Introduction

Companies that have reached a series B level of funding usually will have established a degree of product market fit in their home market and raise additional financing to then pour fuel on the fire. They have a clear picture of their current customer, the pain point they are solving and the acquisition models. Company leaders looking to deploy series B capital often look overseas at untapped markets to expand their impact. While this is a viable strategy, it takes careful planning coupled with a beginners mind to re-establish product market fit for a new customer base. Money may solve some global expansion issues but success lies in the execution.

Regional Expansion

Companies taking the first step globally often run into two common errors, (1) expanding too quickly across too many countries and (2) expanding to slowly into a single market. Investors expect aggressive results and striking the right balance can make or break an expansion. A recommended strategy is to identify a single region, such as Europe or Latin America, that offers enough room for growth but remaining open minded to which particular country will be the primary market. Companies will often choose an office location in a business friendly jurisdiction to then manage that regions business.

Test Before You Invest

Startups should not hold any preconceived narratives about which country will be best or even which product/service mix will solve that local customer’s problem. All too often companies try to push their current product or service onto a local customer without first taking the step back to understand which local problem they are solving for. A go to market strategy should always build in an expectation that they first 1-6 months is purely for building, measuring, learning and iterating before real resources are spent.

Double Down

Once a team has gained tangible feedback from customers and identified a pain point the customer is willing to pay for then is the time to double down on resources. This may come in the form of team members, marketing budget, legal entity and other go to market strategies. The capital raised during a series B round can be highly valuable to accelerating success and ensuring compliance.

Hire a Local Operator

Companies with sufficient funding can afford to spend the necessary budget to hire a qualified local leader. The leader of a given country or region will act as an intraprenuer with a high degree of autonomy and ownership on the success. Hiring an under qualified person who does not understand the local market can result in underwhelming results. While cash strapped startups may not be able to pay up for the best talent, a series B backed company should allocate the necessary funds for this key hire.

Create a budget

Fundraising naturally involves the refined preparation of future growth models. A global expansion and the costs should be a key factor when outlining the planned strategy for post capital raise. Investors will look to understand how a global expansion will unlock new revenue while concurrently understanding how management is able to forecast budget. Global expansion is often fraught with unexpected costs so being able to accurately assess the costs will be an important variable.