If there was a list of ‘hardest things a founder can do’, scaling a UK or European business into the United States would be near the top.

Every year, many ambitious early-stage companies try to make the jump and scale up in the US. The prize? Access to the most seasoned venture investors, leading technical and commercial talent, and the world’s deepest market.

But most founders taking on the challenge will face an uphill scramble for relevance, capital and momentum.

Like infamous boxer Mike Tyson once said, "everyone has a plan until they get punched in the face." So what punches should founders anticipate as they enter the ring across the pond?

When Paul Fifield started his career in tech, "there were two US venture capital (VC) funds in London: Accel and Index. That was it. Now there are 60 US funds operating in London and investing in UK and European startups."

A former founder, Paul is an advisor at venture firms including Bessemer Venture Partners and Episode 1 Ventures. He also leads "In This Together", a network of US-based angels and family offices investing in startups located in Europe – so he’s familiar with the deep and complex relationships between US investors and European companies.

Although an influx of US VCs setting up in Europe means more capital for early-stage companies, founders should be cautious. US investors on your cap table will very likely expect a future expansion into the States.

Whether or not a fund has an office in the UK or continental Europe can also affect its approach to potential UK and European investments.

He adds, "One important change from years past is that US funds operating in Europe are happy to invest in seed and Series A rounds here irrespective of US traction, not just from Series B onwards once you’ve achieved it."

Despite a growing number of potential investors, timing a US expansion is still tough.

Matt Oxley, co-founder and President at software company Opal, now advises founders planning to expand to the States as a partner at US Expansion Partners. He’s quick to stress the importance of picking the right moment.

Another important lesson is the importance of parallel financial planning. "You really need 18 months of runway for your US operation before you make the move. Can you spare that cash based on your burn rate at home, when you still need to invest in growth and keep the lights on in the UK?"

The corporate structure of your business will always be core to your financial planning.

Many founders preach that incorporating in the US – most often in the tax and business-friendly state of Delaware – is the logical route to building scale in the States. This is often as a wholly owned subsidiary entity to the UK (or European) parent company. In most cases your business can operate normally in the US under this structure.

However, if US investors offer you a term sheet for funding, they may include conditions that require a ‘Delaware flip’ to complete the investment.

The term ‘Delaware flip’ is used for a corporate restructuring where a newly-formed US parent company in Delaware exchanges shares in the original company for shares in the new US company. The US company therefore becomes the parent entity.

The most common trigger point for a Delaware flip is when a company is receiving investment from US VCs. So when might a Delaware flip become a realistic option for your business? And what are the pros and cons of a flip?

As long as there’s a concrete business reason to do so, it often pays to move earlier rather than later, says Stacy Kim, partner at law firm Wilson Sonsini Goodrich & Rosati. The more complex the corporate structure, the harder it is (and the longer it takes) to execute a Delaware flip.

"For a pre-seed or seed company with a very simple cap table, it’s possible to deliver a Delaware flip in days or weeks. But for more mature companies with complex tax and equity considerations, it can take significantly more time – I can think of examples that have taken two years or more from end to end," says Stacy.

Paul agrees: "This wasn’t always the case, but nowadays US investors with no European outpost are very comfortable investing in companies headquartered in the UK or Europe nowadays, particularly at Series B and later."

Whether or not a flip is a mandatory condition of new investment, founders often ask lawyers like Stacy whether the restructure is worth it. "While it inevitably varies from company to company," says Stacy, "one rule of thumb is that the more cash a flip unlocks, the easier the decision gets." If you’ll receive $100k in new funding post-flip, the trade-off might be less compelling for founders than if a new investment of, say, $2 million is on the table.

Making a move to the US is not just a question of corporate restructuring. It requires boots on the ground and those early hiring decisions come with their own risks.

"We recommend that a founder moves out to kickstart the US go-to-market motion. Your US customers will really buy into a scrappy founder story, which you lose when you have a US hire spearheading your sales as a new market entrant," says Matt.

Often, companies opt to hire a senior VP Sales or Chief Revenue Officer to lead commercial efforts in the US. The problem? "Your early hires have to build the go-to-market machine," says Matt.

You may also need to rethink your mental model when it comes to compensation. Salary and equity expectations for US hires  are significantly higher than market standards in the UK and Europe.

"US pay is just in a different league," says Paul. "Full on-target earnings for an enterprise salesperson in San Francisco can easily hit $500k - 50% base salary, 50% variable, and that doesn’t include their equity."

If you opt to bring a senior executive on board to lead your US expansion efforts, the financial commitment will be bigger still. You’re making a huge bet that they’ll quickly deliver a return on that investment, and that’s never guaranteed. Paul says, "Whilst hiring functional leaders like a VP Sales or VP Marketing that report into their respective C-suite leaders will be needed as you grow, I almost always advise founders against making a senior exec hire to run the US business overall as it invariably leads to a chaotic and misaligned org."

Once you’ve relocated, you’ll still need to keep an eye on your UK or European base, even if you’re primarily focused on scaling the US business. Your choice of US HQ  could make a big difference to the level of interaction you’re able to maintain with your home market. "No question, setting up shop on the East Coast gives you significantly more overlap across normal working hours," says Matt. "There is barely any direct collaboration time if you’re located in San Francisco or elsewhere on the West Coast."

What other shocks might confront founders as they get their US business off the ground? "The banking system in the UK is actually very well-integrated and simple to understand compared to the norms in the US," says Stacy. "It can take much longer to get set up with your business banking in the US."

Adapting to US corporate culture also requires foresight. "You need to make sure your trademarks, logos and other intellectual property are protected. You’re moving to a much more litigious climate – if you mess up, lawsuits could be a punishing and costly distraction," Stacy says.

Apart from these practical considerations, it’s important to remember the toll this kind of move takes on the founder.

"Few founders fully prepare for the reality of the first weeks and months after relocating," says Matt. "You’re grinding out long hours without the comfort of your friends and network back at home. If you’ve persuaded your partner to make the move with you, unless they’re a US citizen they’re unlikely to be able to work. So you have a mix of stresses that will be unlike anything you’ve experienced in your founding journey so far. The emotional side  can often be tougher to handle than any commercial challenge."

Every founder’s US expansion experience will be different. Some companies will undergo a full reincorporation while others may be more surgical in their approach. But some commonalities will affect every business. The battle for relevance in the US takes grit and perseverance.

Planning and timing are vital. Such is the importance of hitting the ground running, founders are well-served by building their extended team of partners, advisors and other supporting stakeholders before the move happens – don’t wait until your first working day to start building those relationships.

Companies can also start to solve for the elusive US product-market fit before a formal expansion takes place. Paul Fifield says: "Test as much as possible before you go. Learn intently about your US customers’ behaviour – does your US customer base behave differently from European buyers and users? Or not? Those insights will be critical."

One positive note from Matt Oxley: "While you can go too early, it’s never too late for founders. The size of the economic opportunity in the States can be transformative for startups and scaleups alike."