When it comes to building a company on a global scale, most businesses take one of two approaches: 

  • A piecemeal strategy where you build your business market-by-market 
  • A global-by-default approach, where you make your products or services available to everyone across the globe from day one

During TechGC’s Going Global Virtual Forum, we heard insights from Colin Sullivan, VP, Legal at Patreon, Katherine Adkins, Chief Legal Officer at Affirm, and Brandon Wiebe, General Counsel at Transcend about how GCs can successfully navigate the challenge of going global tactically. 

Each of these growth strategies has a unique set of concerns and challenges you’ll face along the way. If you’re considering how to move forward with your business, read on for key of takeaways from their session below:

Laying the Groundwork for Expansion

When taking a piecemeal approach to going global, you’ll need to research the market-specific requirements for each new jurisdiction you want to expand into. Concerns you’ll need to address include: 

  • Hiring or investing locally – in some jurisdictions you will need to meet certain requirements in order to operate
  • You company’s tax liability
  • The structure of your company in the jurisdiction – can you hire a third party to run your business, or do you need to operate within the market directly?

The reality is that a lot of these concerns are surfaced after your executive team has already decided on a business strategy. Since there are lots of ways to enter a market, you need to push your executive team to decide on the business model at the beginning of the expansion process. You’ll then use this information to make sure all of the key elements of your business (licensing, business structure, etc.) are set up correctly from the beginning so that you can avoid making major adjustments later.

If you’re taking a global-by-default approach, you’ll want to launch into markets based on where your revenue is coming from. If your product is available to everyone in the world on day one, see where customers are using your product the most – does it make sense to make further investment there? 

As GC, your job is to be an expert on the business, not just the law. Realistically, you won’t be able to invest time and resources in every country, so focus on where your business can grow the most and where you need to support existing customers. 

Hiring and Investment in New Markets

For businesses taking a market-by-market approach, much of your strategy will be informed by your business license and structure. Look at the local requirements to figure out how much capital you’ll have to deploy to maintain your license and how many people you’ll need to employ within the jurisdiction. 

Additionally, you’ll want to have an internal, cross-functional team at your headquarters that brings together legal, compliance, and product. This team should be tasked with determining the amount of  market investment your business needs to make (in both existing and new markets) based on your company’s growth projections and regulatory needs.

For global-by-default businesses, expanding into a market essentially means a transition from a passive existence in a market to making a conscious investment in advertising, localization, and/or headcount. Before you set up an intentional market presence, ask yourself, “Is there anything we haven’t done yet to come into compliance before we become more significant?”

The reality is that it’s rarely possible to be 100% compliant in all of your markets when you’re a global business, so your biggest goal will always be figuring out how to be as compliant as possible in the markets that matter most to your business. 

Recommendations for Outside Counsel

Regardless of your expansion strategy, you’re going to need to turn to outside counsel to solve jurisdiction-specific questions. Local firms are likely going to have a different risk appetite, so it may make the most sense to work with firms that also have an established presence in Silicon Valley as they likely already know how to work with rapidly-scaling tech companies.

To understand where the gaps are in your legal team, you’ll need to have an established process within your business for information sharing. Having a recurring international sync with stakeholders from different teams – legal, privacy, product – is a great way to surface any jurisdiction-specific roadblocks that are affecting your business.

Regardless of how compliant your business is right now, there will always be regulatory changes on the horizon that will affect the operation and expansion of your business. Make sure your team is actively researching upcoming developments in your key markets so that you can allocate resources for outside counsel well in advance of any changes.

Final takeaways

Regardless of which strategy your business chooses when it comes to expansion, prioritization is the name of the game for GCs. Every company that’s truly operating globally is likely breaking laws or exposing themselves to liability at some level; your job is to understand which risks and liabilities need to be prioritized so that your company can continue to grow. Finally, keep in mind that it’s impossible to know all of the potential risks of every market, so turn to your executive leadership early and often to learn what keeps them up at night. Their input will help you understand where legal needs to focus as you expand.

TechGC members can always view the full panel discussion, as well as all other presentations from this event and other events, within TechGC’s member library. Are you a GC who’s not part of our community yet? Apply to become a member of today.