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Expanding into the US or raising capital from US investors is a milestone many Australian startups aspire to reach. It can unlock scale, capital, and opportunities that simply don’t exist elsewhere. It can also expose weaknesses in structure, governance, and planning that founders may not realise were there.
In our recent Tally Tales conversation with Omeed Tabiei, a San Francisco–based startup lawyer and multi-time founder, we unpacked the most common mistakes he sees Australian founders make and what they can do to avoid them.
Here are the ten most important lessons from that conversation.
The pace of the US market surprises almost everyone. Investors move quickly, customers move quickly, and opportunities appear and disappear fast. Founders who are not structurally prepared often struggle to keep up, even when demand is strong.
Speed is a competitive advantage in the US, but only if your legal and governance foundations can support it.
Many founders have loosely held plans to expand into the US one day. Problems arise when those plans are not translated into clear milestones or preparation.
The biggest mistakes happen when founders are forced to make structural decisions under pressure, usually because an investor or customer demands it.
One of the most dangerous missteps is operating in the US before setting up a proper US entity. This can create complex tax and compliance issues that are difficult and expensive to unwind later.
US investors expect to invest into a US parent company, typically a Delaware C-Corporation. This often requires a Delaware flip, where the US entity becomes the parent and the Australian company becomes a subsidiary.
The cleanest time to do a Delaware flip is before you have meaningful US customers, revenue, or operations. Once US activity flows through the Australian entity, restructuring becomes more complex and may even derail investment altogether.
US investors are professional risk managers. They reduce uncertainty by relying on well-established standards such as:
Investors also scrutinise cap tables closely. Messy equity allocations, undocumented promises, dead equity, or too many small SAFE holders are all red flags. A clean cap table tells investors that the founder understands long-term value, not just short-term survival.
Founders who align with these expectations signal credibility. Those who do not create unnecessary friction.
Pitching the wrong type of investor at the wrong stage is a common mistake. Angel investors, pre-seed funds, seed funds, and Series A investors all look for different signals.
Even if an investor calls themselves “early stage”, their actual risk tolerance may be much later than founders expect.
Founders often underestimate the long-term impact of early equity decisions. Over-allocating equity to advisors, developers, or early contributors can lock up value and create dead equity that investors strongly dislike. At the same time, holding it too closely and not using it as a tool to build value, can be to the company’s detriment.
Equity should be treated as one of the most valuable assets the company has.
Raising capital and exiting a company are more similar than most founders realise. Both rely on:
Cleaning this up later is painful, expensive, and often avoidable.
US expansion is not just a growth decision. It is a governance decision.
Australian startups that treat structure, equity, and documentation as strategic assets rather than administrative chores put themselves in a far stronger position to raise capital, move faster, and exit successfully.
If the US is anywhere on your roadmap, the work starts much earlier than most founders think.
You can watch the full episode here: https://www.youtube.com/watch?v=SN7v-Ru35rI