5 Mistakes to Avoid When Raising Money Overseas

Raising capital overseas in 2025 comes with unique challenges. With a fast evolving backdrop of global economic uncertainty and geopolitical instability, raising money internationally looks very different now compared to even a few months ago. Currency fluctuations, especially continued swings in the US dollar, have added financial risk to cross-border deals, while wider economic uncertainty fuelled by stubborn inflation, mixed signals from central banks, and global political tensions, are making investors increasingly cautious.

But deals are still happening, and businesses that can prove resilience and efficiency are likely to come out the winners, particularly if they have diversified international sales. According to the experts we asked, for the time being at least, investors based outside London seem to have a bigger appetite for risk, so looking internationally for funding could be the smartest move.

So what are the mistakes to avoid when raising money overseas and how can startups put their best foot forward to secure international funds?

Mistake 1: Clinging to domestic markets for too long

For many businesses the idea of raising money on home turf might seem appealing. No language barrier, no FX risk, and potentially more professional connections, but with appetite from UK investors waning and other markets like the US, Middle East and Asia heating up, startups who don’t look across the water may miss out on funding opportunities, better valuations, and more receptive investors.

Marcus Webb, who works for London accountancy firm Haysmac, advising fintech founders on how to raise money, observes: “Capital markets have been subdued for a significant period, both in the UK and globally. The question that many fintech businesses are facing is “where to raise capital?”. The recent buyout of Deliveroo and comparisons to DoorDash shows how London appears to be falling out of favour for investors and businesses who are now looking for opportunities internationally.”

Startups who can think strategically, and target investors where capital is more readily available and investor interest aligns with their sector, will fare much better than those who focus solely on domestic deals. Hanging on for that UK deal could see competitors who act faster gaining a significant advantage.

Mistake 2: Ignoring the investor’s economic lens

Walking into an investment negotiation without acknowledging the current climate of economic uncertainty could be a costly misstep.

In today’s environment, investors are scrutinising every opportunity. Inflation and market volatility has shifted their risk appetite and made them more cautious - so gaining their confidence is key.

It’s vital then that founders can demonstrate they understand this context and are able to clearly demonstrate:

• Capital efficiency
• Operational resilience
• A credible path to profitability

Framing your pitch with this awareness not only shows maturity, it builds trust and sets the stage for a more grounded, constructive discussion.

Mistake 3: Not mitigating for currency volatility

Currency volatility, particularly with the USD experiencing significant fluctuations, can significantly impact deal value, fundraising targets and future returns. Not accounting for FX risk in your financial planning would be a big mistake, according to Marcus Webb, HaysMac:“With volatile markets it’s important to mitigate any risks that are within your control, with exchange rate risk being one of these. If you don’t have a natural hedge as part of your trade, purchasing an FX option can mitigate the risk of volatile exchange rates and their impact on your capital raise, albeit at a cost.”

It’s something Natia Kurdadze, founder and advisor to high-profile SaaS startups also highlights: “Accepting investments in foreign currencies can expose your startup to exchange rate fluctuations, potentially affecting the value of the investment and complicating financial reporting. Use a single base currency (e.g., USD or EUR) for all fundraising agreements and specify it clearly in the investment contract.”

Mistake 4: Not researching regulatory requirements

Each region or even province can have its own rules around capital raising, foreign ownership, tax compliance, data protection, and financial disclosures. What works in the UK may be non-compliant elsewhere, and getting this wrong can damage investor confidence or even result in legal action.

“Different countries have varying security laws. For instance, in some European countries, the concept of a future equity or SAFE agreement might not be recognised, potentially rendering the agreement unenforceable.” says Natia Kurdadze. Having the right expert on hand can circumnavigate this sort of issue though, as there is usually a work-around, as Kurdadze continues:“A jurisdiction-neutral alternative like a convertible loan agreement or an Advanced Subscription Agreement (ASA) would be a suitable alternative.”

Mistake 5: Not localising your story

Looking for investment overseas means pitching in another culture, and sometimes another language, so it’s important that you adapt the story of your business to suit the audience. Points of reference like competitors or milestone achievements need to resonate with your investor audience so it could be worth investing in some local communications support.

It’s something Jason Hishmeh, investor and entrepreneur with over a decade of experience building tech startups has first-hand experience with: “I’ve seen founders get blank stares after bringing a pitch deck that dazzled in Silicon Valley straight to Berlin or Singapore. The truth is, things can fall flat in one country, even if they worked in another.”

Research is the antidote, says Hishmeh:

“Investors abroad want to know how you fit into their world, not just yours. Don’t walk into the room half-prepared by not taking the time to understand local trends, competitors, and cultural cues.”

And if you don’t know the answers, hire someone locally who does, he says: “Get local legal advice early and keep things simple. A deal buried under layers of fine print they’ll have to untangle is a venture that no one’s excited to invest in.”

Raising capital overseas is likely to become more and more popular with UK startups. With cautious UK investors and growing international market opportunities, opting for an overseas investor could open up new markets, receptive backers and positive momentum. Founders who do their homework, adapt to local market expectations, and present a resilient, globally relevant story will be best placed to unlock the overseas capital they need to scale.

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