So what’s a VC to do? here they are sitting on all this capital but they can’t find enough good companies to fund. The answer – widen the net – go global. Once that decision has been made then the possibilities become infinite.

There is a huge rise/return quotient when VC’s invest in companies outside the US. VC’s can certainly get a better bang for their buck overseas but they can lose their entire investment overnight. There is little recourse if a company goes upside down in a foreign country. Not only that, but there is also political risk as well. If the current government is overthrown the new government might decide to seize and take control of independent businesses. On the other hand if the business is too successful politicians who control government might feel they are not being adequately compensated and try to negotiate a bigger piece of the pie or force a change of control.

Foreign governments have very little sympathy for outside investors. In their opinion US based VC firms are taking advantage of their people and the companies they own.

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