USA Startups • Can UK invest?

Can UK citizens invest in US startups? Or any other country’s startup companies?

Tnx

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You should be able to invest in the US through platforms like SeedInvest as a UK investor.

Although some startups will require you to be an accredited investor. In that case US citizenship might be required (on top of revenue / net worth requirements)

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In short, which tax & other costs would be incurred by investing in overseas startups? Can this become complicated when a company get bought out or IPO’s?

General answer is perfect.

Anyone had a look at SeedInvest and seen any companies that look decent? I’ve pretty much seen all of Crowdcube, only Freetrade and Money Dashboard got my interest.

I’ve invested in WeFunder companies, and also Fig games. I’m less likely to invest in US startups because it lacks the EIS tax break.

I’ve only had one exit so far, Phoenix Point, a return of ~85% after tax. I had to get out of the Phoenix Point investment early via secondary sale, because it was set up in a very tax inefficient manner had I let it mature. But I’m still very happy with the outcome.

Take a look at Wefunder. I’ve recently backed TBJ on there, they make bacon jam. Bacon. Jam.

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What was the problem?

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That specific investment vehicle pays out dividends and then retires the shares. So you make a capital loss, and all your gains are taxed as dividend income.

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That’s insightful thank you. So hypothetically if an American startup were to IPO and your investment was worth £5k, what would we expect to pay in taxes/fees/exchange rate? A rough percentage?

Should that company be bought out, again, when paid out, roughly what would a UK investor be faced with?

The taxes would be just like any UK investment which isn’t EIS/SEIS. You would not pay any additional US taxes. It’s just like buying/selling a US share. I use Revolut because it provides £5k of free forex per month, and US wire transfers are free.

You do pay a US withholding tax of 15% on dividends, but that’s not typically a crowdfunding stage concern.

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Just made a small investment on Travelmate robotics on Wefunder, I want one of those suitcases!

What made you go for it? Interesting idea, but they don’t have any proof of it actually working in a real use case environment. There’s nothing showing how it will interact with strangers, I imagine people will be tripping over it all over the place, seems like a serious health and safety risk, imagine it in a busy airport where people aren’t looking down at the ground.

I watched a video of the product at a conference and it looks really awkward, the company doesn’t even trust their own technology, so much so that he has to keep looking back at it (https://www.youtube.com/watch?v=wy4EIcHaTIw&t=11s). Seems like the technology is not good enough for the user to ignore the suitcase and trust that it will follow them satisfactorily.

Only a very small punt, interested in what it will be like in the future not now, if they get it right could be an awesome product,