Have you considered looking to international investors and VC firms based outside the U.S. to give your growing business the cash infusion it needs? It may be getting easier to do so.
The Financial Accounting Standards Board is in talks with Japan to merge GAAP accounting standards used in the U.S. with International Financial Reporting Standards, creating a worldwide standard for business accounting.
Benefits of Foreign Venture Capital
Many foreign VC firms are looking to partner with up-and-coming U.S.-based firms with revenue in the $250,000 to $2 million range. These foreign VC firms may not be looking for just a percentage of profits. Alternate arrangements can be negotiated which would be mutually beneficial, including:
- Royalties
- Technology licensing agreements
- Overseas sales agreements
Rather than just providing funds and seeing an ROI, they are interested in forming strategic partnerships with new U.S.-based companies, especially in the fields of technology, telecommunications, and healthcare.
Consistent Revenue Forecasting
Since one of the keys to obtaining venture capital (estimates say that 90% of companies seeking venture capital are rejected) is accurate revenue forecasting five years into the future, these international standards for bookkeeping and accounting will make it easier to communicate your projections and share your books with foreign VCs.
At AccountingDepartment.com, our bookkeepers already follow GAAP standards for business accounting. As new standards are adopted, we are committed to leading the tide of change and training our bookkeepers in the new, international accounting standards.
Our clients don’t have to worry about the expense and time of training in-house bookkeepers in new processes and procedures, or hiring a bookkeeper who understands not only GAAP principles but also IFRS.
If FASB reaches an agreement with Japan and other nations, venture capital possibilities for growing SMBs with accurate revenue forecasting and standards-based business accounting records will expand.
