UK Cyber Companies: Entering the US Market
Kaye Scholer attorneys from multiple practices and offices participated in UK Cyber Companies: Entering the US Market on March 12, 2015. The multipanel event, hosted in our London offices with other Kaye Scholer offices participating via videoconference (VC), was moderated by representatives from the entrepreneur-focused UK organization cyberY.
Topics and panelists included:
- “US Government Contracting & Regulatory Framework” with DC-based National Security, Government Contracts & Regulatory Compliance Department Counsel Bob Wagman (VC).
- After briefly outlining the scale of the US federal market ($13billion on cybersecurity in 2015), Bob described various government acquisition regulations, as well as supportive environments, to be aware of when selling into this space. Federal Acquisition Regulation (FAR), Government Services Administration (GSA), US Small Business Programmes and IP approaches were all covered.
- “US National Security Regulatory Overview: Export Compliance, FOCI Mitigation for Classified Work, and CFIUS Reviews” with DC-based National Security, Government Contracts and Regulatory Compliance Department Chair Farhad Jalinous and Counsel Karalyn Mildorf (in London).
- Karalyn covered regulations relating to ITAR and EAR, followed by an explanation of Foreign Ownership, Control or Influence (FOCI). Special Security Agreement, Proxy Agreement, and Security Control Agreement mitigation arrangements to enable work on classified contracts were also described, with Farhad explaining the differences in board structure, access restrictions and where the control from foreign ownership is or isn’t allowed. CFIUS was also explored.
- “Doing Business with In-Q-Tel” with In-Q-Tel Associate General Counsel and former Kaye Scholer associate Brandt Pasco.
- Brandt highlighted four key areas of investment: field deployable technologies, infrastructure and security, advanced analytics and mobility, as well as the best ways for companies to partner with In-Q-Tel.
- Considerations for Establishing a Company in the US” with NY-based M&A Partner Steve Canner (VC).
- Steve discussed the pros and cons associated with the variety of approaches available to companies entering the US market, from setting up a new US entity versus acquiring an existing vehicle, through to legal structures and which jurisdictions are optimal for the new entity.
- “Tax Issues for Companies Looking to Do Business in the US” with NY-based Tax Counsel Gregg Benson (VC).
- Gregg detailed the many tax implications for UK companies wishing to operate in the US, an often challenging and complex topic for start-ups—and one with serious down-stream consequences for ill-prepared businesses.
- “Business and Fundraising Considerations for Doing Business in the US” with Silicon Valley-based Emerging Growth Practice Leader Robert Claassen and Corporate Department Counsel Helen Christakos (VC).
- This session focused on considerations for foreign companies looking for investment from angels and VC Funds, with a detailed explanation of how the investment process has changed over the last 10 years due to lower start-up costs (enabled by changes such as cheap cloud-computing), more boot-strapping and the VC funds typically coming in at a far later stage.
Attendees for this well-received event were CEOs and CTOs of cybersecurity start-ups, SMEs and friends of cyberY, with the nature of the companies ranging from cyber consultancy through to pure technology companies.