A founder pitched me earlier this year on his semiconductor company. The deck was clean. The market was real. The technology was genuinely differentiated. The Singapore entity was properly incorporated, the cap table looked orderly, and the revenue was growing.
Then I asked him three questions.
Where does your intellectual property legally sit? Who owns the entity that owns it? And if I wire money into your Singapore company tomorrow, what exactly am I buying?
He could not answer any of them cleanly. The IP sat in China. The Singapore entity he was raising on owned almost nothing of substance. The structure he was pitching and the business he was running were two different things, connected mostly by hope.
The raise was over before it started. Not because the company was bad. Because he had prepared the wrong story.
Founders prepare the product story. Investors underwrite the structure story
Most founders raising across borders spend their preparation time on the things they can see: the product, the traction, the market size, the team slide. These matter. But they are not where a cross-border raise actually succeeds or fails.
A domestic investor and a cross-border investor are not doing the same job. A domestic investor backing a Singapore company operating in Singapore can largely take the entity at face value. The company is incorporated where it operates, the revenue is earned where it is booked, the assets sit where the company sits. The investor underwrites the business.
A cross-border investor cannot do that. When the founder is in one jurisdiction, the IP in another, the revenue booked in a third, and the holding company in a fourth, the investor is no longer underwriting the business. They are underwriting the structure. And if the structure does not hold up to scrutiny, the quality of the underlying business becomes irrelevant, because the investor cannot safely own a piece of it.
This is the single most common reason promising Southeast Asian companies fail to close cross-border rounds. Not weak fundamentals. Unprepared structure.
The environment has made this sharper. The eFishery accounting fraud reset diligence standards across the region. Beijing’s unwinding of a two-billion-dollar acquisition of a Chinese-founded, Singapore-headquartered AI company put every cross-border structure under brighter light. Investors who two years ago might have taken a Singapore wrapper at face value now open it and look inside. Founders who have not looked inside it themselves get caught.
Also Read: AI agents could help Southeast Asian firms untangle cross-border payment costs
The questions to be able to answer before you pitch
If you are raising from an investor outside your home jurisdiction, you should be able to answer each of these without hesitation, with documents to back them.
- Where does your IP legally sit, and who owns it?
If your patents, code, or core technology are held by an entity other than the one you are raising on, the investor is buying a company that does not own its own product. This is fixable, but only before the raise, not during diligence.
- Can an investor independently verify your overseas revenue?
Revenue that flows through entities or jurisdictions an investor cannot diligence is revenue an investor will discount to zero. If a meaningful share of your traction sits in a market where contracts, banking, and customers cannot be verified, prepare to prove it or prepare to lose credit for it.
- Who really owns what across your cap table and holding structure?
Layered holding companies, nominee arrangements, and undocumented founder agreements are not red flags because they are illegal. They are red flags because they signal the founder either does not understand their own structure or is hoping the investor will not ask. Both end the conversation.
- Are your intercompany flows arm’s length?
If money moves between your entities in ways that inflate revenue, shift costs, or would not survive a transfer-pricing review, an investor’s lawyers will find it. Find it first.
- What happens to your structure if regulators act?
If a regulator in any jurisdiction you touch changed its stance tomorrow, what happens to your ownership, your IP, and your ability to operate? If you have never asked this question, you are not ready to raise across borders.
None of these are product questions. All of them are structure questions. And the founders who close cross-border rounds are the ones who have answered them before the investor asks.
What this looks like from the other side of the table
For the investors reading this, the same checklist is the discrimination that separates a real cross-border thesis from a hopeful one.
Underwriting a cross-border deal is not about liking the product. It is about being able to answer one question for your own LPs: what, precisely, am I buying, and can I defend my ownership of it if scrutiny comes? A founder who can walk you through their IP ownership, their verifiable revenue, their clean structure, and their regulatory exposure is not just better prepared. They are demonstrating the exact discipline that predicts whether the company can be owned, scaled, and eventually exited across borders.
Also Read: How a cross-border tech team built a fintech MVP in 3 months
The founders who cannot are not necessarily running bad businesses. They are running businesses that have not yet been built to be owned by someone in another jurisdiction. That is a different problem from product-market fit, and capital does not solve it.
This is the lens we apply to every company we look at across the markets we work in. The strongest signal in a cross-border pitch is rarely the product. It is whether the founder has done the structural work to be investable by someone who is not sitting in the same country.
Prepare the story that actually gets underwritten
The semiconductor founder I turned away was not a weak operator. He had built something real. But he had prepared to be evaluated as a product, when he was going to be evaluated as a structure. By the time he understood the difference, the conversation was over.
If you are planning to raise across borders, prepare both stories. The product story gets you the meeting. The structure story gets you the money.
—
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.
Join us on WhatsApp, Instagram, Facebook, X, and LinkedIn to stay connected.
The post The cross-border due diligence questions most founders cannot answer appeared first on e27.