#The Flip — Restructuring Into a Delaware or Singapore Entity
A flip means setting up a holding company in Delaware or Singapore above your existing home-country entity, then moving your current shareholders' stakes into that new holding company, effectively changing your company's nationality. Because most US VCs will not invest in anything other than a Delaware C-Corp structure, this restructuring is effectively a precondition for raising serious capital from US investors.
- Structure — the Delaware or Singapore holding company owns your home-country entity as a subsidiary
- Why — the standard investable entity for US VCs is a Delaware C-Corp
- Process — a share exchange among all existing shareholders, valuation, tax analysis, and legal review in both jurisdictions
- Cost and timeline — substantial legal and tax fees, and a process that takes several months
#Why a Flip Is Essentially Irreversible
The biggest risk of a flip is how hard it is to reverse. Once you have restructured under a US holding company, reversing it back to a home-country parent runs into practical roadblocks: getting every shareholder to agree again, tax exposure, and valuation disputes. If the overseas raise fails, the structure stays in place regardless.
| Stage | Reversibility | Main Obstacles |
|---|---|---|
| Before the flip | Fully reversible | None |
| Right after the flip | Very low | Re-consent from every shareholder, tax re-settlement |
| After overseas capital comes in | Practically impossible | Requires consent from foreign investors, wind-down burden |
| After the overseas raise fails | Close to impossible | The structure remains, the path home is blocked |
#Case Study — Starting as a US Entity and Getting Shut Out on Both Sides
One startup targeted the US market from day one and incorporated directly in Delaware. It tried to raise from US investors but failed, lacking the network and track record to close a round. At that point, it tried to move back home, but the reverse flip proved difficult, and the US entity structure also restricted its eligibility for Korean investment and government support programs. Unable to raise capital on either side, the company shut down.
- Start — targets the US market, incorporates directly in Delaware
- Overseas raise — fails due to a lack of network and track record
- Tries to move back — the reverse flip stalls, the structure stays in place
- Constraints back home — the foreign entity structure restricts eligibility for domestic investment and support programs
- Outcome — locked out of funding on both sides, the company shuts down
#Constraints on Domestic Government Support and Investment
Most Korean government support programs and policy funding require a Korea-incorporated entity headquartered domestically. Under a foreign holding-company structure, eligibility for many of these programs, including the Pre-Startup Package, the Early Startup Package, TIPS (the Tech Incubator Program for Startups), and various policy funds, becomes restricted or puts you at a disadvantage in review. Korean VCs also tend to take a more conservative view of companies with a foreign structure, given the added complexity of managing and exiting the investment.
| Funding Source | Korean Entity | Flipped (Foreign) Structure |
|---|---|---|
| Pre-Startup / Early Startup Package | Eligible to apply | Eligibility may be restricted |
| TIPS | Can be matched with an operating company | Structure gets extra scrutiny, constraints arise |
| Policy funding / R&D grants | Meets the domestic-headquarters requirement | Frequently fails to meet the requirement |
| Korean VCs | Standard process | Follow-on and exit complexity, more conservative |
#Timing and Approach for an Overseas Raise — If You Do It Anyway
If overseas capital is genuinely necessary for your business, do not attempt it blindly, design your approach instead. US fundraising has distinct busy and quiet seasons, and warm introductions succeed at a dramatically higher rate than cold outreach. To see a meaningful result at the Series A level, you need to meet a substantial number of investors.
- Timing — plan around the busy first half of the year and the slow year-end stretch
- Approach — avoid cold outreach, prioritize introductions through portfolio companies and the broader ecosystem
- Volume — plan on contacting 30 to 40 or more investors for a Series A
- Compression — run meetings in parallel so the process moves from first meeting to term sheet within a few weeks
- Support — bring on a team member or advisor fluent in English and the local legal system
#Self-Check — Before You Start a Flip
- Is overseas capital a precondition for your company's survival, or just one option among several?
- Are you making this decision on the assumption that a flip is irreversible?
- Have you added up the total domestic funding you would be giving up by flipping?
- Do you have a 12-month survival scenario if the overseas raise fails?
- Do you have a plan to contact 30 to 40 investors for Series A, along with warm introduction paths?
- Does your team have support fluent in English and the local legal system?
Check Before You Commit to a Flip
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