There were 1,583 press releases posted in the last 24 hours and 413,480 in the last 365 days.

As Market Variables Are Unknown, Risk Mitigation Gets More Important Than Ever for US Companies

Better Risk Management Means Better Foreign Businesses: Attorney Özçelik

ISTANBUL, Turkey, June 06, 2023 (GLOBE NEWSWIRE) -- In recent years, US-based investment firms, especially those with a global focus, recognize the potential of technology companies experiencing high growth outside the US. They are aware that innovation and market potential are not limited to a specific geographic region. As a result, many funds actively seek investment opportunities in promising overseas markets. In the meantime, the risks in the market are reaching their peak. As noted in the Statista report, business interruption, macroeconomic developments, and cyber incidents are among the leading risks for US companies.

In line with these facts, Usul Ventures partner Attorney Kaan Özçelik indicates that companies with a solid business model and effective risk mitigation strategies are likely to attract more interest from US investors. Therefore some US-based fund institutions form partnerships with local venture capital firms in overseas markets. And as a leading law & consulting firm based in Istanbul, Usul Hukuk allows these companies to reduce risks associated with investing in unfamiliar regions by leveraging the expertise, networks, and market understanding of local partners.

“Risk Evaluation is a Top Consideration”

Investing in developing markets where technology is rapidly evolving, such as Turkey, India, China, Southeast Asia, and Latin America have garnered significant interest from US investors. Specialized in capital market law, Attorney Kaan Özçelik says the large populations, growing middle classes, and increasing technology adoption in these countries are the main attractions for US-based firms. Consequently, many firms actively seek companies with exceptional abilities, innovative ideas, and disruptive technologies regardless of their geographical location. But to him, the most important thing here to look out for is the risk management system because while FDI rates in the US get higher, the importance of applying a risk-free system is getting bigger. And a Gitnux Risk Management Report, indicating that the risk management software market is estimated to reach USD 23.57 billion by 2028, supports this idea.

In his words, “US investment firms generally have a broad network and experience in the technology and venture capital sectors. They can provide valuable mentorship, guidance, and connections to foreign companies. This expertise and network can be highly appealing to technology-based companies emerging abroad as it can accelerate their growth and provide access to the US market. But these companies need to establish their corporate structures and be cautious about funding during the investment process.”

A Top-Notch Consulting Service Could Make Perfect Balance Between the Investors and the New Markets

Attorney Kaan Özçelik, a partner at Usul Ventures, a firm involved in consulting activities and having relationships with US-based fund institutions, mentioned that companies need to establish their corporate structures in the investment process and be able to determine their short-term, medium-term, and long-term goals rationally. He continued as follows:

"Startups and scale-ups that receive investments in exchange for shares can face various problems or challenges. When new investors come on board, they often acquire a percentage of the company's shares. This could lead to dilution of existing shareholders' ownership and control. At this point, it is necessary to establish the allocation of shares and management criteria. Ultimately, the investor profile I mentioned generally enters the company to evaluate liquidity, so they don’t seek extra control beyond protecting the fund. Assessing the valuation of companies may not always be easy, and disagreements regarding valuation can arise between the company and the investors. So, it is necessary to work with realistic and trustworthy financial advisors, explaining all the factors related to valuation.”

Indicating that new investors have specific expectations regarding the company's growth strategy and companies need to be able to construct their future projections in line with these expectations, Özçelik emphasized the importance of striking a balance in between:

“The success of the investment depends on how well the main organization can continue based on its foundations. Managing relationships with multiple investors can become complex and that’s exactly when Usul Ventures gets involved to establish clear lines of communication with the investors and provide regular updates. Potential issues are easily solved by having a transparent legal service. The required support getting from Usul Ventures is important to define these bases at the beginning of the investment process, design internal mechanisms of the company in line with international corporate governance principles, and always implement a governance strategy that is transparent, open to audits, and minimizes uncertainties. It fully supports the companies, entering the investment process with its legal experts and financial team, helping them to prepare for the next level.”

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/93f696a8-be30-4366-b424-12946e1f2bc9


Media Contact
Kadir ÖZPINAR
Onlipr
info@onlipr.com
Kaan Ozcelik Usul Ventures

Kaan Ozcelik Usul Ventures