Fundraising · Currency Exchange

Funding startup with investors from multiple currencies?

Libby Kennedy Chief Operating Officer - Selterre Corporation

December 6th, 2016

I am working with a Canadian startup.  Our initial seed round of funding is used to pay for web development services in India, paid in USD.  Our initial investors hold USD and would prefer to invest in same. 

Is there a standard way to recognize investment in a currency other than the main currency of the company?  When we begin operating our primary currency will be CAD. 

I believe that the shares will be provided in line with the current exchange rate of USD to CAD.  However, I wanted to float it with the community before I proceed. 

Thanks very much all, 

Libby 

Ian Shearer Executive Chairman at Parakeetplay

December 11th, 2016

Denise It's pretty simple. Set up your company in Euro. Try to get your investors to all agree to invest in Euro but its not a big deal if the US ones won't agree. In that case you just tell them to send you dollars at an agreed rate based on current Euro dollar spot. But of course you should also set up two bank accounts, a Euro one and a dollar one getting the dollar investors to send dollars to the dollar account and Euro to Euro account. Then work out your currency requirements going forward and if you have (say) excess dollars just convert them to Euro using an online forex company like currency fair. So much cheaper and easier than banks. I have done this a couple of times. It's just a question of careful financial management. It's not rocket science. Ian Sent from Samsung tablet

Yoash Dvir Sr. Project Manager at Lifion, by ADP

December 6th, 2016

Libby 
I am a corporate lawyer in Israel (living in NYC now) and dealt with this issues a lot of times. 
All investments in startups in Israel are made in USD even though our currency is NIS (New Israeli Shekels conversion rate $1= NIS3.87). 
Since USD is global and CAD and NIS are local, you should have your valuation and shares allocation in USD. You also accept the funds in USD in converting it to CAD is one of the investments costs that you can either bear by the company or in advance make sure the investors pay. Hope this answers your question. Yoash

Denise Dampierre Founder at Founder Institute

December 10th, 2016

Hello all,  

Would you have a similar strategy when the currencies are USD and Euro?  French law, tech dev in USD, grants in Euros and some expenses in Euros too, and potential investors in both USD & Euros.

Arthur Lipper Chairman of British Far East Holdings Ltd.

December 6th, 2016

You must fix the currency of investment and USD will be the most popular with investors.

Yoash Dvir Sr. Project Manager at Lifion, by ADP

December 6th, 2016

With pleasure! 
you can email me directly if you wish to further discuss yoashd@gmail.com 

Ian Shearer Executive Chairman at Parakeetplay

December 6th, 2016

Libby
I am based in Ireland. Obviously here we use the euro but a lot of our thinking (and even pricing) is often done in dollars although generally our shares would be in Euro.
Like Yoash I would strongly recommend you to think USD and do everything in that currency. Canadian dollar is just a local currency.

Ian Shearer Executive Chairman at Parakeetplay

December 6th, 2016

Like Yoash, also my pleasure. 
Managing a funding life cycle is not easy. 

Arthur Lipper Chairman of British Far East Holdings Ltd.

December 10th, 2016

You must use a single currency and the investor takes the currency risk, which in USD not great.

John OHanlon Owner of Banks Printers

December 6th, 2016

What about Bitcoin??

Bob Sharon Member and active supporter at Citizens' Climate Lobby

December 7th, 2016

Bitcoin Kind regards Bob Sharon Sent from my iPhone