When it comes to entering the U.S. market, most founders think it’s all about product, team, and the perfect pitch. But behind every successful deal lies a tough legal reality: one wrong move — and your investment or exit can be canceled by the government, even if all the documents are signed.
This material is based on a talk by an M&A and foreign investment partner of DLA Piper during our Silicon Valley Bootcamp. Below we break down the key changes in U.S. regulations every founder and investor must understand.
CFIUS: The Invisible Regulator of Your Deal
The first and main barrier for foreign investments in the U.S. is CFIUS (Committee on Foreign Investment in the United States) — a federal body that reviews deals for potential national security risks.
What’s under scrutiny:
- Software that could be used for military or dual purposes (including most AI systems).
- Infrastructure projects (satellites, telecom, payment systems).
- Land near military bases or critical facilities.
Who is at risk:
If you are a startup looking to raise capital from investors based in China, Hong Kong, Russia, North Korea, Cuba, or Venezuela — you must consult a CFIUS specialist before closing the deal.
“The real risk is that even after you close a deal, they can come back and say: ‘We reviewed your transaction and didn’t like it — unwind everything.’”
Passive investments, where the investor does not gain control (for example, a board seat or special rights), are usually safer. However, if your fund structure includes capital from “sensitive” jurisdictions, CFIUS scrutiny is almost guaranteed.
Market Trends. Capital Is There, but Exits Are Scarce
AI remains the main driver of investments — about 30% of all U.S. deals and 40% of all invested capital are now connected to artificial intelligence.
M&A volumes continue to grow, but mostly due to large players: total deal value rose from $2.8 trillion in 2023 to $3.1 trillion in 2024. However, this increase comes from size, not quantity — mega-deals over $1B dominate, while smaller startup acquisitions are declining.
High interest rates and inflated valuations from 2021 have created a mismatch between buyer and seller expectations. Public tech companies dropped 80–90% from their peaks, but many private startups still hope to exit at record prices.
Antitrust Regulation. The New Headache
If your deal exceeds $126.4 million (2024 threshold), you must file for antitrust clearance. The process has become much more complex, lengthy, and expensive.
What’s changed:
- Document preparation time increased from 5–10 days to 20–30 days.
- Additional workload now ranges from 60 to 120 hours.
- Filing fees can reach $2.3 million for large transactions, plus significant legal costs.
Submitting early in the negotiation process is now nearly impossible, adding more uncertainty and expense for both sides. Careful timing and preparation have become critical.
Outbound Investments. The U.S. Monitors Not Only Inflows but Outflows
A new trend is U.S. regulation of outbound investments — limiting where American capital and technology can go. The administration seeks to prevent U.S. money from supporting sectors tied to foreign military development, particularly in China.
Under scrutiny are AI and semiconductors. If your group includes American entities and you plan to invest in these sectors abroad, be prepared for upcoming restrictions. It’s still in the form of a memorandum, but the direction is clear.
Legal Literacy Is the New Competitive Advantage
In the past, founders focused on product and marketing. Today, successful fundraising or market entry in the U.S. requires deep understanding of the legal and regulatory landscape.
What every founder and investor should do:
- Vet your investors. Where is the money coming from? Any exposure to sensitive jurisdictions?
- Be realistic about valuation. Avoid inflated pricing if you’re planning an exit within 1–2 years.
Understanding U.S. legal frameworks has become as crucial as building a strong product — it’s the new foundation for sustainable growth.
Checklist: Questions Every Founder and Investor Should Ask Themselves
- Have you reviewed your investor structure for potential CFIUS risks?
- Do you understand which revenue or asset thresholds your deal falls under for antitrust review?
- Have you budgeted at least $1M for legal due diligence and regulatory filings (for a company valued around $100M)?
- Do you have a Plan B if the antitrust review process is delayed for 60+ days?
