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Although much of Philadelphia’s business culture will be familiar, much of its legal and
operational culture will not. The most significant of these issues can be collectively
categorized as “corporate formalities.” They include such questions as the kind of
company you decide to create in the United States; how you fund it; which state you
select as your company’s legal home; and all the decisions around the capitalization,
accounting and taxation of your U.S. enterprise. It is smart to attend to these issues
with the assistance of an experienced U.S. attorney, ideally one who understands
the business and legal environment in Israel. Formation issues that seem minor at
the outset can become enormous problems down the road. For example, improperly
classified stock option grants can present a company’s senior management team
with major tax problems in the future. American tax law is complex, especially for
international companies.
Similarly, it is essential for companies in a technology-related field to enlist the services
of an experienced American intellectual property attorney. American IP issues involve
much more than ensuring that patents are properly drafted and filed. They also entail
developing a strategic IP plan, which evaluates the patent portfolios of American
competitors, both actual and potential. In addition, a comprehensive IP strategy will
also address topics, such as employee noncompete agreements and trade secrets, as
well as the status of partnership and development contracts with outside partners.
Other issues frequently faced by inbound Israeli companies are less technical, but no
less important. For instance, the sales and business development environment in the
United States in general, and particularly in Pennsylvania, may be completely different
from that of Israel,which can present challenges. Israeli companies operating here have
a tendency to seek out, and thus limit themselves to, building relationships with other
Israelis. This can hurt you. The United States is one of the world’s biggest markets,
and although it can be more challenging, it is essential to build relationships with
everyone in the marketplace—Israeli or not. Attend every industry event. Read blogs,
newsletters and publications in your fields. While it may feel unnatural, consciously
striving to avoid limiting your network to other Israelis is an essential step in getting
traction as quickly and cost-effectively as possible.
At the same time, however, it is worthwhile to leverage the Philadelphia Jewish
community. Properly managed, this enormous, vibrant group can be an extraordinary
source of guidance, relationships and mentorship. The Delaware Valley has dozens of
organizations—not only religious, but also business, cultural, arts-related, culinary and
sports organizations—that can help. In particular, seek out mentors—including other
Israelis in your field—who have “been there, done that” and can provide guidance.
Finally, it is essential to avoid neglecting the personal and emotional challenges of
entering this new market. Israel is seven hours ahead of Philadelphia. You may be
working alone, or with a small team, largely isolated from the day-to-day decision-
making, brainstorming and support of your home office. Much of what is so familiar as
to be automatic in Israel, from renting space and negotiating a lease, to obtaining a cell
phone to hiring American employees—with all the attendant rules and regulations—
will be drastically different. Prepare for this, and calibrate your expectations.
American IP issues involve much more than ensuring that patents are properly
drafted and filed. They also entail developing a strategic IP plan,which evaluates
the patent portfolios of American competitors, both actual and potential.