The unfortunate reality is that there are very few VCs who will invest anywhere in the world.

As a quick plug for ourselves, Hustle Fund is an exception to this rule. Other funds like Everywhere VC and Precursor also invest globally. But the bulk of VCs care a lot about where a founder is based.

Here's what they care about.

1. Where are you incorporated?

If your business is incorporated in a jurisdiction that is challenging for regulatory and/or tax reasons, a VC will not invest. They just won't. Some founders in this position offer to re-incorporate when the VC invests, but that almost never makes a difference.

Most U.S.-based VCs want you to be incorporated as a Delaware C-Corp, even if you aren't based in the U.S.

2. What happens when you take off?

Many VCs believe you can start a business from anywhere in the world. That is... when it's just you and your co-founder.

But what happens when you company takes off? How will you scale talent? Will you hire locally? Is there talent based where you live? Has anyone in your town ever built a big business before?

See, VCs want to back teams with the best talent in the world. If your team has no experience building a big business, how will they know what good looks like? If you're not planning to source talent locally, will you move? Where will you move to?

3. Does your location indicate a lack of ambition?

Like it or not, location is a proxy for ambition. While you may be keeping your costs down by living outside of a big city, your location could have larger implications for your company.

It's certainly possible to build a big business outside of a big city. But frankly, most big businesses are in big cities. This is because it's easier to scale talent in dense areas.

So if you're in a small town, VCs may think you don't have a plan to scale your company.

Remember – VCs make money when they back big businesses. So if they're going to invest in you, they need to believe you will create a big business.