CLEVELAND —"It isn't a choice. It's a requirement."

So said Steve Burrill, founder and partner of Burrill & Company (San Francisco), on the necessity of a company thinking globally in today's world.

"The tiniest company we create here in Cleveland," by necessity, must be a globalized company, he said, and he emphasized that operating on a global scale is "very different" than in the U.S.

"We want to think that biotech and med-tech companies have the same value" all over the world, he said. But, he asserted: "They don't."

Burrill and three other venture capital panelists who have been active outside the U.S. were at the inaugural Global Healthcare Investing Conference held here on the Cleveland Clinic Campus. Each panelist was to present a non-U.S. company from their portfolios and discuss how the opportunity was discovered, vetted, operated and financed.

But mostly, panelists offered advice based on their own experience in attempting to do deals in non-U.S. markets.

Norman Chen, partner, healthcare, Fidelity Asia Ventures Limited , advised those in the audience that "Asia is not one market. Every market [in the region] is very different and you need to get to know them."

Frank Kung, managing partner, Vivo Ventures , said that Asia has a booming economy but that it is still early in the game for those who are risk-averse in terms of investing there.

Kung said that he has spent eight or nine years "scouting around Asia" for local companies in which to invest.

The problem for U.S. companies hoping to do business in international markets is that most people perform due diligence on non-U.S. companies with a "U.S.-centric point of view," Burrill said. He added also that, given the different regulatory bodies and customs, doing business abroad is "not for the faint of heart."

Kung said that to invest with a "global vision," a venture capitalist must have "local expertise." Addressing how due diligence is done overseas, Kung characterized it as "a very critical issue." He added that his firm focuses on investing in companies that are "relatively easy" deals in order to limit the scope of the due diligence required.

"I would suggest due diligence on the way in and due diligence on the way out," he said.

However, Anthony Sun, a principal at Aisling Capital , said he doesn't see due diligence as being really any different abroad than here in the U.S., with the exception of accounting issues and how that affects limited partners.

Burrill echoed the sentiment that VC groups need someone in a particular country or city to help them understand the local economy.

"Most Americans are incredibly parochial," Burrill said. "They think people everywhere do things the way we do here."

Governments in other countries sometimes "play major multiple roles" in some instances, Burrill said, from being the enforcer of regulations to a funder to being a reimburser, in addition to being the agency that decides whether a company gets something as basic as building permits.

"You have to deal with national governments, regional and local governments," he said.

And the difficulties extend to finding out about the management of a company in non-U.S. companies, Chen said, due to different cultures and different ethics, in some instances. For example, Kung advised approaching this area with "intrinsic respect."

And whereas in the U.S companies may not think twice about changing the CEO of a company, Kung said, "Don't even think about changing CEOs in a company in Asia," because there are often family ties within companies, and the CEO is seen as the one who has made the company successful.

As for intellectual property questions abroad, Sun gave the example of Viagra in China, where it was claimed that Pfizer had failed to secure the proper patents for the erectile dysfunction drug, thereby allowing companies there to make generic versions of the drug.

"My advice is, get the best counsel you can … and whatever deep dive you take, dive deeper," Sun said.

Burrill echoed the sentiment that patents "don't mean much" in China, although IP can "generally be enforced in India." However, in Russia, he said it is almost impossible to find out if IP exists, and "enforcement in non-existent."

Under the heading of operational issues and challenges for companies operating abroad, Sun said that pay structures are a big issue.

"Ex-[patriates] come in with their PhDs from MIT and MDs from Harvard," and often get pay and perks that don't compare to the nationals working in a non-U.S. company.

"These are nitty-gritty issues, but they can actually bring a company down," Sun said.

But the real question to come from the discussion, according to Burrill, is not how to invest in a foreign company, but "how do we operate globally."

For example, global deals can take longer, and Burrill's firm has completed seven in Europe and none in India and none in Asia, but where the latter is concerned, it's not from a lack of effort.

But while it may be "significantly more difficult," such deals, he concluded, "may be more rewarding."