What type of German company is best suited for U.S. investors?

The advantage of the German "GmbH" compared to the "UG" is the better validation of your company by customers and investors. The answer to your question depends on the type of investor you want. "High-risk" business angels don't mind investing in an UG. "Medium-risk" VC investors usually consider the GmbH as a pre-condition for future investments in Germany. It's liability (of at least 25.000 EUR) is already invested by the company members and indicates that the company is a (i.a. financially) reliable business partner with consolidated ideas.

In a nutshell: the higher the investor's risk, the higher his slice of the cake.

There are ways to bridge the gap between signing of the investment contract and changing the company's legal form. If you need a tailored advice for your specific situation, feel free to contact me.

If any form of public offering is contemplated now or later, you should consider also to opt for the AG (Aktiengesellschaft - public limited companies). The AG is intended as the appropriate form for entities owned by a larger number of shareholders. Most of our VC clients wouldn't invest in a UG. They would at least changing the form to a GmbH during the investment process.