I am based in the US, but I would like to start an ISP in a different country.
Would it be reasonable to find investors in the US? Or do I have to find investors in the target country?
It's harder, but not impossible. We're a Canadian business and took in investment from US investors.
The more important question is whether the business is worth investing in. Build a solid business, and you should be able to find the investment.
International investment in someone else's business is a rare occurence because of a number of factors, such as:
Some investors outright refuse to deal with any of these problems, but the open-minded ones have at least one foreign investment already. You can make that one of your research criteria to make sure your requests for meetings don't fall on deaf ears. However, do keep in mind that it will take a lot of time to find such an investor.
It would probably be harder to gain investment, as even if you and the business are in the US, the operation is overseas. You need to account for political risks, currency fluctuations, tax regulations, etc, etc, all of which make it harder to justify the investment.
Mostly they shy away for a very simply reason - should the company become successful, the investor would want to take it away from the founder and throw him out, and it's going to be much harder to do to a foreign entity. The usual contractual tricks the investors use and that are fatal to the founder, they make use of the US laws, and these may not work in a different jurisdiction.
On the other hand, it is a safety measure - avoid investors from the same country when you register business. They may know tricks, they may have connections with authorities and courts. You better skip them and look for somebody on the other side of the fence.