The differences in valence band structure and work function between heteroepitaxial nanocrystals and the surrounding substrate were measured with a spectroscopic photoemission and low energy electron microscope which allows laterally resolved photoemission spectroscopy. The nanocrystals were obtained by depositing nominally 2 and 4 monolayers (ML) of InAs on a Se-terminated GaAs(001) surface. The samples showed differences in the valence band edge energy and work function both between nanocrystals and substrate as well as between 2 and 4 ML. We suggest that Se termination of the nanocrystals is the reason for these differences.