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To be clear Sachin is not talking about setting up an LLC or an S Corp. He's talking about setting up a C Corp, probably in Delaware, for a start-up where your
by brm 17y ago
To be clear Sachin is not talking about setting up an LLC or an S Corp. He's talking about setting up a C Corp, probably in Delaware, for a start-up where your immediate intention is to go out and raise funding.
Service businesses don't apply and neither do bootstrapped web apps. If you're doing one of those go ahead and form your legalzoom llc or s-corp and get the worry out of your mind.
There's a reason YC and others want you to wait and its because untangling the mess that self-incorporation can create is a needless and sometimes expensive time sink when preparing you for investors who are used to dealing with this specific case.
I'm not sure Sachin's part about needing a good lawyer for introductions is important but the part about doing incorporation for a C Corp raising money correctly is a proper point.
- jsiarto 17y agoBut a $40,000 mistake? I can't wrap my head around that number. With a little forethought and a few days research you could have been ready with those kinds of questions before meeting with a lawyer or an accountant. Especially when your intention was to seek funding.
- brm 17y agoNo I doubt its normally a 40k mistake but he didn't elaborate... he said it cost the business 40k, he didn't say they paid out 40k. Both Sachin and his detractors are speaking in overly broad terms here. Sachin's getting hammered though because he's taking one case and extrapolating general advice from it. Some of the points against his argument are fair and some arent. The confusion here might also have something to do with the blurred semantic differences that are occurring these days between traditional business and start-up