5 ms·

My brother and I were talking last night. We talked about mechanics, operations, for a VC fundable startup: Delaware C vs LLC IP assignment 83b election

My brother and I were talking last night. We talked about mechanics, operations, for a VC fundable startup: Delaware C vs LLC IP assignment 83b election Xero Opening a Silicon Valley Bank account Capital One credit card vs SVB I don’t understand why YC or freaking Haas never walks people through startup best practices, especially in an ‘Essential’ guide.

adpirz 9y ago
Second this. Can anyone reference a guide that works through the logistics of actually starting up?
- jacquesm 9y ago
  I've written this, years ago: https://jacquesmattheij.com/three-roads-to-the-top-of-the-mountain https://jacquesmattheij.com/three-roads-to-the-top-of-the-mo... And just about forever I've had a kind of owners manual in draft for bootstrapping a startup but I lack the time to complete it, way too much on the go :(. That's a nice indication of how much time and effort go into bootstrapping a company.
- wpennington 9y ago
  As phonon mentioned, Clerky is a service that can help with incorporation. Another service that is more comprehensive would be Stripe Atlas, which helps with everything from incorporation to setting up a SVB bank account to helping with tax issues and AWS credits. You also get access to the Atlas Forum and network of founders and advisors. https://stripe.com/atlas https://stripe.com/atlas If you're not into the service, they still have a nice guide on the process here - https://stripe.com/atlas/guide https://stripe.com/atlas/guide EDIT/UPDATE: Worth mentioning that Clerky offers certain legal services beyond incorporation (e.g., hiring/on-boarding and fundraising). Didn't mean to imply that incorporation is their sole product, but rather was speaking w.r.t. the topic of basic startup mechanics mentioned by the parent. https://www.clerky.com/ https://www.clerky.com/
  - jjeaff 9y ago
    I highly recommend services like this. We were pressured to work with a high powered SF law firm at the accelerator I was in. It was a total waste of a huge amount of money. ($800 an hour) They added very little value. On more than one occasion I had to request corrections after the "final" documents were out for signature. Usually having to remove data that was obviously left over from the last company they used the word doc template on. You can probably fill out templates with a service for a lot less than $800 an hour. And I don't believe for a minute that it took 5 hours of $800 an hour labor to fill out those templates not do I even believe the actual $800 an hour guy did more than quickly glance at the first page of the doc. And while I'm ranting, what a stupid and completely broken system legal documents are. They would email us 500 pages of documents and then we would print the last page that was nothing but signatures. Scan it, and send it back where it is then appended to the document they emailed us. OR any freaking document they want.
40acres 9y ago
On the opposite spectrum I was surprised that there wasn't any advice regarding ideation.
phonon 9y ago
https://www.clerky.com/ https://www.clerky.com/ walks through the legal aspects.
- mwseibel 9y ago
  Ditto on Clerky
enraged_camel 9y ago
Because those are logistical details, not essentials. As a founder your primary concern should be developing a solid product and having a good product-market fit and getting paying customers. The things on your list don't become important until later.
geoff 9y ago
YC's Kirsty Nathoo gave a great summary of startup mechanics here: https://www.startupschool.org/previous https://www.startupschool.org/previous
- kirsty 9y ago
  Thanks Geoff. I'm happy to answer questions on this topic. However some things are company and situation specific so can't be generalized. Also IANAL!
  - CalChris 9y ago
    Please, please beat 83b into every founder’s head and make sure they’ve internalized it so they get this boring form right for their employees. You’ve got 30 days or you’re paying income rather than capital gains. If WSGR incorporates the startup they will get this right for the founders. Sign this, sign this, this and this. But will the founders get this right for their employees?
    - kirsty 9y ago
      Agreed that 83b elections are crucial - there is very little a company can do if the form does not get filed within the 30 day window. The consequences of not filing the election can be significant for both the company and the employee. Clerky has the 83b election form (where necessary) as part of their Hiring package so that when the employee is allocated equity and signs the documents, it is automatically completed. However it is up to the employee to mail it in since it has to be sent via mail and can't be sent electronically. The company should make sure they are chasing the employee to do this and to get a copy of the election for the company's records.
    - nostrademons 9y ago
      Clerky beats 83(b) into the heads of founders who use its service. It's included in the package, with pre-filled forms and detailed instructions for where to mail them, and it sends you nag mail every week until you've uploaded the completed IRS form. It works for employees, too, but they don't get the nag-mail. The folks who I think really need to teach their employees about 83(b)s are fast-growing big companies. I didn't know about them when I joined Google, for example, and learned about it too late to take advantage of it. That mistake cost me literally hundreds of thousands of dollars.
manigandham 9y ago
You can shortcut all of that with https://stripe.com/atlas https://stripe.com/atlas Also why SVB? All of the major banks would be a better choice. There's no advantage to SVB unless you need some obscure venture-debt deal.
simonw 9y ago
One of the benefits of being accepted to YC is that their team make sure you get all of this stuff right.

adpirz 9y ago

Second this. Can anyone reference a guide that works through the logistics of actually starting up?

jacquesm 9y ago
I've written this, years ago: https://jacquesmattheij.com/three-roads-to-the-top-of-the-mountain https://jacquesmattheij.com/three-roads-to-the-top-of-the-mo... And just about forever I've had a kind of owners manual in draft for bootstrapping a startup but I lack the time to complete it, way too much on the go :(. That's a nice indication of how much time and effort go into bootstrapping a company.
wpennington 9y ago
As phonon mentioned, Clerky is a service that can help with incorporation. Another service that is more comprehensive would be Stripe Atlas, which helps with everything from incorporation to setting up a SVB bank account to helping with tax issues and AWS credits. You also get access to the Atlas Forum and network of founders and advisors. https://stripe.com/atlas https://stripe.com/atlas If you're not into the service, they still have a nice guide on the process here - https://stripe.com/atlas/guide https://stripe.com/atlas/guide EDIT/UPDATE: Worth mentioning that Clerky offers certain legal services beyond incorporation (e.g., hiring/on-boarding and fundraising). Didn't mean to imply that incorporation is their sole product, but rather was speaking w.r.t. the topic of basic startup mechanics mentioned by the parent. https://www.clerky.com/ https://www.clerky.com/
- jjeaff 9y ago
  I highly recommend services like this. We were pressured to work with a high powered SF law firm at the accelerator I was in. It was a total waste of a huge amount of money. ($800 an hour) They added very little value. On more than one occasion I had to request corrections after the "final" documents were out for signature. Usually having to remove data that was obviously left over from the last company they used the word doc template on. You can probably fill out templates with a service for a lot less than $800 an hour. And I don't believe for a minute that it took 5 hours of $800 an hour labor to fill out those templates not do I even believe the actual $800 an hour guy did more than quickly glance at the first page of the doc. And while I'm ranting, what a stupid and completely broken system legal documents are. They would email us 500 pages of documents and then we would print the last page that was nothing but signatures. Scan it, and send it back where it is then appended to the document they emailed us. OR any freaking document they want.

40acres 9y ago

On the opposite spectrum I was surprised that there wasn't any advice regarding ideation.

phonon 9y ago

https://www.clerky.com/ https://www.clerky.com/ walks through the legal aspects.

mwseibel 9y ago
Ditto on Clerky

enraged_camel 9y ago

Because those are logistical details, not essentials. As a founder your primary concern should be developing a solid product and having a good product-market fit and getting paying customers. The things on your list don't become important until later.

geoff 9y ago

YC's Kirsty Nathoo gave a great summary of startup mechanics here: https://www.startupschool.org/previous https://www.startupschool.org/previous

kirsty 9y ago
Thanks Geoff. I'm happy to answer questions on this topic. However some things are company and situation specific so can't be generalized. Also IANAL!
- CalChris 9y ago
  Please, please beat 83b into every founder’s head and make sure they’ve internalized it so they get this boring form right for their employees. You’ve got 30 days or you’re paying income rather than capital gains. If WSGR incorporates the startup they will get this right for the founders. Sign this, sign this, this and this. But will the founders get this right for their employees?
  - kirsty 9y ago
    Agreed that 83b elections are crucial - there is very little a company can do if the form does not get filed within the 30 day window. The consequences of not filing the election can be significant for both the company and the employee. Clerky has the 83b election form (where necessary) as part of their Hiring package so that when the employee is allocated equity and signs the documents, it is automatically completed. However it is up to the employee to mail it in since it has to be sent via mail and can't be sent electronically. The company should make sure they are chasing the employee to do this and to get a copy of the election for the company's records.
  - nostrademons 9y ago
    Clerky beats 83(b) into the heads of founders who use its service. It's included in the package, with pre-filled forms and detailed instructions for where to mail them, and it sends you nag mail every week until you've uploaded the completed IRS form. It works for employees, too, but they don't get the nag-mail. The folks who I think really need to teach their employees about 83(b)s are fast-growing big companies. I didn't know about them when I joined Google, for example, and learned about it too late to take advantage of it. That mistake cost me literally hundreds of thousands of dollars.

manigandham 9y ago

You can shortcut all of that with https://stripe.com/atlas https://stripe.com/atlas Also why SVB? All of the major banks would be a better choice. There's no advantage to SVB unless you need some obscure venture-debt deal.

simonw 9y ago

One of the benefits of being accepted to YC is that their team make sure you get all of this stuff right.