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Runway aside, you should have already have a direction and an executed prototype already moving you toward that direction before even thinking about corporation

Runway aside, you should have already have a direction and an executed prototype already moving you toward that direction before even thinking about corporations. I don't know where people get this idea that companies come first before good products. Companies are the establishment of two things: Good People and astonishingly great Core Value. If you're lucky enough to get those two things into the same room then chances are you will grow to a point where creating a corporate entity is a necessity. Only then can we start to talk about runway.

dotBen 16y ago
But to build a prototype you probably are going to have co-founders who are going to build said prototype with you. Someone(s) is going to have to throw in a little seed money if only to pay for hosting of the prototype. And between you and your co-founders you would be ill-advised to begin building that astonishing core value and creating out-of-pocket expenses without some kind of legal agreement in place of ownership and ownership %ages. That's usually what a corporate entity and cap table are for. I've seen former best friends and college roommates sue the fuck out of each other because they didn't do this back when they began building said prototype.
- kristopher 16y ago
  > And between you and your co-founders you would be ill-advised to begin building that astonishing core value and creating out-of-pocket expenses without some kind of legal agreement in place of ownership and ownership %ages. If you have grown to the point where co-founders are bickering about cap-tables, then hopefully at that point you have Good People and solid Core Value -- time to incorporate. The problem with most 'entrepreneurs' is that they only have an idea (not even direction!) and they are already working on how they should incorporate and setup shop. Business and money for that matter is only the transient result of core value -- something that we should all be focusing on delivering.
  - nika 16y ago
    In my experience, you're both right. You need the agreements so that the business doesn't get killed by bickering between co-founders, and you need to not spend a whole lot of time on "corporate matters" when you should be building the product. The advice you hear from "VCs" very often is that the first thing you should do is not just get incorporated, but get a lawyer, an accountant, etc. All of which is premature.

dotBen 16y ago

But to build a prototype you probably are going to have co-founders who are going to build said prototype with you. Someone(s) is going to have to throw in a little seed money if only to pay for hosting of the prototype. And between you and your co-founders you would be ill-advised to begin building that astonishing core value and creating out-of-pocket expenses without some kind of legal agreement in place of ownership and ownership %ages. That's usually what a corporate entity and cap table are for. I've seen former best friends and college roommates sue the fuck out of each other because they didn't do this back when they began building said prototype.

kristopher 16y ago
> And between you and your co-founders you would be ill-advised to begin building that astonishing core value and creating out-of-pocket expenses without some kind of legal agreement in place of ownership and ownership %ages. If you have grown to the point where co-founders are bickering about cap-tables, then hopefully at that point you have Good People and solid Core Value -- time to incorporate. The problem with most 'entrepreneurs' is that they only have an idea (not even direction!) and they are already working on how they should incorporate and setup shop. Business and money for that matter is only the transient result of core value -- something that we should all be focusing on delivering.
- nika 16y ago
  In my experience, you're both right. You need the agreements so that the business doesn't get killed by bickering between co-founders, and you need to not spend a whole lot of time on "corporate matters" when you should be building the product. The advice you hear from "VCs" very often is that the first thing you should do is not just get incorporated, but get a lawyer, an accountant, etc. All of which is premature.