4 ms·

I read both this article and his previous of where he created a company with 10,000,000 shares initially. This is why it cost him so much to dissolve the compan

I read both this article and his previous of where he created a company with 10,000,000 shares initially. This is why it cost him so much to dissolve the company. If he knew what he was doing he would have created far less shares, like 1500 total.

chamza 16y ago
I've learned that 10,000,000 shares is fine if you have a low par-value per stock. I believe this many stocks are especially good if you're looking for outside investors/board members. But actually, don't listen to me, I'm the one whose in this ridiculous mess.
- rosenjon 16y ago
  How stupid this was is dependent on the specifics, which we don't really have. Were you on the brink of raising a round of capital? Or did you just incorporate in anticipation of raising a round later? A C-corporation in Delaware is considered the best entity for raising outside investment. The State of Delaware knows this, and charges hefty fees for maintaining a C-Corporation, and apparently for dissolving one. So it makes very little sense to incorporate in Delaware unless you will be raising an outside round of capital, because the costs of maintaining the C-Corporation itself are very high for a start-up with no money. Recognize that a "do-it-yourself attitude" is awesome for developing start-ups. It is perhaps one of the worst attitudes to take in terms of corporate entity formation and maintenance. Documents on file with a law firm with appropriate date and timestamps are virtually bulletproof in court. This is one of the many reasons law firms exist. Documents pulled out of your filing cabinet, to which only you have been privy until the time they end up in court, are a bad, bad idea. Bootstrapping your legal documents or anything else having to do with your corporate entity is a flat out terrible idea, unless you basically do this for a living (in some cases, there are startups who create LLC's daily, in which case you presumably know all of this already).

chamza 16y ago

I've learned that 10,000,000 shares is fine if you have a low par-value per stock. I believe this many stocks are especially good if you're looking for outside investors/board members. But actually, don't listen to me, I'm the one whose in this ridiculous mess.

rosenjon 16y ago
How stupid this was is dependent on the specifics, which we don't really have. Were you on the brink of raising a round of capital? Or did you just incorporate in anticipation of raising a round later? A C-corporation in Delaware is considered the best entity for raising outside investment. The State of Delaware knows this, and charges hefty fees for maintaining a C-Corporation, and apparently for dissolving one. So it makes very little sense to incorporate in Delaware unless you will be raising an outside round of capital, because the costs of maintaining the C-Corporation itself are very high for a start-up with no money. Recognize that a "do-it-yourself attitude" is awesome for developing start-ups. It is perhaps one of the worst attitudes to take in terms of corporate entity formation and maintenance. Documents on file with a law firm with appropriate date and timestamps are virtually bulletproof in court. This is one of the many reasons law firms exist. Documents pulled out of your filing cabinet, to which only you have been privy until the time they end up in court, are a bad, bad idea. Bootstrapping your legal documents or anything else having to do with your corporate entity is a flat out terrible idea, unless you basically do this for a living (in some cases, there are startups who create LLC's daily, in which case you presumably know all of this already).