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They found an “GmbH, SARL, OOD, DOO, LTDa, A, BVO, Sp. Zoo, SRO, TAA or OOO” and wonder why international VCs don’t bother If people want to invest in your com

They found an “GmbH, SARL, OOD, DOO, LTDa, A, BVO, Sp. Zoo, SRO, TAA or OOO” and wonder why international VCs don’t bother If people want to invest in your company, its legal form is of little importance. Changing the legal structure for a small company isn't a problem and any serious VC can even help you with that. I never heard of someone not investing in a company because it didn't have the proper legal form.

jonnathanson 15y ago
I think the broader point (I think?) is that first-time founders often run off to consult with a lawyer right out of the gate. As a result, they'll spend thousands of dollars, and lots of time, protecting themselves from imaginary legal threats -- time and dollars that should have been allocated to product development at this stage in the game. If, at the moment, your startup consists of the proverbial two guys in a garage, it's highly unlikely that you need to spend $10,000+ on a lawyer's counsel and advice. Build your product first. You're not even on the radar yet, so it's not as if Google or Facebook even know who you are, let alone want to steal your idea. And chances are, someone's doing your idea anyhow. Chances are, ten people are doing your idea right now. Your best defense isn't legal action; it's product traction. There's a time and a place for lawyers, but right up front is usually not it. Unless you've got some sort of truly innovative, groundbreaking technological innovation on your hands.
- mgkimsal 15y ago
  "There's a time and a place for lawyers, but right up front is usually not it. Unless you've got some sort of truly innovative, groundbreaking technological innovation on your hands." The bigger problem I see is that many people actually think they've got something innovative, unique, groundbreaking or patentable. A "social network for dog lovers" is probably not patentable, certainly not that unique or groundbreaking, and none of it matters without execution and a userbase (ideally of paying customers). But I run in to many people who fret way too much over "how can I protect my (one and only) idea?!!" We need have a "Founder's Daily Prayer": "God grant me the wisdom to execute on the mundane aspects of my business, legal protection for the truly innovative and patentable aspects of my business, and the wisdom to discern between the two".
andreasklinger 15y ago
You can start of with a GmbH but it will be just a little extra stone in your seedphase you should have in your way. Investors will talk to you - but how much effort would you put in if your goal is to invest let's say 50k-100k as a seedround. You are rather worried about the upcoming series of investment therefore you push into a LTD or similar entities. If you invest only 50-100k how much will you really bother holding hands while the founders change their entity Btw… Changing a legal entity is a very cost intense procedure. I might be wrong but i experienced exactly that first hand.
- shin_lao 15y ago
  It changes from country to country. In France changing from SARL (not VC friendly) to SAS (VC friendly) hardly exceeds 10 000 €. For a business angel, you might even stick to SARL which has got some advantages regarding partner's compensation (less taxes, more flexibility).

jonnathanson 15y ago

I think the broader point (I think?) is that first-time founders often run off to consult with a lawyer right out of the gate. As a result, they'll spend thousands of dollars, and lots of time, protecting themselves from imaginary legal threats -- time and dollars that should have been allocated to product development at this stage in the game. If, at the moment, your startup consists of the proverbial two guys in a garage, it's highly unlikely that you need to spend $10,000+ on a lawyer's counsel and advice. Build your product first. You're not even on the radar yet, so it's not as if Google or Facebook even know who you are, let alone want to steal your idea. And chances are, someone's doing your idea anyhow. Chances are, ten people are doing your idea right now. Your best defense isn't legal action; it's product traction. There's a time and a place for lawyers, but right up front is usually not it. Unless you've got some sort of truly innovative, groundbreaking technological innovation on your hands.

mgkimsal 15y ago
"There's a time and a place for lawyers, but right up front is usually not it. Unless you've got some sort of truly innovative, groundbreaking technological innovation on your hands." The bigger problem I see is that many people actually think they've got something innovative, unique, groundbreaking or patentable. A "social network for dog lovers" is probably not patentable, certainly not that unique or groundbreaking, and none of it matters without execution and a userbase (ideally of paying customers). But I run in to many people who fret way too much over "how can I protect my (one and only) idea?!!" We need have a "Founder's Daily Prayer": "God grant me the wisdom to execute on the mundane aspects of my business, legal protection for the truly innovative and patentable aspects of my business, and the wisdom to discern between the two".

andreasklinger 15y ago

You can start of with a GmbH but it will be just a little extra stone in your seedphase you should have in your way. Investors will talk to you - but how much effort would you put in if your goal is to invest let's say 50k-100k as a seedround. You are rather worried about the upcoming series of investment therefore you push into a LTD or similar entities. If you invest only 50-100k how much will you really bother holding hands while the founders change their entity Btw… Changing a legal entity is a very cost intense procedure. I might be wrong but i experienced exactly that first hand.

shin_lao 15y ago
It changes from country to country. In France changing from SARL (not VC friendly) to SAS (VC friendly) hardly exceeds 10 000 €. For a business angel, you might even stick to SARL which has got some advantages regarding partner's compensation (less taxes, more flexibility).