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One lesson YC taught founders back in 2012: innovate within your product. Don’t innovate with things like HR, legal, corporate structures, etc. Focus your inno
by cj 2y ago
One lesson YC taught founders back in 2012: innovate within your product. Don’t innovate with things like HR, legal, corporate structures, etc. Focus your innovative energy where it matters: your product.
Startups don’t fail because they chose to not innovate when setting up their corporate structure. They fail when they can’t build a product worth money to other people.
Having an innovative or non-standard corporate structure (basically anything other than Delaware c-corp) will cause headaches and even once you’re successful, will make a lot of things more difficult. Harder (more expensive) to find lawyers, harder (more expensive) to find accountants, and it will be an issue if you are getting acquired or raising money.
I don’t disagree there might be viable alternatives. But most founders shouldn’t be trailblazing a new path with an innovative corporate set up. Just do what everyone else does and put your focus where it matters.
I’m curious why anyone wouldn’t default to Delaware c-corp for the typical startup raising capital. What’s the gain?