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PG, if my co-founder and I are currently bootstrapping a company and starting to work with a law firm to go through all the formalities of incorporation, would

PG, if my co-founder and I are currently bootstrapping a company and starting to work with a law firm to go through all the formalities of incorporation, would you recommend holding off on that for a few months in case we are accepted into YC? It's not cheap (by far) to pay for that stuff out of pocket, and I imagine YC has a lot more experience guiding young companies through the formation process, so curious about your opinion. Thanks.

pplante 14y ago
in my experience, regardless of your application to YC it is a good idea to get things documented. not because you mistrust your cofounder, or anything of that sort. simply it puts everyones mind at ease for what they get out of it. not having documentation lingers in the back of your mind. just my 2 cents.
- callmevlad 14y ago
  Totally agree about getting everyone on the same page and putting things on paper. The main reason I asked, however, is cost. Some lawyers have squishy/unpredictable pricing when it comes to formation and advice, while the fixed "good" ones are not cheap (e.g. ~$5K). Others try to wave their hands around pricing and just use a "pay it later" approach, but we'd rather keep things simple. I was just wondering if it's safer to get YC help/guidance to make sure we don't get burned, in case we get in since the timing between now and the deadline is almost a rounding error.
thaumaturgy 14y ago
http://news.ycombinator.com/item?id=2246544 http://news.ycombinator.com/item?id=2246544: > Don't incorporate, though, if you can avoid it. It's easier to start with our paperwork than to transfer an existing LLC or S-Corp to a C-Corp. http://news.ycombinator.com/item?id=1778985 http://news.ycombinator.com/item?id=1778985: > It's not a deal-breaker unless it's botched. The right way to do it would be to use a convertible note written so that YC funding wouldn't trigger conversion. If you have a lawyer who can arrange that. But you'd have to incorporate, and you (and we) would then be stuck with however you did, so we'd hope you did it right. According to those and other previous comments from him, they prefer it if you leave the incorporation process up to YC, since they specialize in setting up startups, but if you've already incorporated (or even taken funding), it's not a deal-breaker -- unless it's been done in a way that's incompatible with YC investment.
- callmevlad 14y ago
  Thank you! That helps a lot.
- bazookaBen 14y ago
  you can also incorporate before applying (if you're serious about the idea). Use services like LegalZoom, they cost around $300-$600. In the event that you do get into YC, or raise 5-6 figures of seed money, you can always go to a lawyer and reissue stock certs, articles of incorporation, etc.
tylermenezes 14y ago
YC will make it extremely easy to incorporate, so do that if you can.

pplante 14y ago

in my experience, regardless of your application to YC it is a good idea to get things documented. not because you mistrust your cofounder, or anything of that sort. simply it puts everyones mind at ease for what they get out of it. not having documentation lingers in the back of your mind. just my 2 cents.

callmevlad 14y ago
Totally agree about getting everyone on the same page and putting things on paper. The main reason I asked, however, is cost. Some lawyers have squishy/unpredictable pricing when it comes to formation and advice, while the fixed "good" ones are not cheap (e.g. ~$5K). Others try to wave their hands around pricing and just use a "pay it later" approach, but we'd rather keep things simple. I was just wondering if it's safer to get YC help/guidance to make sure we don't get burned, in case we get in since the timing between now and the deadline is almost a rounding error.

thaumaturgy 14y ago

http://news.ycombinator.com/item?id=2246544 http://news.ycombinator.com/item?id=2246544: > Don't incorporate, though, if you can avoid it. It's easier to start with our paperwork than to transfer an existing LLC or S-Corp to a C-Corp. http://news.ycombinator.com/item?id=1778985 http://news.ycombinator.com/item?id=1778985: > It's not a deal-breaker unless it's botched. The right way to do it would be to use a convertible note written so that YC funding wouldn't trigger conversion. If you have a lawyer who can arrange that. But you'd have to incorporate, and you (and we) would then be stuck with however you did, so we'd hope you did it right. According to those and other previous comments from him, they prefer it if you leave the incorporation process up to YC, since they specialize in setting up startups, but if you've already incorporated (or even taken funding), it's not a deal-breaker -- unless it's been done in a way that's incompatible with YC investment.

callmevlad 14y ago
Thank you! That helps a lot.
bazookaBen 14y ago
you can also incorporate before applying (if you're serious about the idea). Use services like LegalZoom, they cost around $300-$600. In the event that you do get into YC, or raise 5-6 figures of seed money, you can always go to a lawyer and reissue stock certs, articles of incorporation, etc.

tylermenezes 14y ago

YC will make it extremely easy to incorporate, so do that if you can.