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I'm already in the process of asking these types of questions myself. 1. When I interviewed with a company in southern California, the CEO noted that there are
by matthewrhoden1 13y ago
I'm already in the process of asking these types of questions myself.
1. When I interviewed with a company in southern California, the CEO noted that there are different types of stock that get issued to the employees that are not as good. I don't know much about stocks, but it's an angle you will have to consider.
2. One thing I found is that if you're a founder, that makes you responsible for both the wins and losses for the company. So when it tanks, debt collectors will come for your stuff too. Where an employee just needs to worry about getting another job. This point alone means you'll have to carefully consider who you're getting in bed with.
3. The only reason I can find for not wanting to increase co-founders is for two purposes. One, it's another person who can flake off and start writing company checks. Two, you'll have to split profits again :)
4. I don't think so, don't quote me.
5. See 2. and 1. to weigh your options. Being a co-founder potentially has a bigger pay off but comes with responsibility.
6. See 5.
I say if you genuinely trust your future partners, to go for it. It's my understanding that if you want to be able to afford that sports car and have plenty of time off for those cool vacations; you either need to be at the top of a company or have enough money to somehow live off interest.
- czed 13y agoThanks for your reply! 2. Is the debt collector part actually true? I always thought debt collectors go after the corporate account and they will only come after your personal assets under very specific circumstances (such as if you haven't paid your employees). Do you have more information about this?
- fsk 13y agoHere is one nightmare scenario (which actually happens to some people). You withhold from employee salaries for taxes, but someone takes the money and disappears. Now, the other founders owe the tax bill AS A PERSONAL LIABILITY (not corporate).
- iends 13y agoWhat country/state are you in? Why would this be a personal liability?
- redtexture 13y agoI believe New York state holds corporation officers liable for unpaid payroll and payroll taxes. There may be other states with similar requirements.
- rpedela 13y agoOne of the reasons for creating an LLC or corporation is so that #2 does not happen. As long as company is set up correctly and founders do not do something stupid like personally guarantee a loan then you should not have to worry about this.
- matthewrhoden1 13y agoThat's true, it does depend on the company type, LLC, Sole Proprietorship, etc. Thanks for pointing that out as I completely forgot about the pros and cons that comes with each.