Hacker News new | ask | show | jobs
by contingencies 3049 days ago
First of all, congratulations to you and your team on coming this far.

1. No. Investors will want to see product market fit, size of opportunity, growth potential. Without true and paying customers (people you don't know), this is too hard to claim, so even most angel investors will consider the current state too early.

2. An angel investor would be able to assist you with company registration, however you can also do it yourself through an agency. I would recommend pricing this out (both establishment and annual ongoing fees and charges) so you have an idea of what you're getting in to financially before taking the plunge. This will be part of your first financial forecast, which is going to be maintained going forward.

3. Accelerators are fronts for investment. They also want high growth potential businesses. Unless you can justify this, it may be hard to get accepted. Also, they usually demand full time commitment for the whole team in a certain physical location (ie. whole team has to move cities) and some traction with an MVP at a minimum. Unless you and your team are all willing to quit your jobs, they may not be right for you. However, they may provide the dangling carrot that maintains team motivation and gets you all to commit full time. Only you will know if it's right for your team. Frankly, it's a large risk. You would probably do well to maintain your income and operate the business part time initially.

4. Decide on ownership and investment structure. Commit to paying the C-Corp and related accounting/filing fees. Get it done through an agency. Try to sell the tool and get some real market validation.

5. You don't need articles. You need sales.

In short: Register a company, listen to your real or potential customers, get some sales.

2 comments

>> "An angel investor would be able to assist you with company registration, however you can also do it yourself through an agency."

Although this is true, I would seriously advise the founder to get his own (trustworthy) lawyer assist him through the process, as with everything related to incorporating the company (ownership and investment structure).

More legal advice is always nice but it costs and may not add significant value. Registration tends to be straightforward and necessarily formalizes ownership structure to a significant extent. That said, lawyers may be useful for contracts. If the OP has concerns about registration costs, my advice would be to hold off lawyers at this stage and get a customer first.
Some big firms will do this level of basic legal assistance for small start ups as part of their pro bono program. I believe Bingham McCutchen does, for one, though I don’t know how you apply.
Can't get the customers without registering the company (stripe won't let me go live :) )
I don’t think that’s right. You can have the account in your name AKA sole proprietorship with a dba and then change it to the legal entity later (you may have to migrate to a new account, I can’t recall) but it’s not too hard. Anyway until you have paying customers I’d put off everything else.
Did you look into Stripe Atlas? - they do all the work of setting up the company and bank for around $500.
I did look, but it looks like overkill for the initial start (I don't even know will someone buy the product or not).
you have an MVP that sounds like you've actually honored the "M" part (as many fail to). You find it useful already. Do you honestly think you won't be able to get $500 worth of customers? If you really think that, then just stop. It's not worth your time, because $500 worth of customers is nothing. I'm assuming you're charging more than $1.

If you can get more than $500 worth of customers then who cares? All businesses have costs. The question is, can you recoup them?

Yes, you can incorporate yourself online for like $150, and about an hour with google will tell you which form of corporation is the best fit for you. Probably S-Corp I'd bet. C-Corp is probably overkill.

BUT regardless of if you use that Stripe service or not, use their $500 barrier of entry as a guide for if it's worth continuing or not, because obviously it's enough to make you pause.

Is it not viable using a personal Paypal account at this stage?
starting a business with your finances managed by a company that can, and will, close accounts, and freeze funds for no reason at all is crazy. Especially when they frequently do it when someone suddenly starts making decent money, something all new startups hope to do.

paypal is a dangerous idea to build a business on. Use a real bank that is legally forced to act in a responsible manner with regards to your funds.

No one is suggesting that the business should be built on Paypal. We're talking about a phase where the company is trying to land its first 14 customers or so.
Thank you very much for the amazing feedback. That is what I'm also thinking about, but the starting point seems to be quite challenging for me becuase according to the stripe regulations I do need to open the company or something (I'm not the US based guy).. wil try to solve it somhow on my own.
It might be worth laying out your position in an email to stripe, and asking them to recommend a path.

Ie, this is where I am. What's the easiest way to start using the service? They might suggest a sole trader with a business bank account or some other relatively easy/cheap setup that can be temporary.

Didn't think about it. That's a great advice, will do it and will try to keep the thread up to date. In case it will be usefull for others.