[dfabulich]

This post doesn't mention when to sign an operating agreement with your co-founders and legally form a company.

IMO, the answer is: you should have a signed equity agreement before you start working on the MVP, and and you must have one by the time you finish working on the MVP.

In practice, you'll probably need to incorporate a business to build your MVP. If you're accepting money from customers, the company should accept their money, not a co-founder directly. (Y Combinator recommends a Delaware C Corp.)

Even if you're just spending money, maybe at first one of the co-founders can fund it out of a personal bank account, but it's way better to have a business with its own bank account and operate the business out of that.

Your MVP isn't really viable unless your co-founders have signed an agreement. Sign one, early.

[mwseibel]

We have a number of companies who apply to YC with an MVP before incorporation. While I agree getting this done is a good idea - its not an absolute requirement for YC.

[dfabulich]

Incorporation isn't required, but delaying equity agreement is a recipe for a painful co-founder breakup later when it emerges that I thought we were going in 50/50 and you thought it was 70/30.

[nostrademons]

You should at least have talked about all the points that go into an incorporation document and some that don't (equity shares, vesting, time & work commitments, decision-making, roles, etc.) and have a verbal agreement that everyone's on-board with. You don't have to actually file the paperwork, which is expensive and creates ongoing administrative work. You should file the paperwork ASAP, but if a founder starts working on the project and then decides that his true desires lie elsewhere or he's not happy with the working arrangement, that's often easier to fix before there's a real company than afterwards.

[mwseibel]

totally agree