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I think you're asking the right question, just the wrong way. Your question comes across (to me, and possibly others) as "prove to me that not paying myself a salary is illegal?", when I think your real question is "Does it make sense to do this, given the other competing demands on a founder's time?" My personal take is that if you're successful (let's use getting to your first actual cash compensation non-founder hire as a proxy for this), you can fix it at that time, if you don't make it that far, it's just as well you didn't waste time on it. Besides, you probably commit "3 felonies per day", what's one more? :-)
http://www.wsj.com/articles/SB100014240527487044715045744389...
http://www.amazon.com/Three-Felonies-Day-Target-Innocent-ebo... The following section of Paul Graham's essay "Why startups condense in America", at http://paulgraham.com/america.html is relevant: "7. America Is Not Too Fussy. If there are any laws regulating businesses, you can assume larval startups will break most of them, because they don't know what the laws are and don't have time to find out. For example, many startups in America begin in places where it's not really legal to run a business. Hewlett-Packard, Apple, and Google were all run out of garages. Many more startups, including ours, were initially run out of apartments. If the laws against such things were actually enforced, most startups wouldn't happen. That could be a problem in fussier countries. If Hewlett and Packard tried running an electronics company out of their garage in Switzerland, the old lady next door would report them to the municipal authorities. But the worst problem in other countries is probably the effort required just to start a company. A friend of mine started a company in Germany in the early 90s, and was shocked to discover, among many other regulations, that you needed $20,000 in capital to incorporate. That's one reason I'm not typing this on an Apfel laptop. Jobs and Wozniak couldn't have come up with that kind of money in a company financed by selling a VW bus and an HP calculator. We couldn't have started Viaweb either. Here's a tip for governments that want to encourage startups: read the stories of existing startups, and then try to simulate what would have happened in your country. When you hit something that would have killed Apple, prune it off. Startups are marginal. They're started by the poor and the timid; they begin in marginal space and spare time; they're started by people who are supposed to be doing something else; and though businesses, their founders often know nothing about business. Young startups are fragile. A society that trims its margins sharply will kill them all." |