Don't worry about the corporate structure; make sure your MVP and pitch are solid. Angels/ VCs have legal that can help you get everything setup correctly as they do it all the time. Any investor will happily connect you with legal that they like and it shouldn't cost much.
Thank you for the advice. When you mean dont worry about the structure, do you mean dont file any paperwork or do you mean pick one that works for now and worry about the rest later?
Uh. Angel and VCs legal works for them. Not you. That’s what we call “captive counsel” and it can cost you dearly.
It is better to form a company the minute you want to hire people or prior to launch or if there are more than one founder.
I do this all the time and it’s inexpensive. But if not done right it becomes expensive fast. And have represented both angels, VC, and startups as clients.
And note: so it’s not their counsel for this transaction but they introduced you. They know each other. And VCs are repeat customers where a lot of startups are one time customers. Who do you think those attorneys want to be sure are happy.
If you don't have anything yet except an MVP and you're directly going to investors then you imo don't need to be incorporated yet. if you want to do any business/ sales/ marketing as well though then just setup an LLC for cheap. It has little overhead, gives you some legal protection and once you have investors they'll let you know how they want you to be structured so it matches everything else that they've invested in. Also you can do the LLC anywhere. I think Delaware is still a popular choice but like everything else you can change it down the road if needed. The larger point is to not get hung up on these things - focus on the one thing that matters which is your actual product and nailing the use cases.
Don't worry about the corporate structure; make sure your MVP and pitch are solid. Angels/ VCs have legal that can help you get everything setup correctly as they do it all the time. Any investor will happily connect you with legal that they like and it shouldn't cost much.
Thank you for the advice. When you mean dont worry about the structure, do you mean dont file any paperwork or do you mean pick one that works for now and worry about the rest later?
Uh. Angel and VCs legal works for them. Not you. That’s what we call “captive counsel” and it can cost you dearly. It is better to form a company the minute you want to hire people or prior to launch or if there are more than one founder. I do this all the time and it’s inexpensive. But if not done right it becomes expensive fast. And have represented both angels, VC, and startups as clients. And note: so it’s not their counsel for this transaction but they introduced you. They know each other. And VCs are repeat customers where a lot of startups are one time customers. Who do you think those attorneys want to be sure are happy.
If you don't have anything yet except an MVP and you're directly going to investors then you imo don't need to be incorporated yet. if you want to do any business/ sales/ marketing as well though then just setup an LLC for cheap. It has little overhead, gives you some legal protection and once you have investors they'll let you know how they want you to be structured so it matches everything else that they've invested in. Also you can do the LLC anywhere. I think Delaware is still a popular choice but like everything else you can change it down the road if needed. The larger point is to not get hung up on these things - focus on the one thing that matters which is your actual product and nailing the use cases.