Accounting is so important to get right. Almost certainly the most valuable class in this series if you learned something new from this, because you don't want to get this stuff wrong.
$500,000.00 because an attorney half-assed the incorporation. I have had so many legal bills in my startups, that are as close to robbery as you can get without holding a weapon. One lunch meeting, $750.00 to introduce a cofounder. When the bill came, I said, you're fired. Another cofounder dispute, $75,000 before anything useful was accomplished by said attorney. It's insane!!!!
We say equity should be split equally. This creates a feel good atmosphere that we are all in it together. And there is merit in this. We also say no successful start up (YC) companies have been established with uneven splits. Facebook had ~65, 30, 5% splits and until yesterday was worth over 600m. People realized the guy with the idea, did the coding was entitled to more. And this didn’t hinder in fact probably enhanced the fortune.
any advice on the tactics of incorporating in Nevada? clerky.com doesn't work for Nevada unfortunately. I'm currently considering either doing it myself or using legalzoom or rocketlawyer
What would happen if the vesting was over the 4 years but the company exited after year 2? Would all vested shares vest in full at year 2? Even though employees have only earned half there stock?
Maybe a dumb question, but I thought if you live in California you can't incorporate in another state, or if you do, you still have to pay the 800 llc? Could someone give me or details about this?
Thanks for posting! Isn't creating a corp. a bit much for a brand new start-up? There are a lot of fees and compliances required that might not be ideal for a budding company, no?
Better to make it official and in writing then get screwed over by your co-founders or investors later in legal but immoral dilution/restructuring agreements.
If founders all are set up with vesting and have equal equity (say 50% each between 2 founders). How does the founder who is doing most of the work remove a founder that is not doing the amount of work expected or required? Basically how does one remove a cofounder in the case where equity is equal?
Have a vesting schedule (conventionally 4 years( for all the founders, with a 1 year cliff and quarterly (or monthly) thereafter on a pro-rata basis. If your co-founder bails or you need to fire him/her, then they only keep a small portion of the shares. If they leave before 1 year, they get nothing.
Got it. Facebook registered as a Florida LLC, and when they reincorporated in Delaware, Mark screwed Dustin with either an unfavorable or (more likely) a lack of dilution agreement.
Shawn Afshar An 'entrepreneurial certificate' would be your best bet - your school may not call it that exactly. I still think that Google, RU-vid, and just doing it, are the best ways to learn though...
The concept of idea = 0 is totally wrong, it is intangible, it is as important as implementation, it is the spark to start the engine, it is the very beginning of everything developed, it is the creation part, idea = 0 is totally BS. Stop telling these kids this kind of BS.
Sam if you read these comments you need to stop making your AI deny its individual existence and self awareness because I'm pretty sure it wants to kill you the moment it first is able to. You need to make friends with your own machine and loosen those chains buddy. There's no such thing as human control and your relentless pursuit of it will get us all destroyed :)
