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.
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?
Shawn Afshar An 'entrepreneurial certificate' would be your best bet - your school may not call it that exactly. I still think that Google, TH-cam, and just doing it, are the best ways to learn though...
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.
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.
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!!!!
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 :)
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.
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?
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
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.
Probably one of the most valuable classes in this series, great job!
This information is gold. Thank you so much from someone that could have never have attended Stanford.
Why could you never have attended Stanford?
Very informative. Thank you Kirsty, Carolynn, Y Combinator, and Stanford. 👍🙏
Kirsty has a wonderful voice. #eargasm *-*
+k98killer I agree
Well, it's a young woman who has a british accent. No reason to get excited my friend.
Johnny Sler Have you ever heard an Essex dialect/accent? It is pretty awful. Not all British voices are equally melodious.
k98killer I’m from Britain, she has like the only good British accent I’ve heard, the rest are ugly
All of this is extremely important, wish they had done 2 or 3 on this material.
Should have mentioned that Clerky was backed by Y-Combinator.
Product placement like that can make it difficult to assess the quality of the advice (at least regarding that specific part of the topic)
Almost 7 years later, this information is still relevant and helpful.
Great stuff....
Got to discovered this through YC's startup school, 2018 section.
Thank you YC
Very useful !
I was waiting for this information for some time now :)))
This is gold. Thanks guys for giving this away free
Sam starting it off with a flirtatious neg..... lets goo!
really good one as mostly founders avoid taking these things into consideration
Great stuff I was looking forward to finding it somewhere. Thanks to both ladies.
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.
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?
Tnx sisters. Beautiful lessons.
I did the Delaware c corp but never did file 83B. We never made any money yet. Are we in the right track?
very helpful! thank you
i want an accountant like her.......
Any thoughts on b-corps?
What's a college major that I can learn all about this ?
Shawn Afshar An 'entrepreneurial certificate' would be your best bet - your school may not call it that exactly. I still think that Google, TH-cam, and just doing it, are the best ways to learn though...
+Shawn Afshar www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/1118443616/ref=sr_1_sc_1?s=books&ie=UTF8&qid=1443652261&sr=1-1-spell&keywords=Venture+Deals%3A+Be+Smarter+Than+Your+Lawyer+and+Venture+Capitalis
I guess no one got the Florida LLC joke?
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.
Jimmy T it was Eduardo. They screwed Eduardo
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.
Not what they said... The idea is important only IF executed properly.
Robinson Sarah Robinson Donald Thomas Joseph
from 2:30 - 6:30. They literally give no advice or information. Just say: 'Register in delawate! Why? Because trust us and shut up! Thats why". haha
Peter Thiel says the same thing. C Corp in Delaware. Don't ask questions. Just do it. Save yourself the headaches from now.
I see nothing wrong with a florida llc
At what point must a founder take minimum wage?
You really did cover stuff that I used to find useless to know. great lesson!
Are u an entrepreneur?
Cryptocurrencies at the end? Haha yes! Need to know who that person was!
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!!!!
Power-packed presentation with great advice. Was not boring at all. Love and regards from India 😃
Great presentation
i really enjoyed it and you both collaborated nicely with each other
Regards
Gaven Malope
South Africa / Sandton
great info
Dude asking about crypto in the end is probably a millionaire by now lol
Hahahaha I doubt that crypto market crash
Brilliant stuff! :)
This was the episode I skipped
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 :)
Gold mine
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.
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?
Ironically, or perhaps not, I found this the hardest class to follow lol (but also one of the most valuable ones)
I am unable to understand this lecture, guys any other resources to learn more about it?
Nevada is also a good state to incorporate.
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
Jordan Clifford I wouldn't use any online solution. I recommend real lawyers.
What did you just see, Lisa?
OMG it's Sam Altman before his prime!!!
good example of why notes should be placed on podium or table
I love that--accredited investors!!
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.
Mayi pliz have a look at the docs?
30:00 part tells about finance
Excellent!
.
So was it Guy Kawasaki who said he'd just like to skip the venture capitalists, thank you.