No matter what anyone tells you, don't start as a C-Corp, unless you are sure that VC is investing in your company right away. Even the cost of winding down a C-Corp is substantial.
Second biggest mistake I did for my startup; creating a c-corp and the major headaches that came with it. First mistake was reading startup glories and successes and pitching to investors and killing my time. I heard the term "toxic positivity" to describe this. And also the blog that was posted here about not focusing on revenue but making software "bigger" and "better". No offense but it's wrong: focus on the revenue. If people are not paying, your software is worthless.
Let's say you did your accounting wrong and your company owes a bunch of money. These accounting mistakes usually account for double digit percentages of revenue.
If you own an LLC, you get the benefit of only paying taxes once unlike a double taxed C-Corp. The cost is pass through tax liability. If your company owes taxes, the owners personally owe taxes.
Let's take a real world example that happened to someone I personally know. They owned a dispensary, made some money not too much, everything going ok. IRS comes and says 4 years ago you did your taxes wrong. On revenues of ~$2.5M, she owed $400K that she deducted incorrectly due to 280e. In a day, she almost had her life ruined. She's back and opened a couple more dispensaries. She managed to survive others didn't.
If you had created a C-Corp, the business goes bankrupt. IRS collects what it can. You go on your way.
13 is super crucial. It doesn’t matter what you’re doing, making your entire identity revolve around one thing is always a bad idea.
Growth is all about branching out and trying new things. Maybe some of those new things are dead ends, but I find trying new things or hobbies always helps me learn about the things I’m already passionate about. The stress relief and mental break ain’t bad either!
If customers are asking for features, processes, (your time), etc...then don't give that to them. Sell that to them. They'll pay if they really want it.
If a restaurant owner is asked why a certain thing is not on their menu enough times, the smart ones will get that on their menu. Is that new menu item free? Hell no.
What about IP agreements? After reading "Venture Deals" you get the idea that if you to talk about your project and bounce ideas off of them during the development phase they could have implicit "rights" to IP. What do you have to have everyone you talk to about developments sign an IP agreement?
That's honestly something he haven't considered. We generally tend to believe that ideas aren't worth much on their own, so we're happy to talk about our company/experience with anyone.
At our size, the downsides to protecting most of our ideas are outweighed by the value we get from practicing our pitch.
Do you never tell another human anything unless it results in a direct financial benefit for yourself? You're friends must be fabulously wealthy if they spot you a benjamin for every factoid you throw their way.
No matter what anyone tells you, don't start as a C-Corp, unless you are sure that VC is investing in your company right away. Even the cost of winding down a C-Corp is substantial.
https://news.ycombinator.com/item?id=20429286
Let's say you did your accounting wrong and your company owes a bunch of money. These accounting mistakes usually account for double digit percentages of revenue.
If you own an LLC, you get the benefit of only paying taxes once unlike a double taxed C-Corp. The cost is pass through tax liability. If your company owes taxes, the owners personally owe taxes.
Let's take a real world example that happened to someone I personally know. They owned a dispensary, made some money not too much, everything going ok. IRS comes and says 4 years ago you did your taxes wrong. On revenues of ~$2.5M, she owed $400K that she deducted incorrectly due to 280e. In a day, she almost had her life ruined. She's back and opened a couple more dispensaries. She managed to survive others didn't.
If you had created a C-Corp, the business goes bankrupt. IRS collects what it can. You go on your way.
https://investinganswers.com/dictionary/p/pass-through-entit...
Growth is all about branching out and trying new things. Maybe some of those new things are dead ends, but I find trying new things or hobbies always helps me learn about the things I’m already passionate about. The stress relief and mental break ain’t bad either!
If customers are asking for features, processes, (your time), etc...then don't give that to them. Sell that to them. They'll pay if they really want it.
If a restaurant owner is asked why a certain thing is not on their menu enough times, the smart ones will get that on their menu. Is that new menu item free? Hell no.
At our size, the downsides to protecting most of our ideas are outweighed by the value we get from practicing our pitch.
https://en.wikipedia.org/wiki/Retina
Exactly: You tell once growth has stopped and you need a quick fix.
Total, not monthly.