If I Launched a Startup

I'm surprised to see the recommendation to incorporate in Delaware.<p>Downsides to incorporating in Delaware:<p>1) You still pay full taxes in the state you are operating in (you don't get to avoid taxes by incorporating somewhere else).<p>2) If someone sues you, they can choose to sue you <i>either</i> in Delaware (forcing you to travel to Delaware to defend yourself), or your local jurisdiction. The Delaware courts can be friendly to business, simply because they are often not jury based, but since you're not operating there, they don't have to sue you in those courts. And, the person suing you gets to choose the place they are most likely to win in.<p>3) Many states will require you to register as a "foreign corporation", possibly for more money than just incorporating there.<p>Yes, you can structure your company more flexibly, but are you really using some complicated structure that is only allowable in Delaware?<p><i>Edit</i>: Just in case I'm misinterpreted, I do think this is a valuable post as a whole.

I actually don't understand the straight 4 year vesting schedule for founders. It seems unfairly favoring the investors. For founders who have poured their hearts and souls into building product and market initially, they still have to wait for 4 years after accepting funding to get their full reward? And risk losing their work along the way? And yes, many founders have been forced out from their startups before their 4-year schedule.<p>For startups that have product and market before funding, it would be more fair to have a "regressive" vesting schedule, e.g. 25% immediately vested, 30% 1st year, 20% 2nd year, 15% 3rd year, 10% 4th year.

Pretty good articles. The blog is really nicely designed, too.

"Asking a VC to sign a NDA is tantamount to splitting 10’s at the blackjack table" - Funny.

I don't see the point of authorizing that many shares. I've always authorized 1,000 and initially issued 100 to the founders. 1,000 is enough to get the % breakdowns you need and you aren't charged for having that many shares: <a href="http://www.corp.delaware.gov/frtaxcalc.shtml" rel="nofollow">http://www.corp.delaware.gov/frtaxcalc.shtml</a>

if you have vested share scheme with a 1 year cliff then also have 'acceleration on change control' i.e. if you get bought out early then you don't want to be waiting years for the remainder of your money, get the payment accelerated

Thanks for the link - bookmarked for further reading, I wish I'd read this a lot earlier. This is why I love the internet - information empowers us all.

It is great that he summarized many of his posts in one concise post.<p>I've read and followed his advice to form my first corp recently. But it took a few days of research to understand what he was saying and why.<p>It still costed me over $2k to get incorporated though.