
Starting a real business - hepha1979
https://stripe.com/blog/atlas-guide
======
patio11
I wrote this (and the linked guide). Feel free to ask me if you have any
questions or comments, in particular about things you'd like to see us cover
in the future. If you'd rather do it over email, my address is my HN username
@stripe.com

~~~
wolfgke
> Feel free to ask me if you have any questions or comments, in particular
> about things you'd like to see us cover in the future.

There is still no writeup why Stockfighter was wound down, though this was
promised by Thomas H. Ptacek/tqbf on
[https://twitter.com/tqbf/status/771533037666390017](https://twitter.com/tqbf/status/771533037666390017)

Concerning the blog post here: As you surely know in Germany credit cards are
still not common (by SEPA direct debit mandate and there exists an IMHO far
better option; this option exists in the whole EU, though it is particularly
popular in German). This is IMHO an important limitation of Stripe (and Stripe
Atlas) for German customers (I would even call it a road block for this
market) not to offer SEPA direct debit. Are there any plans to add this option
in near future?

~~~
gabhubert
Hi @wolfgke! I work at Stripe. You're right about the importance to cover
other relevant payment methods locally. Happy to chat more about our SEPA
debits plans, feel free to get in touch: I'm just gabriel at stripe dot com.

~~~
repomies6991
Why not answer the question? I would guess there are no actual plans to
implement it.

------
tvladeck
If you're just starting out, the worst decision you can make is to incorporate
as a C-corp. An LLC makes vastly more sense, even for the tiny proportion of
companies that want VC funding (and specifically institutional funding -
funding from other sources would not matter as much - I'll explain why below).
Stripe Atlas really ought to make the default an LLC.

The two major reasons why:

1\. When you're a C-corp, you pay taxes twice. Once at the corporate level,
and once at the individual level. This matters both for ongoing income but
also for any liquidation event - as most liquidation events are asset, not
stock, sales, you're getting taxed twice here too.

2\. You can go from LLC -> C-corp easily but not the reverse. Why would you
make the decision before you have to? Start as an LLC. In the _very_ unlikely
event you are taking institutional funding you can convert; in most cases,
you'll happily stay as an LLC and keep the extra tax dollars you'd be giving
the government.

Finally - all this business that VCs prefer to invest in Delaware C corps
because of the legal knowledge there is - sorry - bullshit. They do it because
they _have_ to invest in taxed entities, because they themselves are
partnerships so their interest in any flow-through entity will flow up to
_their_ investors, some of which are non-profits. Non-profits, like pensions,
risk losing their non-profit status if they have unrelated business taxable
income. There _is_ a solution here, which is to have a special purpose blocker
corp that sits in between the VC partnership and the LLC. This is done _all
the time_ in private equity but not in VC and there is no principled reason
why not.

So there you have it. Don't do Stripe Atlas because you're forcing yourself to
make a decision you don't need to make right now, that's irreversible, and
that may end up costing you a lot of money.

IANAL, but I am a Wharton MBA

~~~
jayjay71
I started my company as an LLC. Since it began in Pennsylvania, I registered
as a PA LLC. Welp, I applied to Y Combinator and they accepted me, but it
turns out they won't invest in LLC companies. I figure, no biggie, I'll just
convert to a DE C Corp as I'd been planning to do eventually anyway. It turns
out this isn't so simple for dissolving a PA LLC, and it is a several month
process. I almost wasn't accepted into Y Combinator as a result because they
aren't going to wait several months before making their investment, and was
only able to attend because a very experienced lawyer found a loophole to
convert my company into a PA C Corp.

I am _still_ suffering headaches from this, even after my company shut down,
because of all sorts of bizarre issues of being a PA C Corp. And since nobody
knows anything about PA C Corporations, I can't use standard documents and
legal advice is particularly expensive (and usually not the best).

Corporate law isn't always so cut and dry.

~~~
huac
Can you start a DE LLC, if you are in another state?

~~~
jayjay71
Yes, you can register an LLC or C Corp in any state, but the reason people do
things a certain way is usually because of taxes. You don't want to get double
taxed (the specifics are nuanced and vary from state to state).

If I were to do it all over again, I would just start out as a DE C Corp.

------
soared
> 80% of entrepreneurs are sole proprietors or partnerships

This seems interesting but makes complete sense. Most ideas likely won't pan
out and incroporating usually isn't worth the time. I'm in Colorado and making
a c-corp took all of 15 minutes, but I've been told in other states its a huge
proccess. If it wasn't so simple and I didn't have free legal support, I
definitley would not have done it.

[https://stripe.com/atlas/guide#incorporation](https://stripe.com/atlas/guide#incorporation)

~~~
DINKDINK
Are you the only proprietor of your C-Corp?

"Corporations. Corporations (both C corporations and S corporations) have the
strictest internal requirements, including holding initial and annual director
and shareholder meetings, adopting and maintaining updated bylaws, issuing
stock to shareholders, and recording all stock transfers. ... Facing the
consequences

If a corporation or LLC is sued and unable to show it met all corporate or LLC
formalities and state requirements, a judge can rule that the company has been
acting more like a sole proprietorship or general partnership. This can result
in “piercing the corporate veil” meaning that limited liability protection
disappears and leaves individual owner(s) assets vulnerable if a lawsuit
judgment is made against the company."

Source: [http://www.bizfilings.com/learn/business-
compliance.aspx](http://www.bizfilings.com/learn/business-compliance.aspx)

I've found that bizfilings has a wealth of high-quality information on
incorporation and other requirements for starting a business

~~~
soared
Yeah I am the only owner. Luckily I had a startup lawyer helping me for free,
and the general message was to just act like a business and you'll be treated
like a business. Keep records of things, don't mix personal and business
money, etc.

------
jakozaur
Absolutely amazing world for entrepreneurs around the world. It used to be
that incorporating in Delaware for foreign companies was almost a secret
knowledge that cost quite a lot in legal fees and travel. Right now it is
almost click through. I hope this will lead to VC money being more accessible
as anyone can create Delaware if there is someone willing to write you cheque.

Same with credit card payments, it used to be super expensive and painful to
integrate, right now its a simple API.

Thanks Stripe.

------
hbcondo714
Lengthy and comprehensive guide[1] but no support for LLCs (yet) which cost
less to incorporate

[1]
[https://stripe.com/atlas/guide#incorporation](https://stripe.com/atlas/guide#incorporation)

------
annerajb
I was so exited about Stripe atlas.

But for me it came around 2 months late.

I already used a online website to register a C-Corp and they have no process
to "import" your c-corp you either start all over again or dont use it.

I also have no idea what would I have to do to "close" the existing c-corp and
start anew using atlas.

------
jondubois
I've never had this "imposter syndrome".

The main feeling I've struggled with in the past was that the market I was in
had been monopolized by well-funded, well-advertised imposters.

I mean that strictly in the sense that a lot of startups these days are
selling their product before it's even finished - I feel that by me actually
taking the time to complete the product (instead of going around raising
capital), that I'm at a disadvantage.

It's dangerous to legitimize this concept of 'imposter syndrome' \- Some
actual crooks might use it as an excuse and start to think that what they're
doing is normal.

~~~
chrisbennet
I think you may be misunderstanding "imposter syndrome".

From Wikipedia:

 _" Impostor syndrome (also known as impostor phenomenon or fraud syndrome) is
a concept describing high-achieving individuals who are marked by an inability
to internalize their accomplishments and a persistent fear of being exposed as
a "fraud"."_

------
crispytx
Seems like Stripe is trying to jack Clerky's business.

------
giis
Anyone here can share their thoughts on benefits of Delaware C-Corp vs
incorporating in Singapore?

~~~
geff82
It is two different countries. It always depends, where your main/your first
business will be. I, for example, could easily set up a company in Dubai with
ZERO taxes. But as my main customers live in Germany, it will be difficult for
me to tell them why they are invoiced by a company in the UAE

------
hobo_mark
In case anyone else is going to Ctrl+F 'Europe':

> We’re writing primarily from the perspective of U.S. companies—it’s most
> relevant to Atlas customers (all of whom have U.S. companies)

I take this to mean this won't work for those on the other side of the pond?

------
rubicon33
While I definitely appreciate what Stripe is trying to do here, they've left
out one of the most important, but perhaps less tangible aspects to starting a
business:

Getting off the ground!

Say you have an idea, maybe even a prototype... MAYBE even a functional
software business that's drawing some small income! How do you go about
GROWING that idea, or tiny business? Do you HAVE to seek external capitol? Do
most successful startups utilize angel / VC funds to "make it"?

If so, where do you go, and how much do you ask for? What happens if your
business fails?! Do you owe all that money back? Are people going to be pissed
at you? Are you blacklisted from the industry? Etc. Etc.

The point I'm getting at is... It seems to me like they've left out the part
about resources. Funds. The stuff that really gives your idea, a strong kick
in the pants.

~~~
bgilroy26
You do not have to seek external capital. If your business fails you are not
blacklisted from industry.

The link below has some basic information about fundraising for startups

[http://venturebeat.com/2009/07/08/startup-
fundraising-101/](http://venturebeat.com/2009/07/08/startup-fundraising-101/)

------
edblarney
"We’re all making it up as we go along."

This is rubbish. Most regular people are not :). Entrepreneurs - maybe.

Just because you're 'faking it until you make it' does not necessarily mean
that it's 'ok'.

Most businesses are well established, and there are long running norms and
practices.

Working for a bank, usually you need a very specific education, then several
years of learning the ropes, and there's no way around it, unless you want an
embarrassing hole in your knowledge.

So yes, it's good advice for some, but there's a reason you might feel like an
'impostor' and it could be because you are. There is a reason that most CEO's
are 40-50 something and not 23. Heyzeus.

~~~
jgforbes
I feel like the "we" in that article is obviously the group of entrepreneurs
and not everyone... especially as the subject of the leading sentence is
first-time entrepreneurs.

~~~
edblarney
Fair enough, but when he says 'we're all' ... well ...

------
sillepl
Stripe Atlas would be a lot better if it would have more of the kind of
payments that CoinPayments allows: ETH, DASH, Monero, Litecoin, ...

I believe that Stripe Atlas has only Bitcoin as a cryptocurrency, correct?

~~~
rco8786
I imagine that including those payment types would have a marginal, at best,
effect on Atlas as a product. In total they probably account for < 0.1%(likely
even less) of all online transactions and are not a real blocker for anyone
starting a business unless the business is dealing in those currencies.

~~~
mtrpcic
Yeah. I suspect that those currencies are so minuscule in volume compared to
USD (and other currencies) that Stripe wouldn't even pay back the engineering
cost of implementing those new currencies (at least, not in the next year or
two)

------
sjg007
hey.. patrick mckenzie aka patio11!

------
hkon
If you want to know if you are running a real business, answer this simple
question.

Are you making money?

If you are, you run a business, if not, you run a liability.

~~~
peterbonney
Making money by what measure? Cash on cash return? Current cash flow? GAAP
profits? Making investments with a positive expected value?

If I buy a government bond I won't "make money" until the principal is repaid.
But that doesn't mean I acquired a liability - it means I invested money in
something.

Likewise for buying real estate or any business that monetizes a capital
asset. Are those not real businesses?

Investing today for uncertain earnings in the future is perfectly legitimate,
in tech, in brick & mortar businesses, really in anything. It doesn't mean you
can be unrealistic, but it does mean that you shouldn't be short-sighted.

~~~
hkon
That is too complicated. Given infinite time, if you don't make money you're
out of business.

~~~
peterbonney
Given infinite time we're all dead.

My point is that "are you making money" (implicit: _right now_ ) is in fact
_not_ an appropriate criteria as you suggest.

~~~
hkon
Then we disagree

~~~
peterbonney
Clearly. :) Per your definition, Uber is not running a real business. I have
serious doubts about their long run viability, but to claim it's not a
business is... strange?

------
miles_matthias
Absolutely love this! There's no one better than Patrick to talk about
starting a "real" business and being a solo entrepreneur. Really looking
forward to learning as much as I can from his guides.

On a personal note, Patrick is an awesome guy. I'm still super thankful he
took time out of his busy schedule to do our little podcast:
[http://startupcto.io/podcast/0-23-cross-training-with-
sales-...](http://startupcto.io/podcast/0-23-cross-training-with-sales-
marketing-featuring-patio11/)

