
Our Experience with Stripe Atlas - CoreSet
https://formcake.com/blog/our-experience-with-stripe-atlas
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finsrud
I love Stripe. And I agree that Atlas makes incorporation process quite easy.

But when I hear about a SaaS startup being organized as an LLC, I wonder if
the founders considered the potential benefits of "qualified small business
stock" or QSBS, which is only available in a c-corp.

With QSBS, each founder and investor can supersize their exit proceeds by
wiping out at least $10 million in U.S. taxes. (See
[https://www.businessinsider.com/qsbs-qualified-small-
busines...](https://www.businessinsider.com/qsbs-qualified-small-business-
stock-startups-criteria-taxes-2019-12)).

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Jaxkr
Most startups convert from an LLC to a C-Corp when they first formally
fundraise.

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finsrud
True. But the 5 year holding period doesn't start until conversion to a
c-corp. So, plan accordingly.

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siegel
This is true, but starting as an LLC and converting to a C corp does have a
potential QSBS benefit, if you are able to meet the 5-year holding period. The
QSBS deduction is the greater of $10 million or 10 times your adjusted basis
at the time of acquisition of the C corp stock. If you incorporate as a C corp
initially, you get the $10 million deduction, at best. If you form as an LLC
and only convert to a C corp (and get your C corp stock) at the time of your
first financing, your adjusted basis may be significant. If the value of your
equity share is, say, $3 million at the time of your first equity round (not
unheard of), when you convert to a C corp, you potentially get a QSBS
deduction of 10 times that (i.e. $30 million).

Please note that in a conversion from LLC to C corp, you only get the QSBS on
the gain over the initial basis. So, in my example above, if you end up
selling the shares for $2 million in an exit (when the basis when you received
the shares was $3 million), you will get no QSBS deduction.

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LordOfWolves
Attempted Stripe Atlas user here. While the product looks great, it doesn’t
cover all corner cases of business creation, so we ended up not being able to
use it. It turns out that following this revelation, we had to scrap the
associated Stripe account just to be able to rid ourselves of the “complete
your Atlas application” (or similar) at the top of the dashboard too. Just one
anecdote.

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philosopher1234
What corner cases did it not cover for you?

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gentleman11
Stripe Atlas advertises as a way for non American companies to incorporate,
but I had trouble finding more information about what complications to expect
as a foreigner who owns an American company

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estebarb
+1 to this. I know every case is different, but cases aren't that different.
Examples on paying taxes, recurrent costs, important dates won't hurt, and
give a better idea of what people is getting into.

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block_dagger
I want to second the sentiments here - as a one-person Saas biz, Atlas made it
a breeze for me to setup my LLC. Seeing the Visa card with my company name on
it inspires me every day (yes I’m still wet behind the ears). I highly
recommend Stripe and Atlas.

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yazr
As a non-US person, is there anyway to bill using Stripe without
incorporating? I dont mind withholding tax, etc, i just want to be able to
bill and track the initial revenues.

AFAIK, Stripe is not available in all-EU countries. Paypal just works in this
case.

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primitivesuave
I used to teach middle and high school kids how to code for several years. Two
of my students were particularly prodigious programmers who turned their
prototype of an idea into a real company making real money thanks to Stripe
Atlas. With such an accessible avenue to entrepreneurship we are bound to see
many more entrepreneurs.

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webo
Does anybody know if there’s a strict requirement to use Stripe’s payment
processing when part of Atlas? Or can you still use Adyen, authorize.net and
the like?

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patio11
I work at Stripe.

Absolutely not; your company is your company. We’d be thrilled if you used our
other services, but feel like we should have to win your business by being the
best rather than by lock-in. (We even help people get DUNS numbers to
facilitate taking payments via app stores, etc.)

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webo
Thanks Patrick.

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andrew311
Does Atlas setup vesting for the founders?

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patio11
(I work at Stripe.)

If one uses the founder stock issuance tool for C corps, it assists in setting
up 4 year vesting 1 year cliff for all founders.

For needs other than that, we’d recommend speaking to an attorney.

