

Ask HN: Friend and I want to start a business - showsover

We&#x27;re in Belgium, which determines the main part of our question.<p>My friend and I have an idea that could have a nice future.
At the current stage it&#x27;s just that, an idea.
My friend wants to go and get a patent in his name (it was his idea), and then start a company together, to THEN build the product.<p>This requires investment much larger than I can contribute (€5k), which would shit the company from a 50-50 split (me being the technical person, he being the one with the idea and money) to something which I think would not be good for me.
In Belgium there exists the option to start a BVBA, which takes around €18k, or we can start an NV, which takes ~ €60k.<p>I think it&#x27;s completely crazy to invest all this money without even having a prototype or any non-paying customers.
On the other hand, I don&#x27;t know how we could make something that people are willing to pay for without actually charging them and having them pay, without such an investment.<p>My thought would be to first create a prototype, get feedback and non-paying customers, to finally start a company and charge people.<p>I basically have 2 fears:
1) invest money without having 1 customer or even 1 user
2) get shafted (see: jobs &amp; wozniak)<p>So who do I talk to, what do I research?
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yellow_and_gray
> he being the one with the idea and money

Ideas are worth $0. Nevermind you'll switch the idea to something else.

And the type of person who wants to a get patent first instead of getting
users is precisely the kind of person you shouldn't be starting a company
with. A patent won't get you customers. How many companies can you friend name
that lost to another company because of a patent rather than a thousand other
reasons?

Both your fears are valid. Trust your gut. My suggestion: don't start a
company with this friend.

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showsover
Thanks for the reply.

I know ideas are worth €0, but it's a bit harsh to just tell him that right
away.

>A patent won't get you customers.

Yes, but he's scared that, once it's online, others will want to copy-cat and
capture the market. And I understand his fear, but I don't know enough about
patents and legalese to relay his fears.

>Both your fears are valid. Trust your gut. My suggestion: don't start a
company with this friend.

Thanks :) But I like this friend and want to start a company with him, just
not the way he wants to (throwing money around without having even a
prototype)

~~~
Vomzor
I also have a friend I want to start a startup with. But like you're friend,
he has the same misconceptions about businesses most people have. But I like
him & I think we would make a great team. So my plan is to watch
[http://startupclass.samaltman.com/](http://startupclass.samaltman.com/) with
him before we start anything.

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phantom_oracle
You do realize that setting up a company is a waste of time/resources, as
getting a verified and valid patent is quite expensive too?

Take all the resources people are providing you and also try to find a nice
lawyer friend who can draft up a type of document where the initial patent is
filed under the friends name until a certain point where it is feasible to
setup a company.

Once the company is setup (51/49??), you then transfer the patent to the
company, to prevent the patent owner from exploiting any future profits
through legal means.

Also remember that no VC (even in Silicon Valley) will give you seed money if
the patent is not under a corporate name.

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charlesdm
Minimum share capital with two shareholders in a BVBA is €6200, i.e €3100
each. Nothing wrong with setting up an entity, but at the same time, there are
alternatives in Belgium (e.g. a VOF), if you're strapped for cash.

You could set up a "joint ownership" document for the IP rights, which won't
be worth much, but better than nothing.

This said, I would focus on getting customers first. Face it, if this is your
first product, you'll probably fail. It's a cycle everyone goes through. :-)

~~~
showsover
Thanks! I thought that a BVBA would only need €6200 min., and it's nice to see
somebody else thinking the same. I'll check with a bookkeeper just the same
though :)

A VOF seems dangerous to me because of the unlimited liability.

> I would focus on getting customers first That's my idea, but how do you get
> customers without being able to charge them? (AFAIK you can't charge
> customers without being a company)

>if this is your first product, you'll probably fail. It is! And I told him as
well that 90-95% of the startups just fail in their first year, to make him
realise the chances of succeeding.

But thanks for your info as well.

~~~
charlesdm
It's €6200 if you're two shareholders, and €12400 when you're a single
shareholder. Don't ask me where the logic lies in that. You'll still have an
obligation to pay the full €18600, should you go bankrupt, don't forget that!
There are also specific things, such as extended director liabilities, in the
first 3 years after incorporation.

Something else to do would be to build a piece of IP, and then make a
contribution in kind to the company during incorporation. This is also
allowed.

That way, you won't have to contribute cash. If you have software that is
worth €20k (using some valuation), then that can be contributed to the company
as capital.

But you'll still have to pay the notary fees (€1000-€1500), plus for the
valuation report (€800-1000) of the IP. You might also have to pay capital
gains tax on the increase in value of the IP, which probably will be 7.5% on
€20k, or €1500.

Contributing cash is better if you can, though, in this case.

Best of luck !

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JSeymourATL
> So who do I talk to, what do I research?

You MUST seek out and talk to the Economic Buyer. That's the individual who's
life will be helped by purchasing your product or service. The more you
understand his world, the stronger your idea will be.

Incidentally, you CAN sell a concept on a pilot project basis. The customer
becomes your first investor.

------
Vomzor
If you want local advice, try contacting
[http://startups.be/](http://startups.be/)

~~~
showsover
Thank you very much for this link. This helps me / us to get to the next step
in starting a company / launching a product.

