So, I need to incorporate my startup. After some research I'm pretty sure I want to be a Delaware C Corporation so I can sell later.
A friend of mine, a corporate lawyer, is interested in funding my startup and providing the initial legal services, but there are a few big catches: this guy is extremely difficult to deal with (history of mental illness) and doesn't seem to know much about the issues surrounding startups. I had to explain to him why I want to be a C corp, and I'd think he should already understand that.
My intuition obviously tells me to avoid this guy if I can help it, but here's the real problem: I'm a complete bootstrap startup and I have to pay the bills in San Francisco. If my friend doesn't incorporate me, I'll have to use one of those incorporation websites - I can't afford to actually pay a lawyer to do it. Am I insane to even consider this option?
It seems like your gut is telling you not to do it, and I agree.
Run. Run far away from this guy.
Now for the rational explanation: What is he offering besides money? It's nice that he is willing to give you money, but does he have any contacts or experience or skills that might put you in a better position? Doing something just because you are cash strapped is a horrible idea.
You're right - I know dealing with this guy is a bad idea and I'm not going to do it. What I'm really trying to figure out here is what my options are.
If you're based in California and do most of your business in CA, it might make sense incorporate in California instead of Delaware. CA has in the last few years made its laws more business friendly, and if you incorporate in CA you'll avoid having to pay certain taxes and fees twice (once for each state). There are a few other benefits DE has, but probably none of them will be useful at your early-mid stage company. Definitely worth looking in to.
A friend of mine, a corporate lawyer, is interested in funding my startup and providing the initial legal services, but there are a few big catches: this guy is extremely difficult to deal with (history of mental illness) and doesn't seem to know much about the issues surrounding startups. I had to explain to him why I want to be a C corp, and I'd think he should already understand that.
My intuition obviously tells me to avoid this guy if I can help it, but here's the real problem: I'm a complete bootstrap startup and I have to pay the bills in San Francisco. If my friend doesn't incorporate me, I'll have to use one of those incorporation websites - I can't afford to actually pay a lawyer to do it. Am I insane to even consider this option?