The main things you have to do are incorporate the company, appoint a board (presumably you two), issue stock, and each sign agreements with the company saying that your work becomes the company's IP.
You should probably vest some or all of the founders' stock (the usual time is 4 years) as a way of deciding in advance what happens if you split. It is a huge distraction to negotiate that later.
Don't incorporate as an LLC unless you don't plan to either take investment or sell the company.
You should postpone incorporating only if (a) you're still not 100% sure you want to start the company, (b) you're not sure yet what the stock allocation should be, or (c) you want to get funding soon from YC or some other investor who would prefer to start with a clean slate.
Use a lawyer. And if this is a startup, get one who works with startups, because the issues with startups are different from ordinary businesses.
I don't really understand why people shouldn't incorporate or even take investments before YC. Can't you just take the stock as advisory shares and buy convertible debt (if they even want cash)? Neither really affect or are affected by the valuation or current amount of investment.
From what I understand, a non-resident alien (i.e. me) can't be a member of a corp in the US, but can be a member of an LLC. What other options are there for a UK resident?
Comments
The main things you have to do are incorporate the company, appoint a board (presumably you two), issue stock, and each sign agreements with the company saying that your work becomes the company's IP.
You should probably vest some or all of the founders' stock (the usual time is 4 years) as a way of deciding in advance what happens if you split. It is a huge distraction to negotiate that later.
Don't incorporate as an LLC unless you don't plan to either take investment or sell the company.
You should postpone incorporating only if (a) you're still not 100% sure you want to start the company, (b) you're not sure yet what the stock allocation should be, or (c) you want to get funding soon from YC or some other investor who would prefer to start with a clean slate.
Use a lawyer. And if this is a startup, get one who works with startups, because the issues with startups are different from ordinary businesses.
I don't really understand why people shouldn't incorporate or even take investments before YC. Can't you just take the stock as advisory shares and buy convertible debt (if they even want cash)? Neither really affect or are affected by the valuation or current amount of investment.
From what I understand, a non-resident alien (i.e. me) can't be a member of a corp in the US, but can be a member of an LLC. What other options are there for a UK resident?