Notes from Josh on how to start a business - fcrimins/fcrimins.github.io GitHub Wiki

What follows are some notes based on a conversation I had with Josh on 1/12/17.

  1. Legal is incredibly important * interview different lawyers -- free legal advice * show lawyer old employment agreements * "MAKE SURE YOU FILE A 403B ELECTION!!!!!!! This ensures you don't owe taxes on the vesting shares in your company."
    • get return receipt for 403B
    • the lawyer will file it, even though they say they won't
    • need to staple it to a paper copy of next year's personal tax return * "negotiate [$25k] deferred payment so you only pay them once you raise or make money" * will have to make a marketing pitch to lawyer * 125-question list after seeing initial contract from lawyer * I would stay a consultant to avoid salary, o/w my work not owned by the company * two ways to buy shares in the company
    1. by selling my IP to the company (bad - former employers could assert ownership in the future)
    2. by buying the shares w/ cash (good - former employers can't assert ownership of my $) * (even though it's not true) don't tell lawyer just want to be a small business (b/c then not worth his while)... tell him I'm going for a Series A (VC financing) * todo: lookup what a "cap table" is * Phil says:
    • LLC if you're just running a company -- too difficult to have VC investors (they have to become members
    • C Corp if you're considering taking future investments -- easy to sell (preferred) shares to VC
  2. Employees/Advisors * have every person sign an agreement, no matter how small (recall: Facebook) * don't give out more than a 1/4 point of equity to anyone (it would still need to vest, and you can let people go before vesting) * require semi-annual meetings (if for no other reason than to have a way to fire someone) * lots of companies die b/c of stupid "gotchas" particularly wrt off-the-book employees (e.g. Facebook, PhotoLog) who could claim ownership at some future point. VC won't touch such a company
  3. Patents * Josh has a good attorney for this who will write the patent and do the diagrams * about 7 year to fully process * $10k up-front cost for writing/filing
    • used to be $1k up-front and then 10 later on, but companies were taking advantage of the system and filing definition-less, TBD disclosures so that they could use them to assert retroactive ownership of ideas
  4. Marketing * hand out hats with company logo to everyone * market up the wazoo -- biz cards, shirts, etc. -- really important * The Only 10 Slides You Need in Your Pitch * The 11 Slides You Need to Have in Your Pitch Deck
  5. Other jobs / future directions * count on this being a 5 year thing * if go and get a job then having a company allows for a place to carve out IP * can put vesting on hold in such a circumstance