Entrepreneur Office Hours: Issue #189
Thoughts on the eve of turning 40
Assuming you’re reading this the Friday it’s being published, I turn 40 tomorrow. I’m not entirely sure why I’m sharing that info here, but it’s a “big” number, I suppose I’m trying to process it, and commiserating with all of you is the best option I have.
I remember my mom turning 40 and all I could think was, “She’s so old… she’s going to die soon.” Now that I’m turning 40, I find I’m thinking similar things about myself, and it’s a little terrifying. Though, to be fair, my mom is still alive.
Regardless, for everyone on the other side of the big 4-0, feel free to share any advice/tips/feedback on how to make my new decade the best one yet.
Besides the big birthday news, I’ve got a bunch of random and (mostly) unrelated notes I wanted to get through this week, so I’ll knock them out using bullet points:
The newest featured article in WIRED talks about how Logan Paul and KSI are using their online fame to sell $250m/year in energy drinks. The journalist interviewed an academic expert to weigh in on the phenomenon, and guess who she chose… =)
I’ve finally decided to throw myself into Instagram. Yes, I realize I’m late to the party. I just never particularly cared for the platform. Whatever… I’ve got 100k+ followers across other platforms, so it seems like I should have an active presence on the most popular social media platform in the world, too. With that thought in mind, I’ve been posting videos on Instagram every day for the past week, but I don’t have any followers. If you’re so inclined, give me a follow on Insta… pretty please? Let’s call it a birthday present.
While we’re on the topic of giving a pity follows, I’m also testing Threads. Here’s that account.
For some reason, both articles I posted this week had more reads in their first 24 hours than any articles I’ve ever written. I’m not entirely sure why (they’re not terrible, but I also feel like I’ve written better articles before). Either way, I’m guessing you’ll enjoy both articles in this issue since lots of other people have, so here they are…
Knowing how to use the right tools at the right time can be the difference between epic failure and meteoric success.
Startups are always thinking about fundraising, but very few of them spend much time thinking about whether they should.
Office Hours Q&A
I think I need to incorporate. What’s the best way to find a lawyer to help me set up a C corp for cheap? I don’t have a lot of money and lawyers are expensive. Or do I really need to incorporate at all? How long can a company operate before incorporating?
Let’s get the standard disclaimer out of the way: I am not a lawyer. Everything you’re about to read is my opinion. Please consult with an expert before taking any actions.
Now, let’s start with your question about whether or not you need to incorporate. Technically, you never need to incorporate, but it’s usually considered prudent to incorporate before your startup begins interacting with the public. That’s the point at which your venture could conceivably cause harm to someone else. If that were to happen, you don’t want to be personally liable. Instead, you want to separate your personal liability from your startup’s liability (i.e. you’d want an angry person your startup has aggrieved in some way to sue your company, not you).
There are, of course, other reasons to incorporate, but liability is a big one.
As for hiring a (cheap) lawyer to create a C corp, my first question for you is: Do you really need a C Corp?
C Corps (or their equivalents outside the U.S.) are more difficult to set up and manage. Plus, they require their own tax filing and record keeping. That’s all fine for an established business, but, if you’re just getting started, have you considered a limited liability company (LLC)? LLCs give you the limited liability of a C Corp (it’s right there in the name!), but without most of the regulatory hassle for finances.
Granted, LLCs aren’t perfect. Specifically, if you’re planning to raise capital, then you’ll definitely need a C Corp (so you can sell shares), and you can ignore my previous paragraph.
Either way – C Corp or LLC – hiring a lawyer is one option. The Internet is also littered with dozens of legal paperwork websites (LegalZoom, anyone?) that can help file paperwork for a simple corporate filing (if that’s all it is) for much cheaper. I also feel obligated to mention that your state has a way of explaining how to file the appropriate incorporation paperwork on an official website somewhere. Your state’s website might take a little searching to find, but, in general, assume a site with a “.gov” email address telling you how to file articles of incorporation for your state is a legitimate resource. Just follow the instructions (it’s really not that hard) pay your money, and – boom – you’ll be incorporated (or LLC’d, or whatever…) as cheaply as possible.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!