11–20 of 55 posts
This is awesome. For anyone who's starting a company, Clerky is by far the best way to do all the legal legwork. I've used a number of companies to try to save time (including Stripe Atlas, which is kind of a disaster) and wish I'd just done everything through Clerky.
This is really great. One feature request: it'd be great to be able to view the whole handbook as a one page document (e.g. I want to save it to Instapaper to read later) or as a complete PDF.
This is awesome. For anyone who's starting a company, Clerky is by far the best way to do all the legal legwork. I've used a number of companies to try to save time (including Stripe Atlas, which is kind of a disaster) and wish I'd just done everything through Clerky.
Curious - what's a disaster about Stripe Atlas? I would have considered going down that route if I was to start a company
I used them primarily to get the bank account with minimal fuss and now I'm regretting it. :)
Earlier quoted context omitted.
Amazing. Thank you for doing this. I hope comprehensive useful content as marketing continues to become more popular. Question: When is the earliest a founder can think about super-voting shares, a la Facebook/Alphabet? What's the process here?
Great question - there's nothing stopping you from doing it at incorporation. But it's pretty rare. Very few companies will have enough negotiating leverage to keep it when they raise money. So rather than complicate things from the start, I think the majority view amongst startup attorneys (there are differing opinions on this) is to go with the standard setup, then add in super-voting later on if the company is in…
Additional question added with an edit: If someone wants to start a company with the goal of never going public (i.e. Bill Gates has talked about regretting going public and only did so because they needed better liquidity for employee options and I believe they were coming close to the shareholder cap) -- what should someone be thinking about nice and early?
2nd additional question: I've heard of unique corporate structures, like where an LLC owns a C-Corp. Any suggested resources for learning some basics there? One well known startup that I won't name has this setup
3rd additional question: If you a friend of yours was starting a company and you were almost certain that they'd eventually be doing $10s of billions in net income, what special things from a legal sense should they look into setting up early that are hard to change later on? (e.g. incorporation in Ireland or things like this)
Hi everyone! I'm one of the cofounders of Clerky :) We've gotten a ton of questions from founders over the years - this handbook is what we always wished existed, so that we could point people to it. There are already a lot of great blog posts by attorneys out there, but we thought it was also important to have something that (1) helps founders build a solid foundation of knowledge rather than piecemeal, (2) covers t…
Amazing. Thank you for doing this. I hope comprehensive useful content as marketing continues to become more popular. Question: When is the earliest a founder can think about super-voting shares, a la Facebook/Alphabet? What's the process here?
Earlier quoted context omitted.
Great question - there's nothing stopping you from doing it at incorporation. But it's pretty rare. Very few companies will have enough negotiating leverage to keep it when they raise money. So rather than complicate things from the start, I think the majority view amongst startup attorneys (there are differing opinions on this) is to go with the standard setup, then add in super-voting later on if the company is in…
Noted! Thanks. Additional question added with an edit: If someone wants to start a company with the goal of never going public (i.e. Bill Gates has talked about regretting going public and only did so because they needed better liquidity for employee options and I believe they were coming close to the shareholder cap) -- what should someone be thinking about nice and early? 2nd additional question: I've heard of uniq…
2. It shouldn't change much early on... it would probably be premature optimization to think about it early on, to be honest. The shareholder limits can lead a company to go public, but I think the laws have changed since Microsoft's time to make this less of an issue. Of course, you still have the issue of shareholder liquidity, so I suppose you will want to plan to be able to buy back people's equity :) Also, VCs will usually have demand registration rights that can force the company to go public at some point (never seen those negotiated away though).
3. Usually startups are more forced into more exotic corporate structures due to having some pre-existing business that is hard to convert into a DE C-corporation. So it's usually not something they sought out. I don't know of any good resources for these types of setups unfortunately - in general, the less standard something is, the more I think an attorney should be involved. I would only recommend DIY approaches in areas where there is a ton of standardization.
4. It sounds counter-intuitive, but for startups, I don't consider there to be any special things to look for. VC backed startups are all setting up to be massive successes - if there were any significant issues with respect to highly profitable companies, they would have likely been addressed.
Which is not to say that you won't need to change things later on - but the optimizations that are not done up-front are skipped because the opportunity cost in the early stages is not worth it. Many startups do not get off the ground because too much time was spent on hyper-optimizing legal / tax up front. It's usually better to just go with the beaten path on the legal front, and focus on the business.
But yes, ultimately, there will probably be some off-shoring involved in optimizing that kind of massive success.
Hi everyone! I'm one of the cofounders of Clerky :) We've gotten a ton of questions from founders over the years - this handbook is what we always wished existed, so that we could point people to it. There are already a lot of great blog posts by attorneys out there, but we thought it was also important to have something that (1) helps founders build a solid foundation of knowledge rather than piecemeal, (2) covers t…
Amazing. Thank you for doing this. I hope comprehensive useful content as marketing continues to become more popular. Question: When is the earliest a founder can think about super-voting shares, a la Facebook/Alphabet? What's the process here?
Very few startups are in a position to negotiate super-voting shares - it is a bit like a group of teenagers in new punk band worrying about what they are going to do with all the millions they will make when they release their first record.
Earlier quoted context omitted.
Curious - what's a disaster about Stripe Atlas? I would have considered going down that route if I was to start a company
Well, they screwed up filing docs for a friend of mine, we haven't gotten an EIN after a month, and the bank account with SVB is really limited (SVB won't do a credit card for those accounts, for example). I used them primarily to get the bank account with minimal fuss and now I'm regretting it. :)
We incorporated our company via Clerky and did our bit of angle investment stuff through them, as well as some of our other contractors IP paperwork.
I recommend it to anyone who asked me about doing a startup.
1. Law can be a morass and who then can you rely on when trying to understand it via online resources? Well, for startup legal issues, the answer now is the Clerky Handbook: thoroughly and carefully vetted by those who have lived and breathed this stuff for decades while working in the trenches with founders of all stripes. If you want reliability, you can’t ask for better.
2. The Handbook has scope limitations and that is understandable: to be useful for founders, the core part of the Handbook must by definition be strictly bounded or it loses effectiveness by injecting more nuance and complexity than is needed to convey the fundamentals. If the need is there (and I assume it will be), nuance and complexity can be added with adjunct materials.
3. To date, the Clerky founders have done a superb job of taking legal complexity and turning it into simple and streamlined processes - how to do a Delaware C-corp, how to do convertible notes, etc. This Handbook extends this to the idea of simplifying legal understanding, which is no small feat. In the end, it may look simple and easy but this is incredibly hard to do and all the more reason the accomplishment is to be commended.
4. The hand of YC seems to hover in and around most startup innovations of the past decade and this Handbook is no exception. So many barriers to founder success have come down in recent years and founders have YC to thank for much of this change. Add this Handbook to advances in which it has had a role.
5. The startup world is an amazing place. One advance after another, nonstop over many years. Now add this online resource to the list as a great reference platform to which many quality people have contributed. As it grows and develops, it will do great service for the common betterment now and for many years to come. Great work and kudos to those who drove this effort!