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A startup doesn't need to be a unicorn

mattgiustwilliamson.substack.com

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Re: A startup doesn't need to be a unicorn

#261

Post by epolanski »

tptacek wrote: post #213
shafyy wrote: post #210

Earlier quoted context omitted.

I have founded multiple companies in Germany and in the US. Sure, in the US you have services like Stripe Atlas that make it a bit easier. But still, I would not say it's much crazier registering a company in Germany compared to the US. Of course, it helps if you have a bit of an idea of legal concepts and accounting, but to be honest, that also makes sense, since you are starting a business. This is not to say that…

You can essentially create an LLC in Delaware (from anywhere in the country) as easily as you can create an Amazon account, so that's a big claim.

You can create a full blow corporation in Delaware from Europe in an easier way that you can open here.

Anyway, the benefits go beyond how easy it is to open, the most important things are moving forward with things like stock options, issuing shares, creating preferred ones, etc, etc, taxes access to funding, etc..

Re: A startup doesn't need to be a unicorn

#262

Post by epolanski »

jillesvangurp wrote: post #20

I live in a country (Germany) that is famous for having a lot of "mittelstand". These are basically family owned businesses. Some large German companies fall under this. Aldi and LIDL for example, which are super market chains that at this point have a global presence. And some large companies (Bosch, Siemens, VW, etc.) are actually a multitude of smaller companies. Much of the German economy is smaller and bigger sp…

I see your point, but at the end of the day you look at the 30 biggest companies in Germany by market cap and they are essentially the same after decades which is not really a symptom of a dynamic economy (for good and bad).

Re: A startup doesn't need to be a unicorn

#263

Post by 9rx »

tptacek wrote: post #255
9rx wrote: post #247

Earlier quoted context omitted.

> Are you saying that it's hard to bootstrap a pure B2C business using only B2C revenue sources? I said that consumers don't like to buy much these days, so business opportunities are effectively limited to selling to other businesses. But businesses can't absorb buying your wares if they can't sell to someone else in kind – eventually meaning the consumer. That is, unless they have angel money to burn. So what was a…

I think you should just take "yes" here for an answer because very obviously you can make lots of money freelancing/consulting to other companies.

"Yes" doesn't explain your perspective, though. Obviously you can make money selling to other businesses. Nobody would think otherwise and the discussion that was taking place fundamentally wouldn't have been possible if that weren't the case. But what is it that you want to add to the discussion? That is what is not clear.

You put in time to tell us something. It is no doubt interesting. But, unfortunately, it got lost along the way. I am still interested in whatever it may be.

Re: A startup doesn't need to be a unicorn

#264

Post by Propelloni »

nottorp wrote: post #92
Propelloni wrote: post #72

Earlier quoted context omitted.

First, it is sufficient to only pay 50 % of the stock capital at registration of the GMbH, ie. 12500 EUR. Obviously you also have less operating capital then. Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. The only thing annoying about German GmbH is that it can take 6-8 weeks until you get your tax id and registration numbers. You can, of course, already d…

> Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. That's fine if you start a restaurant or small workshop and need money for salaries, materials etc, of course. It's a barrier to entry when you can start something digital only with just a person or three putting in sweat equity and zero to very little actual cash.

The barrier to entry is the idea that you need a limited liability corporation to start something digital by the seats of your pants. You can always start as a GbR (virtually no costs, spend a day at your city's administration to get a tax id). I mean this in the most charitable way, what kinds of liabilities are you afraid of in that scenario?

Once your idea gets traction and money comes in you hopefully will be able to spare the 1 EUR you need for an UG. Anyway, I recommend investing into founding a GmbH as soon as possible, not for liability's sake but marketing's. You will not make inroads into corporate procurement without a "proper" incorporation.

Re: A startup doesn't need to be a unicorn

#265

Post by dinoqqq »

pembrook wrote: post #229
Bewelge wrote: post #132

Earlier quoted context omitted.

I agree that the process is unnecessarily complex, but I also think hiring someone for that would be the wise choice in most places anyway. And even in Germany hiring someone for that would probably amount to paying 500-1000€ for the whole registration of the company instead of doing everything yourself and only paying the 100-200€ notary fees. It's not as bad as you might think. > I will never try it in my home coun…

> but I also think hiring someone for [government paperwork] would be the wise choice in most places anyway. I’m not sure if you’ve ever tried founding a business or fundraising in any other non-Germany country, but this is an insane thing to say imo. Is this why Germany has no globally relevant software (or hardware tbh) companies founded in the last 40 years? Are we sure we want to be holding up this model as an ex…

You probably missed SAP then.

> The company is the largest non-American software company by revenue and the world's third-largest publicly traded software company by revenue. As of December 2023, SAP is the largest German company by market capitalization.

https://en.m.wikipedia.org/wiki/SAP

Re: A startup doesn't need to be a unicorn

#266

Post by codethief »

dinoqqq wrote: post #265
pembrook wrote: post #229

Earlier quoted context omitted.

> but I also think hiring someone for [government paperwork] would be the wise choice in most places anyway. I’m not sure if you’ve ever tried founding a business or fundraising in any other non-Germany country, but this is an insane thing to say imo. Is this why Germany has no globally relevant software (or hardware tbh) companies founded in the last 40 years? Are we sure we want to be holding up this model as an ex…

You probably missed SAP then. > The company is the largest non-American software company by revenue and the world's third-largest publicly traded software company by revenue. As of December 2023, SAP is the largest German company by market capitalization. https://en.m.wikipedia.org/wiki/SAP

I suppose OP specifically excluded SAP as it was founded more than 40 years ago.

Re: A startup doesn't need to be a unicorn

#267

Post by Kwpolska »

greenavocado wrote: post #129
martin_a wrote: post #112

Earlier quoted context omitted.

Not true. Go to your hometown administration, pay 35 Euro and leave 15 minutes later with a "Gewerbeanmeldung" which enables you to start doing business right away.

You are lying by omission. The Gewerbeanmeldung typically registers you as a sole proprietor (Einzelunternehmer) or GbR (partnership). Most tech startups need a limited liability structure like GmbH (similar to LLC) or UG. Those require notarized founding documents, minimum capital requirements (€25,000 for GmbH), and a commercial register entry (Handelsregister) The simple Gewerbeanmeldung structure is problematic f…

> And don't even get me started about German employee stock option plans.

My landlord and greengrocer want hard cash, not stocks of a startup that may collapse next month.

Re: A startup doesn't need to be a unicorn

#268

Post by grandempire »

jermaustin1 wrote: post #167
mikigraf wrote: post #152

Earlier quoted context omitted.

And open up for liability

Is this really true? I'm in the US, and have a corporation in the US. I am shielded from liability through the corporate veil, but I also have a $50/mo $2M/incidence liability umbrella. I honestly have no idea if either are necessary, in 20 years of "doing business" I've never had a single liability needing to be covered by insurance or the veil. I think it's wise to have, just in case, but even in lawsuit happy Amer…

> I've never had a single liability needing to be covered by insurance or the veil.

That’s how insurance works. You don’t need it often and maybe not even your entire life, but if it happens and you aren’t covered it will ruin your life.

If this description is not accurate for the situation then you probably don’t need insurance.

Re: A startup doesn't need to be a unicorn

#269

Post by Propelloni »

notpushkin wrote: post #235
nottorp wrote: post #92

Earlier quoted context omitted.

> Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. That's fine if you start a restaurant or small workshop and need money for salaries, materials etc, of course. It's a barrier to entry when you can start something digital only with just a person or three putting in sweat equity and zero to very little actual cash.

Why not try Estonia instead? You’ll need to get an e-signature card (“e-Residency”) which might take about a month, then you just submit an online form and get your company number the same day. Mimimum capital is 1 €, and the fees are about 400 € for setup and 100 €/yr for virtual address. https://www.e-resident.gov.ee/eresidency-germans/ The downside, of course, is that you probably won’t get any direct(-ish) subsid…

> Mimimum capital is 1 €,

If you are talking about an OÜ this is often repeated and technically wrong (the best kind of wrong). One, actually the minimum capital requirement is 0.01 Euro per shareholder, and two, Estonian courts are pretty clear that in an OÜ with less than 2500 EUR capital the shareholders are personally liable to cover the difference between share capital and 2500 EUR to trustees.

Re: A startup doesn't need to be a unicorn

#270

Post by garrickvanburen »

I'm always conflicted about this because it's like saying the sky is blue.

Stepping outside of the VC startup bubble, we see small self-funded businesses are the norm. It's the neighborhood businesses all around us.

82% of all US business have https://forstarters.substack.com/p/for-starters-10-the-three...

99.976% of new businesses don’t raise venture capital. https://forstarters.substack.com/p/for-starters-32-start-wit...

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