Nagey recommends best practices for setting up a startup to financially and legally protect the founders and the startup.

PEOPLE

• Guest: Stefan Nagey, Cofounder, Capbase
• Host: Anil Hemrajani, Founder of Startup Sidekick

TAKEAWAYS

1. It’s never too early to get your house in order (legal, accounting, etc.). Consider the legal and financial protections you need for the next couple of milestones.
2. If you’re going to be fundraising, set up your corporation as a Delaware C corporation, otherwise your investor pool will shrink due to lack of exemptions.
3. Don’t give away too much equity; differentiate between founders and advisers.
4. Think of incorporating your venture, just like you would register a domain, set up your social media accounts, etc.

TIMELINE

• 01:15 – Overview of Capbase (company formation to ongoing management cap table, employee, etc. - contracts, payments, record keeping)
• 03:38 - Key things that make up solid footing: right company formation structure (Delaware C corporation), proper cap table, employee agreements 
• 08:45 - Mistakes founders make (e.g. incorporating as LLC/S and losing exemption you reduce tax burden, shrinking investor pool, giving away too much equity). 
• 10:37 - Delaware is popular due to familiar case laws and business friendly terms.
• 11:40 - Founder mistake stories (40% to five advisors as cofounders, board authorization)
• 15:35 - How much should a startup do early on? Think of next milestones. Also, ownership and control are never too early to think about.
• 17:23 - Takeaways (see above)