In a startup with a globally-spread remote team, does it still make sense to incorporate in U.S./Delaware vs. somewhere overseas?

An agency is an instant cashflow model business. Ugly to scale due to logistics of a team and the mess of being in a client-service business model. But easy to rapidly monetize. Make a phone call. Close a client. Collect the cash. (Yes, that's a bit over simplified). Your girlfriend shouldn't grab a dime from anyone before locking in her first client. An agency can be entirely self-funded and there's little reason to pursue funding. After she had generated her first $50,000 in clients (for example), she can supplement growth with debt financing. And, in no way, is the idea of your generous, retiring parents investing $70,000 into a first time business owner, when statistically most businesses fail ... a good idea. Fair rate is a flexible concept. If I was lending out $70k, I'd want to see 3x $210k back as a minimum. Irregardless of whether that is "fair"... it would be the minimum (for illustrative purposes) where the process of the due diligence and contracts and parting with $70k liquid in trade for a "maybe" $140k gain would be of interest.

It depends :) Financing: When you're ready to start raising funds, C Corps (especially Delaware) are still preferred in the VC world although some angels are increasingly willing to invest in LLCs. Risk: When you're just starting off it's okay to have a holding LLC with DBAs. As you grow one or more of the ideas, you may want to separate out the risk so that if one company has issues it doesn't hurt the others. But it isn't necessary when you're early on. Once you add employees, cofounders, and/or investors, it's probably time. Your holding LLC could have equity in the idea and you could setup the idea as a C Corp. It's a good structure. Also -- this ain't legal advice. Just general blahblahblah about legal structure. Really good article from a fellow Seattle startup attorney here: http://www.startuplawblog.com/choice-of-entity/

You’re asking some great questions, and beyond the fact that there is no teacher as great as experience, it seems tragic how common this experience is, and making great investments is hard even for seasoned professionals. But it’s incredible how often the only two factors used to assess an investment are how much it will make, and how much they like (or know) the people running the deal, when just a few additional questions can often make all the difference. When looking at a new opportunity, the first thing I do is ask if I believe management’s story. This is really about getting a feel for whether you believe the people running the business or opportunity are qualified to exploit whatever inefficiency they have identified in the marketplace. If they can’t express in simple terms what that opportunity is, why they’re qualified to take advantage of it, and exactly how what they do will generate returns for the investor – run away. This is different than asking if I believe in the management, or like them – it’s about their ability to state in plain language their investment thesis, and back it up with the skills and tools needed to execute. Next, put it in context - consider the size of the opportunity and this investment’s place in it. Is it a big market, or small? Lots of competition or not? Does this investment bring something new to the space and will gains come from new business or is the plan to take it from existing competitors? If there are no crisp answers to these sizing questions, consider it a big red flag. The next bit is about understanding the risk of the investment. The single most common mistake made by investors is mis-pricing risk. Markets are pretty efficient, so there has to be a reason someone else isn’t already doing whatever this investment proposes to do and understanding what this dynamic is can be the single difference between good and bad investments. It may be that nobody has thought of it, or no one can do what this will do at the same low cost. Or there is an asymmetry of information, where you know something others in the market don’t yet know. Whatever it is, trying to understand the risk of the investment is key: understanding the timing of the probable returns, appreciating what could go wrong and how management will respond if it does, what change in the environment (like new laws, new competitors, new technology) could turn the deal on its head, and what assumptions need to remain true through the course of the investment. I’m not sure there is any way to get all of the right before making an investment, and surprises always happen, but the more work done to figure this part out can help determine whether the investment is worth making based on what its expected to return, and it often highlights something just plainly wrong with an investment. Finally, know that there are very few great investment opportunities relative to the number of absolute junk stories out there, and finding ones that make sense for your risk tolerance and timeline just takes work. And experience. And even when you get everything right, sometimes good investments still go bad.

There shouldn't be any tax consequences for the founders if you've made 83b elections--the election meant you paid tax already on the full value of the stock at the time of the election (presumably zero) even though it was subject to future forfeiture. If you sell newly-issued stock there should be no tax impact. If you sell your own common stock, you'd pay tax on the gain, but I doubt that is what you mean here. Of course, you should not take the free advice dispensed on Clarity and consult your own tax preparer--this is not tax advice.

NIcole is right. When I first started my business I thought I was saving money by doing my own bookkeeping. It took me much longer than it would take a bookkeeper - all time that I was not spending on marketing or billable activities. And in the end I made errors which made the initial work of the bookkeeper longer. I now have a consistent routine. My bookkeeper picks up all my material monthly and does my books in less than 2 hours. Very worthwhile.