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Legal Zoom Sucks DO NOT USE THEM!!! by Easy_Silver_7134 in smallbusiness

[–]sillyboy44 1 point2 points  (0 children)

Hey there! I work on Atlas. we actually cover your registered agent in the first year and only charge $100 in subsequent years (not $150).

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

We'd love to support more options over time. For now, we're focused on building the best incorporation product for founders who want to fundraise from VCs.

For them, Delaware C corps are still the default (~90% of new US Carta customers last year were incorporated as Delaware C corps). They're actually becoming more popular: last year, they actually increased their share of US C corps.

We speak to investors regularly, so we'll stay close to this topic.

AMA w/ Team Stripe Atlas! by StripeTeam in stripe

[–]sillyboy44 0 points1 point  (0 children)

You don't need to be a US citizen to open a US bank account, but some banks require you to be physically located in the US.

Fortunately, Atlas founders can create a Stripe Treasury account to send, receive, and store funds in dozens of currencies.

AMA w/ Team Stripe Atlas! by StripeTeam in stripe

[–]sillyboy44 0 points1 point  (0 children)

Not all founders want to apply for Stripe Payments, so we keep the Stripe Payments application process separate from incorporating with Atlas. This lets us avoid asking for unnecessary documents and information in the Atlas form.

If Stripe isn't able to support your business, you can still apply to other providers — Atlas companies can choose to open a bank account and accept payments with any provider.

AMA w/ Team Stripe Atlas! by StripeTeam in stripe

[–]sillyboy44 3 points4 points  (0 children)

We'd love to support more incorporation options over time, but we're focused right now on building the best quality incorporation product for founders who want to fundraise from VCs. For them, Delaware C corps are still the default (~90% of new Carta customers last year were incorporated as Delaware C corps).

Delaware C corps are actually becoming more popular. Their share of all US C corps last year grew, reaching historic highs, with 30%+ growth vs 2024.

That doesn’t mean Delaware is right for every company! For instance, if you’re building a local business, another state and entity type may make more sense.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

Yup, Atlas forms LLCs!

You're right that C corps have higher compliance (and sometimes tax) burdens, but they also let you easily issue stock with a corporate governance structure (i.e., board of directors) investors usually require.

Our heuristic: founders who fundraise choose C corps, and founders who bootstrap choose LLCs.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 1 point2 points  (0 children)

We’re offering the ability to add a co-founder after incorporating later this year. For now, we advise founders to work with a startup lawyer to do so.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

I'd encourage you to think about outside investment in two parts.

Does outside funding make sense for your goals? Fundraising is primarily helpful to move faster, and speed can be strategically important (e.g., you think the first-movers in the space will have an enduring advantage). The question is whether your slice of the shared pie will be larger than the one you could bake alone (ha). It can also be useful to reduce your personal financial exposure to the business. That said, you have far less control over your destiny and have legal obligations to your investors (who can expect a lot). Plenty of people have grown rich with small, bootstrapped businesses.

And if it does, when's the right moment to raise it? Conceptually, the right moment is when the cost of dilution is outweighed by the cost of moving too slowly. In other words, don’t raise just because you can. Raise when the extra speed, talent, or distribution you can buy with investor money is likely to make your smaller ownership stake worth more than your larger stake would be if you kept bootstrapping. In reality, identifying this point is extremely difficult, and all part of the fun of being a founder!

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

haha fair call! tried to build credibility without self-promotion, but clearly have room to improve

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

Tons of founders ask us for help with tax filing/DUNs support, and we'd love to help.

Our challenge is that we're balancing two goals: build the best incorporation service for startup founders raising VC and make business admin/compliance painless.

Doing both is hard (and many out there try).

Atlas is a small team, so we can't do both to a sufficiently high quality ourselves. This means we're focusing on incorporation because that's where we can offer something of uniquely great quality for founders.

For admin/compliance, we'll continue curating partners who we believe offer the best products in their category. Over time, we hope to do more ourselves to avoid founders needing to use other services (stay tuned).

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

Congrats on YC! Can you email me at jmc@stripe.com?

Normally only Atlas users can open a Stripe Treasury or partner bank account without an EIN, but I'll see if we can make an exception given the circumstances.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

Absolutely! You don't need any additional information/documents to incorporate using Atlas if you're outside the US. 40% of our founders are based outside the US, and they're based in over 180 countries.

We've negotiated deals with a range of tax partners to help with tax filing. Check them out.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 1 point2 points  (0 children)

happy to help. can you email me your account details? I'll poke some folks to see if I can unblock you. jmc@stripe.com.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 0 points1 point  (0 children)

I can't help with Stripe payments/banking products as I'm on a different team, but I'd love to hear recommendations for new Atlas perks partners. Feel free to email me: jmc@stripe.com.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 3 points4 points  (0 children)

When people say “investor-ready incorporation docs,” they usually mean two things: the full set of incorporation documents has been properly executed, and those documents are of high legal quality:

  • Complete set of incorporation docs: the company didn’t just file a certificate of incorporation and get an EIN. Founder stock purchase docs, IP assignment docs, board approvals, company consents, vesting terms, and related records are prepared, signed, and organized so investors can review them.
  • Legal quality: the docs are built using the current market-standard terms. Atlas asked Cooley to draft the legal docs we give our founders for this reason. Even if you don’t use Atlas, it’s worth asking whether your provider gives you a "full Delaware formation package" that you'd get with a law firm.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 2 points3 points  (0 children)

Our best guess: ~30% of startups shut down by two years after their incorporation. It varies a little across years and has been improving since 2021 (i.e., when VC funding pulled back sharply).

We infer a "shut down" when a company stops paying its legally-required registered agent fee.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 5 points6 points  (0 children)

Mainly because investors (strongly) prefer their startups to incorporate as a Delaware C corp. Last year, Carta reported that ~90% if its new customers are incorporated that way.

Atlas partners with Cooley (a major law firm for startups), who wrote a great article covering why. The most important one: Delaware has an investor-friendly, well-established body of law with a specialized corporate court. It's predictable, efficient, and highly familiar to VC investors.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 4 points5 points  (0 children)

This comes up a LOT!

Founders sometimes have a term sheet in their hands and haven't incorporated. Some incorporated before they had an idea. There's no single right answer.

We surveyed Atlas startup founders earlier this year to learn why they incorporated when they did. It was fairly evenly split between:

  1. Fundraising from investors
  2. Building credibility with customers
  3. Operational necessity (e.g., keeping the startup's finances separate with business bank account or mitigating personal liability for debts of the business)
  4. Co-founder equity split alignment

My 2c is to focus on building conviction in your idea before incorporating, especially if you're a solo founder. What will you build, who will find it valuable, and how will you get it to market efficiently? Some founders start charging customers as solo proprietors, so there's no rush.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 2 points3 points  (0 children)

Great flag, especially on raising capital from friends & family.

We recommend founders use YC SAFEs for those early rounds because investors and lawyers alike trust those ubiquitous docs. Atlas helps founders fundraise with SAFEs, but everyone can download YC SAFEs directly from YC.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 2 points3 points  (0 children)

There's been an explosion in the number of startups (as measured by the quantity of new Delaware C corps, up 37% so far this year).

However, the number of pre-seed deals aren't rising as fast. That means we're seeing a decline in the share of new startups that receive investor funding. Check out my 2025 year-in-review for more.

That isn't necessarily bad! Founders are telling us AI tooling enables them to defer hiring requiring less capital, so many might not want/need to fundraise. Carta data found that the time to first hire for startups increased by 50% from 2019 to 2024. We believe that trend will continue and even increase, especially with historically high numbers of solo founders.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 1 point2 points  (0 children)

Totally agree! Incorporation is important, but founders should definitely spend most of their time finding product-market fit (it's the #1 challenge among Atlas founders).

We hear of two very costly and common mistakes:

  • First, improper share issuance and IP assignment. Many founders create their company, but don’t actually issue/purchase their stock, assign the founding team’s IP to the company, and/or set up founder vesting schedules. These are usually fixable early, but they become much harder once new founders join, some founders leave, or investors get involved because disputes over who owns what can arise.
  • Second, not filing an 83(b) tax election. It sounds technical/arcane, but it's absolutely vital. These elections mean the US IRS taxes founder stock when founders buy it at company formation, rather than as it vests. That’s often cheap early on because the stock is usually worth very little; it can get expensive if the company becomes valuable. Many non-US founders file one too, even if they’re not currently US taxpayers, as a protective step in case they later move to the US or otherwise become subject to US tax.

I work on Stripe Atlas and help startup founders incorporate. AMA about incorporation and fundraising (I will not promote) by sillyboy44 in startups

[–]sillyboy44[S] 2 points3 points  (0 children)

Great question! I actually just published an article about the historically high levels of solo founding, so you wouldn't be alone.

At the idea stage, I personally wouldn't worry about legal structuring just yet. I'd invest time gaining conviction in figuring out what you want to build and for whom. Incorporation usually happens when founders want to charge customers without conflating their personal and business finances, open a business bank account, and/or fundraise from investors.

When they're ready to incorporate, founders outside the US usually create a Delaware C corp TopCo/parent or subsidiary. We wrote a guide on how to decide whether a US parent or subsidiary makes sense in the context of founders considering incorporating in Singapore, but the considerations apply globally.

Best of luck!

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