INCORPORATING A COMPANY IN THE US
A 30-part operational, legal, tax, and governance playbook for building a venture-backed US startup from pre-formation through Series A readiness, with a focus on avoiding the execution mistakes that commonly damage companies during diligence and scaling.
Foundations
The choice of entity, state of incorporation, number of authorized shares, par value, initial cap table, and founder vesting structure are not administrative details. They are structural decisions that determine how much tax you pay on exit, whether you qualify for a $10 million capital gains exclusion, .........
Entity Deep Dive
A C-Corporation is a legal creature built for scale. It exists as a taxpayer in its own right, entirely separate from its owners. It owns its own assets, signs its own contracts, incurs its own liabilities, pays its own taxes, and β critically.........
QSBS and Section 1202
Section 1202 of the Internal Revenue Code is the single most valuable tax provision available to founders of venture-backed technology startups. Enacted in 1993 and substantially expanded in 2010, it allows a non-corporate shareholder....
Entity Deep Dive
Parts 2 and 3 made the structural case for the Delaware C-Corporation as the default entity choice for Bay Area tech startups pursuing venture capital. That case is strong........
LLC to C-Corp Conversion
Part 4 made the case that Bay Area tech startups should incorporate as Delaware C-Corporations from day one. Most founders who read Part 4 agree. Many of those same....
State Selection
Every US corporation is formed under the laws of a specific state. That state's corporate law governs the internal affairs of the corporation β the relationship among shareholders......
Authorized Shares, Par Value
When you incorporate in Delaware, the Certificate of Incorporation specifies the number of shares the corporation is authorized to issue. Authorized shares are not issued shares. ......
Filing Mechanics
Parts 1 through 7 have walked through the structural decisions that shape a new Bay Area tech startup: why incorporate, when, where, what entity type, what the capital structure should look like. Part 8 turns those decisions into artifacts β actual signed........
Federal Tax IDs
The Employer Identification Number (EIN) is a nine-digit federal tax identification number issued by the Internal Revenue Service to business entities. Every US corporation needs one..........
Opening a Business Bank Account
For decades, Bay Area startup banking was a solved problem. Nearly every venture-backed tech startup had an account at Silicon Valley Bank, and that account handled the entire relationship β checking.......
Founders’ Equity, Vesting
This part is different from the others. Every other topic in this masterclass has some flexibility in timing β you can incorporate a few weeks later, register for sales tax a month later......
Equity Compensation
Every Bay Area tech startup grants equity to employees. The mechanics of those grants β what type of equity, how much, at what price, subject to what vesting........
SAFEs, Convertible Notes
Pricing a company is hard at the earliest stages. A pre-product, pre-revenue startup has few data points on which to base a valuation. Trying to agree on a precise valuation between founders and angel investors can consume weeks of negotiation and legal...
Intellectual Property Assignment
Every tech startup's value is primarily intellectual property. The code, algorithms, product designs, trademarks, trade secrets, data assets, and brand identity collectively constitute the company's competitive position......
Foreign Corporations
A Bay Area startup typically incorporates in Delaware (Part 2) and physically operates in California. This creates a specific legal situation: the corporation is a Delaware entity under Delaware law, but........
Economic Nexus
Before June 2018, the rule for state sales tax collection was set by a 1992 Supreme Court decision called Quill Corp. v. North Dakota. Under Quill, a state could require a seller to collect sales tax on sales......
Sales and Use Tax
Part 16 covered the conceptual framework for state sales tax: economic nexus, Wayfair, state-by-state thresholds, and the decision of when to register. Part 17 covers the operational reality that follows.......
Digital Goods, SaaS
Parts 16 and 17 covered nexus (when a state has the right to impose sales tax obligations) and the operational mechanics of collection, filing, and remittance. But nexus and operations assume that the question of whether.......
Federal Tax Calendar
Every Delaware C-Corporation is a federal tax filer. The federal obligations begin the moment the corporation is formed and continue for the corporation's entire existence...
Employment Tax, Payroll
Every Bay Area startup with employees becomes a tax collector on behalf of federal and state governments. The corporation withholds a portion of every paycheck for federal income tax, Social Security, Medicare, and (usually) state income ..
State and Local Tax
A growing Bay Area startup faces 40 to 80 specific compliance obligations each year, scattered across federal, state, and local jurisdictions. Each obligation has a specific deadline, a specific form........
Employment Setup
Part 20 covered payroll mechanics and employee vs. contractor classification. Part 22 covers the broader employment infrastructure that wraps around payroll: the offer letter, the PIIA,......
Governance, Corporate Hygiene
Parts 1 through 22 covered the operational mechanics of a Bay Area Delaware C-corporation β incorporation, equity, IP, multi-state compliance, tax, employment. Part 23 now addresses the governance......
Insurance Stack:
Insurance is the silent infrastructure of a well-run Bay Area tech startup. Most founders don't think about it until an investor asks, an event triggers a claim, or a contract counterparty requires a certificate........
Securities Law Basics
Every time a Bay Area startup issues stock, a SAFE, a convertible note, or an option grant, it is issuing a security. Securities in the United States are regulated under the Securities Act of 1933 and the Securities Exchange Act of 1934....
R&D; Tax Credit, Section 174
Most Bay Area tech startups spend the majority of their cash on engineering salaries. The code that engineers write, the algorithms they develop, the products they build β this work is research and development......
International Tax Basics:
International tax often arrives before Bay Area founders expect it. The moment a US startup hires a contractor in India to build the front-end, pays a European service provider for marketing work, ....
PEOs, 401(k), Discrimination Testing,
Employee benefits infrastructure β payroll, health insurance, retirement plans, workers' compensation, unemployment insurance, HR compliance β is the operational plumbing that runs underneath.......
The Vendor and Advisor Stack:
A Bay Area tech startup's internal team β founders, engineers, sales, customer success, operations β is what produces the product and revenue. The external team β lawyers, accountants, bankers......
The 12-Month Integrated Roadmap
Parts 1 through 29 have covered the operational, legal, tax, and financial infrastructure required to form and run a Bay Area tech startup. Each part stands alone; collectively they describe a coherent operating model.....