So you have a great idea, your working on your startup and you have have co-founders…But what is next? When do you start a business? And what type of business? This is a complicated, but very common question. We are going to share what several of our business mentors told us:
“WAIT AS LONG AS POSSIBLE”
They could not stress this enough. Before officially forming a business, it is a hobby. Probably an expensive time consuming hobby, but a hobby nonetheless. Starting a business makes it real and more complicated. Navigating the world of business law is not fun, and can divert serious resources (money and time) away from building your startup.
To avoid the issues of not officially owning a business, write a contract with your fellow co-founders. Divide up the shares, or percentage based on what each co-founder brings to the table.
Once you start raking in money, or customers, or in our case users, then form your company. Before this point it is generally not necessary however. Of course remember this is only our advice to you, do with it as you please and best of luck to you. Next time we will talk about LLCs vs Corporations.