Incorporating in Delaware for Funding Success

TLDR; The speaker incorporated a company in Delaware to attract investors and simplify the legal process. They explain the decision-making process and the steps involved in the incorporation.

💸 Raising Capital

The speaker initially announced raising almost $200,000 for a router project, but later corrected it to $300,000 after receiving an unexpected email from a potential investor in the UK.

The investor expressed interest in investing £100,000 Sterling into the project and eventually visited Slovenia for a meeting, leading to the successful signing of a safe agreement.

This unexpected turn of events prompted the speaker to address the reasons for incorporating the company in Delaware and the importance of attracting investors for funding.

🌍 Incorporating in Delaware

The speaker, based in Slovenia, chose to incorporate the company in Delaware, USA, for several reasons, not just for tax purposes.

Incorporating in Delaware was seen as advantageous due to its simplified and less strict conditions compared to the European Union, making it easier to set up the company.

The speaker clarified that incorporating in Delaware was best for the business, and it was not solely due to favorable taxes.

📝 Company Formation

The process of incorporating the company involved several steps such as deciding on the company name, choosing a registered agent, and determining the amount of shares and their par value.

Additional steps included applying for the Employer Identification Number (EIN) and filing the Section 83(b) election for the stocks, highlighting the complexities and legal requirements of the process.

The formation documents, including the shareholders agreement, were explained in detail, emphasizing their legal significance and the protection they offer to the founders.

💼 Accountants and Section 83(b) election

The involvement of an accountant was crucial for the day-to-day operations of the company, and they were responsible for filing the Section 83(b) election for the stocks.

The importance of this election was highlighted, as it determined the timing of taxation for the stocks, emphasizing the financial and legal implications for the shareholders.

The speaker emphasized the necessity of timely filing of this election and shared the challenges encountered during the process.

⏳ Timeline and Costs

The entire incorporation process took approximately 3 months, costing around $7,000.

The speaker also highlighted the importance of having certain aspects prepared in advance to expedite the process.

They emphasized the significance of proper preparation and dedication required for successful fundraising and incorporation, acknowledging the time and effort invested in the project.

The speaker shared how the involvement of multiple parties and the timing of the process impacted the overall timeline and costs.

🚀 Next Steps

With the company now properly incorporated in Delaware, the speaker expressed their excitement to focus on developing the high-end router for their project, with the goal of sharing the journey on YouTube.

They outlined their plans to have the first prototypes ready by early last quarter of 2024, highlighting their commitment to the project's long-term success and their dedication to sharing the journey with the audience.