back home
Thousands of startups have started over the past decade, and there are plenty of startups claiming to abstract away your ops for you as a service, but nothing is there to help you Day 0. And you are asked for X or Y before using these services. There is an app for everything within startup operations, but while looking for help online and across startup communities, I couldn’t find a simple list that just told me what I needed, when, and why.
This is not legal or tax advice. Please consult a professional. I will also try to keep this document updated — after the first draft in 2021 —but if something seems outdated, please hit me up @_o_s_a_m_a. I am also not paid to endorse any of the following services. This post assumes you want to primarily operate from North America. It further believes that if you are a web3 startup, you don’t have tokenomics defined on Day 1.
You will be surprised how simple some of this is, but every founder spends countless hours researching or asking friends. So, here I gather a complete list of services that will help you get your venture-backed startup off the ground:
Once serious about company formation and fundraising, you should connect with outside Counsel. Many firms specialize in company formation and general matters of a startup business. They have creative payment terms that allow you to defer payment until you have completed the fundraising.
We worked with and strongly recommend Goodwin. Coincidentally, they have been Counsel to previous startups associated with them and have some of the best crypto lawyers on board. Gunderson and Fenwick are also well-reputed firms that work with many startups. We have not worked with them and are unaware of their crypto/web3 bench strength. Goodwin had everything we needed.
Another firm offered a friend to provide legal services in exchange for early equity. Do your research; giving equity to professional service providers doesn’t make sense for most startups. Most firms who work closely with startups defer their fee until the close of raise.
Before fundraising — or accepting term sheets — it is suggested you incorporate. Lawyers will tell you this will help you reduce personal liability; I am not an expert and believe those who are.
Incorporation helps solidify things between cofounders and accept investments. This YC post has some good insights about equity splits and vesting periods. tl;dr — split equity equally amongst all founders, and everyone should vest towards a 1-year cliff and X-year period.
You need to register a C-Corp — ideally a Delaware C-Corp. Then, assuming at least one of the cofounders is based out of the US, you can easily incorporate a Delaware C-Corp using Clerky.
We went for the Company’s Lifetime Package and did not regret it. The document set included in this package is most helpful in the early days.
Stripe Atlas has made tons of progress over the past two years and is a one-for-one alternative for Clerky.
SVB had been the go-to for many years, but Bank Mercury has taken its place. Once you have registered your C-Corp, registering an account with Bank Mercury is a breeze. As soon as your account is ready, you can send money to purchase the initial stock in your startup. So now you are prepared to accept monies. In an era of bank runs and distrust around asset custody, having more than one bank is generally recommended. Chase is a great backup.
It is now prevalent in crypto to have many community members back projects. With check sizes going as small as $1000, managing SAFE and later cap table can get hectic, so a common practice is to aggregate all the smaller checks into a Roll-up Vehicle (RUV). We used Angelist, which works like a charm. Even the investors appreciated how easy AL made it for them. If you are raising with a Token Warrant alongside SAFE, you should work with the AL team to update their legal docs before closing.
Unless you have a physical office in the works, you may need a virtual address for your business. Something to receive mail, mention on legal documents, etc. Two primary services enable you to get a business address across the US:
The two service providers seemed indistinguishable, so we proceeded with Stable.
Being venture-backed, you must manage your startup’s capitalization table. The cap table tracks who owns what, including employee stock option pools. Overtime products within this space have added helpful financial modeling of funding rounds. Carta is the better-known solution here but has unclear pricing, slow response times, and seems too full-featured (confusing?) for early-stage companies. We liked and went ahead with Pulley.
Bank Mercury helps manage capital, and several SaaS discussed below help manage various aspects of financial operations, but eventually, everything needs to be recorded, balanced out, and consolidated under accounting books. Quickbooks is an excellent solution for this. Getting the software is only half the solution. You need to set up the chart of accounts and ensure that all the SaaS integrations are recording transactions under the correct accounts. Good hygiene around the books is essential for reporting and future fundraises. Most startups don’t start with a CPA on the founding team who can act as CFO. You will need a bookkeeper. There are multiple ways to approach this:
Gusto gets the job done without drama. There are other solutions, but Gusto has been proven to get the job done across the US, so why even look around? Yes, we use Gusto for our team spread across the US. It integrates well with Quickbooks.
You must pay for things as you operate: lunches, SaaS, hardware, air tickets, and more. Ramp is the most comprehensive solution currently. It integrates well with Quickbooks, makes expense submission and bill payments a breeze, and lets you efficiently manage multiple credit cards across the organization. I couldn’t find anything else which was feature-complete.
You should keep your phone numbers private or have phone numbers across various geographies. OpenPhone is an excellent solution for business phones.
The US and Canada are closely linked. There is tons of great talent across Canada. I would argue that Canada is the North American crypto hub — you don’t know fren.
Usually, you can hire Canadians as contractors if you are a US-based team/entity. You should be able to award them stock options as well. I identified two services but have not used them for this — Deel and Terminal. They become the employer on record on your behalf; this might be Canada’s most efficient hiring solution.
I am a Canadian founder of a US entity. Company executives cannot pay themselves as contractors. So, we created a wholly-owned Canadian entity with a local bank account. The cost of setting this up should be less than US$5k and take, at most, a few weeks. It is not as scary as it might sound if you have the right lawyers on both the US and Canadian sides and an accountant who can work across the US and Canada. We worked with Goodwin (US), Osler (Canada) and our CPA mentioned earlier — who was very aware of this process/setup.
Having a Canadian entity helps process payroll/taxes locally. We are banking with BMO and using WagePoint for payroll processing. The financials of this entity roll up to the Delaware C-corp.
In the long run, there are various benefits to having a Canadian entity, including bringing talent from outside North America to US time zones.
Canadian entity as a subsidiary to the US entity also doesn’t impact your fundraising in any way b/c the investors are still investing into the Delaware c-corp — a process which they are familiar with and have all paperwork in place to keep transactions efficient and costs low.
If you don’t want/need to operate out of Delaware and instead register a company in Canada, Ownr gets the job done. Registering a provincial corporation makes the most sense for most companies, and Ownr makes it easy. Being an RBC venture arm company, they integrate well and set you up for RBC business banking with some free credits. UPS Canada offers business mailboxes that come with a street address. Unlike Stable/EarthMail, UPS doesn’t scan and forward your mail; you must periodically check your mailbox.
Now go do what matters, BUILD!