Next Steps After Incorporating

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Now that TownSquared is an official corporation, I’ve had to go through all sorts of processes and forms to get things up and running.  I thought I’d share that process here in case others were curious.

First step is to get a tax ID from the IRS.  You do this with a SS-4 form, and it takes about 5 minutes to fill out.  With a tax ID number you’re able to open a bank account and start doing payroll and what not.

The next step is to choose a bank to bank with.  Silicon Valley Bank (SVB) is a pretty popular choice for startups because they don’t have any fees and they have a huge collection of services for both extremely small and extremely large companies.  I have heard of some startups banking with larger consumer banks, such as Citi, Chase, etc, but SVB seems to be the norm. From what I can tell, as long as you don’t get charged fees you’re good.  And of course, make sure whatever bank you choose will be able to support you as you grow.  For example, you’re not going to want the $5M from you series A to go into a checking account.

The founders also need to do 83(b) elections, which is basically a way to avoid getting taxed like crazy for the millions of shares you purchase for a very small amount of money.  Speaking of which, the founders need to write checks to the corporation to purchase their restricted stock that comes along with being a founder.

Lastly, something to be aware of, if you’re doing business in California (and probably other states, too), the founders will need to be paid minimum wage.  This usually doesn’t matter, but if founders don’t pay minimum wage and one of the founders gets asked to leave, they could technically sue the business because they didn’t get minimum wage.  From what I’ve heard litigation sucks.

What ends up happening is that founders will either not pay themselves and bank on the hope that they won’t get into a fight.  Or founders will give money to the company (via an official note) and pay themselves the California minimum wage.

Of course paying yourself means you’ll need to setup payroll, taxes, accounting, and all the other glorious things that I haven’t gotten around to yet.  I’ll write about them when I get there :).

The Evil Wolf and the Good Wolf

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My good friend Aaron shared a really neat parable with me that I wanted to share here.  It was originally found on Quora.

An old Cherokee is teaching his grandson about life. “A fight is going on inside me,” he said to the boy.

“It is a terrible fight and it is between two wolves. One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.”

He continued, “The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith. The same fight is going on inside you – and inside every other person, too.”

The grandson thought about it for a minute and then asked his grandfather, “Which wolf will win?”

The old Cherokee simply replied, “The one you feed.”

Another Year of Heli-Boarding

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I was fortunate enough to go heli-boarding with my dad for the fourth time last week in British Columbia.  Unlike most of the US, Canada has been getting dumped on, and every day we were up there we got snowed on.  This year may have trumped last year, which somehow seems impossible.  Anyway, they say pictures speak a thousand words, which means videos must speak millions of words.  Here’s the video from this year.  I’m reminded how much I love snowboarding and adrenaline sports in general.  Snowboarding inspires me just as doing a startup does.  (I’d suggest viewing the video on youtube in HD – for some reason I can’t embed the HD version.)

You need to a flashplayer enabled browser to view this YouTube video

Hard Times Open Our Hearts

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My last post was definitely the best one I’ve written, at least in my own opinion.  I feel like I related so well to many of you who I know read my blog.  And after thinking a little about why that seems to be the case, I realize it’s because I’m struggling just as much as many of you are.

Hard times open our hearts to others and let us be more compassionate and giving.  Sure, hard times are difficult and negative and dark.  But they bring us closer to those around us, to those of us that are struggling, too.

Keep Going

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This startup thing is an emotional roller coaster.  Some weeks are amazingly positive, with tons of product progress and great meetings.  And others are slower, with technical problems that won’t get better.  I wanted to share some inspirational thoughts I’ve had lately, in hopes that they’ll be useful to you, too.

Problems aren’t worth solving if they’re not challenging.  A startup that isn’t difficult to build will have lots of competitors, or won’t tackle big enough problems to change the world.  I’m in this to change the world, so for better or worse I’m tackling very challenging problems.

During those challenges, though, it’s so easy to doubt yourself.  To think you’re not capable of doing it.  To think you’re not good enough, or don’t have the right experience or skills to carry on, or that you’ll screw it up anyway.  Bull shit.  You can do anything you put your mind to.  You just need to keep going.  Never stop.  And don’t let anything, especially yourself, stop you.

The most challenging things we do are what make us who we are. They bring out our nervousness and negative emotions, such as self doubt, and tune us into who we are and who we will become.  They make us stronger, more durable, and they open our hearts to those who are suffering and in difficult times, too.

I expect most of you have at least one challenge going on right now.  Maybe you’re unsure about your ability to write good code.  Or maybe you’re scared you’re pursuing the wrong major.  Or maybe you’re moving to a new city without a job lined up.  Times are hard.  But it’s these times that we’ll look back at when we’re older and be proud of.

And be proud right now.  Be proud for having the courage to be where you are right now, to be facing the challenge in the first place.  You’ve already overcome so much.  Just keep going, damnit.  Keep going until you’re sitting on top of the mountain you just moved, looking down at how you’ve made (or will make) an impact in the world.  Because you will if you haven’t already.  You just have to keep going.

Startup Friends

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Eric and I have been working out of his living room, for a little over two months now.  For most of those two months, we’ve worked together, just the two of us, taking breaks to be with our friends and loved ones, and to do the things that keep us sane (cycling, snowboarding, writing, etc.).  However, the last two weeks have been much different.  We’ve started spending time with other friends founding companies, which has inspired both of us and made us feel more comfortable.

The loneliness struggle applies to anyone who is self employed, working in an isolated space.  It’s a challenging part of working for yourself, and not for a company.  And it’s weird for those of us that have worked at companies for all of our career.  We’re not used to being alone.

Eric and I need to continue to get out of our “office” and meet other people in the startup ecosystem.  This is somewhat challenging, though, because so many startup meetups are completely over the top and not worth going to.  But we both have friends in the startup world, and we need to reach out to them more often.  To share anecdotes, war stories, technology decisions, etc.

The same thing goes with any of you who are self employed.  Get out of your office and hang out with people.  It’ll inspire you and remind you why you quit your job in the first place.  Validation from other people can be part of that light at the end of the tunnel.

Don’t Let the Government Screw Up Yet Another Good Thing

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My apathy for politics has only grown stronger as I’ve grown older. Politicians are bought and almost entirely corrupt assholes with no other interest than themselves. I’ve remained apathetic, though, because their incompetence has never affected me. Until now. PIPA and SOPA are two bills that would ruin the Internet as we know it.

The Internet has remained largely untouched by the government, which is why we see so much growth and innovation in the tech industry. SOPA and PIPA would halter innovation and greatly inhibit people like me trying to create a business on the web.

Join me in protesting our idiot government by signing a petition to stop these bills. Or call your local senator or representative. Visit Wikipedia, Reddit, or Google today to learn more — they’re all running black outs to protest the bills.

Or learn more here. And sign the petition here. Don’t let our government screw up one more great thing.

The Cold Sprint

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I’ve written previously about the morning ride I do and the legendary sprint at the end. Today I’m posting another email that I sent to the list, commentating this morning’s sprint. I have a good time writing these things up, and hopefully those cyclists out there get a kick out of them, too :)

The sprint started very mellow this morning. We had a large pack making its way through the beginning of the Presidio, two abreast into the cold morning. I started shit talking early. Chris graciously offered a hearty effort. I retorted saying it was every man for himself. Silly, I realize, and also ironic. Read on.

Up the first bump the pace was mild. I know this because my out-of-shape ass was able to keep up. And even slower we went as we crested the first little climb, each rider waiting to see who would lead us to the finish.

Then, out of nowhere, Brian K, who’s probably in worse shape than me, made a jump. A jump only rivaled by Mark Renshaw. What a heart that young man has! (He’s my age.) Immediately the pack went from mellow to chaos. Riders were unsure about where they were, whose wheel they were on, and how they would fair when the final turn came. The whole thing was crazy, really. Robert told me later that he forgot his name. You could see fear in some eyes, opportunity in others. Eventually, though, the peloton would find some order. Brian, giving everything he had, would stay on the front until the second-to-last turn, with Jared on his wheel, Chris on Jared’s, I on Chris’, and the rest of the pack behind me.

With just one turn to go, Jared, exerting himself so much that he wasn’t even able to see his power output on his bike computer, had gapped Chris and me. But I waited, patiently and selfishly hoping that Chris would close the gap.

Around the last turn we went, and out of the saddle I jumped. I was already spent, but I smelled blood. The blood of Jared, who at this point was at least 5 bike lengths in front of me. I was determined to catch him before the speed bump as if my life depended on it. According to Strava I peaked at 34mph. But despite Chris’ mighty effort, I would fall short. Jared, having been on the front since the second-to-last turn, would take this morning’s victory. I closed the gap, yes, but not enough.

Congratulations, Jared. You deserve your victory. But those of us in your wake long for our opportunity at the crown[1]. Now if only Strava would unflag the damn thing …

Alex

[1] For the last three years I’ve screamed to Jay, “I’m coming for you!” on each climb, and I’ve still never caught him. So I could be 100% full of shit.

We’re Incorporated

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Eric and I received the news yesterday that TownSquared, Inc. is an official corporation of the state of Delaware. The news was very exciting for the two of us, though the reality is that not much has changed.

At the state we’re at, incorporating really just means a bunch of paperwork and a big lawyer expense. Eric and I are both friends and trust each other, so we’ve never had concerns about one of us screwing over the other. Incorporating makes things formal, with well defined equity splits, board seats, etc. Incorporating also lets us issue NDAs and other formal documents on behalf of the company, and lets us have an officially place for all the intellectual property we create.

Don’t get me wrong, I’m very excited we’re official. But being officially incorporated is kinda like being official with your girlfriend or boyfriend — nothing day-to-day really changes.

Pseudonyms vs. Identities

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Disqus, a popular blog comment management system, recently published some interesting research talking about the popularity of using one’s real name vs. a username or online handle (or pseudonym) when making comments to blogs. Here’s their conclusion:

The most important contributors to online communities are those using pseudonyms. In our data, they accounted for 61% of total comments! These contributors also comment more frequently — 6.5 times more frequently than anonymous commentors and 4.7 times more frequently than commentors using a real name (via Facebook).

I find it odd that Disqus, a comment platform, published this research without an ability to comment on it. Here’s my comment:

I’d like to know the demographic of blogs using Disqus. I expect that most Disqus-enabled blogs are tech-related, which makes for a very skewed demographic when it comes to comparing real names vs. handles on the internet.

My belief is that forcing real names creates a much more powerful online experience. Facebook is as popular as it is because I’m interacting with my real friends, with their real names. Online handles cheapen our identity because they let us be someone we aren’t. Speaking as an online persona isn’t the same as speaking as yourself — your accountability changes and the way you express yourself isn’t authentic.

Fewer people would comment on blogs if they had to provide their real name. But in general, for online conversation, real names are better for the reasons I’ve listed above. I value quality of discussion over quantity.