“If you are in USA, please start the process 4 weeks in advance to get your merchant account and if you are elsewhere, expect the process to take anywhere between 2 to 4 months”.
Before the days of Stripe, I remember writing this in 2011, as a prerequisite in our help documentation.
Without a service like AWS, you can’t imagine two guys sitting out of an apartment, building a service and competing with highly funded companies from any part of the world!
Just like AWS, the emergence of Stripe has played a huge role in creating a level playing field and a delight to work with. You can get started in hours instead of days. The sandbox is stable, and works as consistently as production. The REST API is a pleasure to work with. They abstracted the complexity required to get a payment gateway account with online workflows. You can go on & on.
In short, Stripe gets developers.
It’s an engineer’s approach to cracking tough problems, that looks naive for any outsider to start with and then looks like a genius idea in hindsight.
Stripe Atlas is a great initiative. I read about Patrick McKenzie (patio11, on HackerNews) joining Stripe Atlas team, which is fantastic. (Congratulations, Patrick).
Stripe Atlas is the service launched by Stripe, to assist founders to easily setup Internet companies, as a C-Corp Delaware entity, from anywhere in the globe. This service includes a network of services including AWS, Silicon Valley Bank account, PWC etc.,
As an international founder, operating a C-Corp Delaware company and one more legal entity in my home country, I wanted to share my experiences.
In the past 2 weeks I came across 3 different founders.
One is at idea stage. Another one building the product. And another one ready to launch and monetize.
All of them got into Stripe Atlas and have setup C-Corp Delaware. One of them had already incorporated a C-Corp and then got into Stripe Atlas and then incorporated again because it was easier to get SVB bank account via this program.
He is considering merging them or shutting down previous one! Talk about overheads, at such an early stage.
In this context, I wanted to share my insights for early stage founders, who are considering using Stripe Atlas.
Do not incorporate at the idea stage.
I repeat, DO NOT INCORPORATE without having a service that is ready to launch.
Do not incorporate for inspiration. Lot of folks make this mistake, thinking this gets the ball rolling.
There are a bunch of justifications I have heard in the past to setup US company.
I want to incorporate because:
Besides, if you decide to incorporate in USA, it only takes a few weeks to get this rolling at any point.
Now Stripe is available in so many countries in Asia, Europe, Australia and Latin America. Braintree is available in even more countries. Together we support customers in about 45 countries.
Unless you have a really crappy situation with respect to payment processing, regulations etc., that are real roadblocks for competing internationally, I do not recommend setting up company for the romanticised notion of using a particular gateway.
In India, lots of Founders complain about payment regulation and inability to collect recurring payments domestically and internationally as the number one reason holding them back.
How many visitors do you have on your website?
How many trials? How many trial-to-paid conversions?
And then are conversions dropping off at the last point because you are redirecting them to a bad checkout page?
If that’s really happening, you can incorporate with Stripe Atlas and fix the problem in a matter of weeks.
Even without any activity the actual cost of operating companies in multiple countries is anywhere between $2k to $5k USD.
Apart from this, you need to spare your mindshare to read about the compliance requirements, legal structures, hiring more folks to manage these etc., This is huge.
I wish Stripe Atlas to become a grand success. I really do.
After all, our startup, Chargebee, has benefited a lot because of Stripe. We were able to onboard customers same day, only after Stripe brought this to market.
The world is crying for services like Stripe & Stripe Atlas to simplify the unnecessarily complicated paper work and barriers, that needs to be broken down.
But as an entrepreneur, you have a fiduciary responsibility and an obligation to your fellow founders and investors, to do the right thing.
Before you get too excited and follow what everyone else is doing, think if incorporating in Delaware as C-Corp is the right thing for you, at this stage of your startup. And then do it.
Counterpoint to consider Singapore for incorporation.
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