Why getting it right from day one matters
Incorporating a startup seems simple: choose a name, sign some papers and you are done. But decisions made in the first few months can cost you millions later.
At Lexgo, we have advised more than 150 startups on incorporation. These are the 5 mistakes we see repeatedly.
1. Choosing the wrong jurisdiction
Not all jurisdictions are alike. If you plan to raise capital from US venture capital firms, you need a Delaware C-Corp.
2. Failing to establish vesting from the outset
40% of disputes between co-founders stem from the absence of a vesting agreement.
3. Using generic templates
Generic articles of incorporation do not address startups' particular needs.
4. Ignoring intellectual property
Make sure all IP is assigned to the company.
5. Failing to plan a multi-jurisdictional structure
If you operate in more than one country, you need a holding company structure from the outset.