I wish I did this when setting up my startup

Sure, doing things a certain way would have made more sense in hindsight. But that's only because we see the end state and from the finish line, see the path that we could have taken from the start.

The finish line is on a hill that offers a nice clear view of the valley below. From the finish line, you can see that there is a rather straight path to the finish line that you could have taken. It doesn't lead through a swamp and a deadly forest like some of the other paths you could have taken (and the one you took, probably).

Back when you were at the starting line, though, you didn't even know where the finish line was (ie you didn't know you were starting your business for it to be acquired in the end), and several paths presented themselves to you. You couldn't tell then which of the eight (or however many) paths to take. Some of them lead into a forest where visibility of both the path ahead and the finish line is limited. And once you're on a path, you're set. There may be other forks in the road, but going back quickly becomes less of an option.

You'll reach something in the end, and it might be any of a number of possible destinations. So because you don't know the route and you don't even know the destination, it's impossible to tell which path to take or even what kind of shoes to wear. Those things you figure out along the way.

Sure, information on how to do corporate stuff should be more accessible to everyone, and things should be easier. But when you start out, you don't even know if you're going to need any of this, and if so, what setup you need.

Optimizing your corporate entities as the first step in your business is always going to be overoptimizing things. It's the kind of busywork that keeps you from actually working on your business. It's like stressing about a logo when you don't even have a product yet. I did some consulting work for a start up that set up a complete corporate intellectual property structure spanning multiple EU member states before it even wrote a line of code. Their product was just a commerce website, in a field that already had some big competitors, and there was no special secret Coca Cola recipe or anything like that. Just busywork that the (former lawyer) CEO liked to do more than working on the product.

There is a time and place for everything, and the time and place for corporate structuring is 'when you need it.' Often that will be when you reach certain income milestones where it makes more sense to keep the money in the company rather than having it as personal income. Or it can be when you hire your first actual employees, in order to organize your liabilities. And sometimes it's something you just do because your prospective office landlord only wants to rent to corporate entities.

I'm still trying to decided best practices for handling taxes. But, it's infinitely uninteresting so I'm just going to wing it and pay someone to figure it out last minute like usual.

C Corp? I always thought LLCs were the best way to go.

as they say "start with the end in mind"...

Great advice.

I think I shared this on IH before but I'll reshare it here. I really appreciate the experience relayed in this article on how 4 experts approached the acquisition process. A handful of experts explain the common types of startup acquisitions, and how you can position your startup for a sale.

Basically, if you're able to implement processes that prep your business for a sale from the get-go, you're setting it up for success. That's because generally what's good for a sale is good for the business's health.

Thanks for sharing. I love the structure your estate part. Indeed, you need to be really careful about what you are doing. But still there are lots of unexpected things happen, only people who have been through this knows.

Ankur is great. Love what he did with Teachable. Interesting points about taxes, but still they're way more complicated.

Great thread and his reason for sharing this is right on:

It's messed up that we don't teach anything about money to people.
The more this information is gatekept, the more we propagate existing systems.
The tax code is complicated af, and until we can change that, we should democratize access to information.

That GRAT hack is so smart. I gotta get my estate set up! 😅