Ownership for International Entrepreneurs
Angie: Hey everybody! Welcome, welcome back! Hey Peter! There you are…
Peter: Alright, Hi Angie
Angie: Welcome. So we’ll give everybody another 20 seconds or so and then we’ll do it. Oh, Peter, you’re kind of freezing up a little bit. Maybe there’s a better place with a little extra…Oh outdoors in Nashville, I love it.
Peter: Yeah…Alright hopefully that’s better.
Angie: Yes, I can definitely hear your voice. It’s still a little pixelated but; it’s alright, we’ll do it. Alright so, it’s 10:01 a.m. Let’s get started.
Welcome everybody to the E2 visa series, today our topic is a little bit different, and we have a guest! So, we’re going to be talking about international entrepreneurs and how to start a business in the United States. I have Peter Swan with me from Gust Launch. So, Peter, I want to introduce you with a proper introduction, give me one second. So, Gust Launches the best way to incorporate and manage your startup from formation through Series A. Gust Launch helps you manage your cap table contract and fund raising based on best practices developed by experienced founders and lawyers so you can focus your product without sacrificing the back office. Did I get that correct, Peter?
Peter: Awesome, you nailed it!
Angie: I just… like, I don’t know it just kind of came at me like a bolt of lightning and I just did it. So, I got lucky, and I did it the right way. So, Peter is the CEO and Gust Launch and, I wanna just start really quickly, so we talked about Series A and cap table, those types of things. Which obviously we want to get into but, just for the casual – or not casual – but for the small investor or the small entrepreneur who wants to start maybe a coffee shop or something like that, you can also help them as well, right?
Peter: Yeah. We are absolutely geared towards founders who want to either mobilize their equity to incentivize employees or to leverage for investment. So, often these days you will see more traditional businesses using those models. And if you intend to, we are a great spot and we can also provide information about the different routes to take if you are a more traditional brick and mortar business that doesn’t intend to leverage equity.
Angie: Wonderful, and so, let’s talk about that for a little bit, and then I wanna get into some of the more kind-of fun and exciting and exotic things you guys do. For somebody who maybe is… let’s just say from Canada or the UK, Australia, Mexico, wherever, and they do want to open a small… like a coffee shop or something like that. That’s the goal, they want to either incorporate or they wanna have an LLC, you can assist kind of just with that, getting those documents together as well, right?
Peter: Yeah, so, we actually work primarily with Delaware C Corps because that is kind of the gold standard for any business that is going to take outside money from investors or trying to mobilize equity to incentivize employees. The reason that is, is because Delaware has a huge body of corporate law and they have a huge body of cases that have actually been litigated. So, anybody who’s actually dealing with the company likes to understand how the law will be applied. So, Delaware is kind-of a big deal there.
However, if you were coming in and you were looking to start a small business in a particular location, it will often make more sense to form an LLC in that state and then we have a bunch of documentation and all kinds of information about how to make that decision. But, if your goal is like one coffee shop in location X, it often makes sense to consider an LLC or a sole proprietorship there. And typically what you want to do, is just take a look at the Secretary of State’s website in that state and look for a registered agent service. There are a bunch of them that specialize in kind of helping getting small businesses set up, one that comes to mind is called Northwest Registered Agent. They’re technology forward, they have a lot of good information on line, and it’s not one of those ones where you really, really have to dig. And then, just get on a sales call, you can get a lot of information up-front and understand exactly how the services are positioned.
Angie: Wonderful. So, let’s talk about somebody who does want to incorporate in Delaware. I guess… walk us through. What would you need for somebody… I guess, first of all, is your whole service kind of online? People are able to do it themselves? You do it for them? How does it work, exactly?
Peter: Yeah, so we are intended to be an educational self-service platform. So, we can help you determine whether Delaware is the right place for you. If it is, we try to streamline everything. You can do it all online. You don’t have to be physically located in the U.S. to do it, and we will walk you through kind of what all the best practices are.
Typically, what happens is you will come in and you will file what’s called a certificate of incorporation in Delaware that will outline kind of how many shares your company has, and the very basics of how it will be formed. You’ll then go through, and we will walk you through setting up your board of directors, which is kind of the next level of control, on kind of a month-to-month basis and then electing your officers, which will be your treasurer, secretary and president in Delaware. And each of those has day-to-day responsibilities on running your business.
Once we get that set up, we will adopt your bylaws, which go into way more information about how your business actually runs. They are dry and standardized; but, as a person who didn’t come from a business bound background, reading the bylaws was actually a really interesting exercise for me. And if you’re going to go through and do this, I highly suggest you actually read them, because as the person starting the business you have to wear a lot of hats, right? Like you are not always going to be operating as the person on the ground. During the day-to-day work you have to step back and look at it as a board member might or as a shareholder might. And your bylaws actually give you a really good outline of what the cadence of that should be, like when you should be switching hats and reminding you that every year you should be thinking about your business at the highest level from a revenue trajectory standpoint. You can’t just be mired in the day-to-day so, read your bylaws even if they’re really boring. Ours are designed to be human readable and not mired in complete legalese so, I definitely suggest that.
Once we get those set up, we walk you through actually issuing shares in your company. That is what establishes your shareholders and your actual ownership, the people who own shares in your company have rights on directing how the company goes, who it hires, who it fires, who’s on the board, all of that. And then, your bylaws set it up so that the majority of those responsibilities are delegated to the people running the company on the day-to-day basis; but then, the board and shareholders have regimented times where they get to check in and say actually no, we should try something else. So, we walk you through all that initial corporate setup and those are kind of the nuts and bolts to getting actually formed in Delaware.
Angie: That’s fantastic so, there’re a couple of things that you touched on and these are questions that I get all of the time. If we incorporate in Delaware do we have to live in Delaware? Do we have to work in Delaware?
Peter: Yeah, so that was a really interesting thing to tackle when I started learning about this too. So, to incorporate in Delaware you do not have to live in Delaware, you don’t have to work in Delaware. Typically, what you will do, and our service includes this, is you will have what’s called a registered agent in Delaware. Your registered agent will maintain an address in Delaware, and they will not be your general mailing address for your company; but, they will be the mailing address and the address at which anybody who needs to reach you for official communication, like the state or anybody trying to serve you through legal process. That will be the nexus for you in that state. Typically what happens with foreign founders is they may keep a virtual address out of state or in Delaware or they may just choose to actually be domiciled outside of the United states.
Angie: Great. So, that’s really important because I get that question a lot, about that. Again, another important thing that you said is do you need to be physically present in the United States to start the process of incorporation or getting an LLC?
Peter: No, typically you do not. In most states you can file these things online. If you are… obviously if you’re going to [inaudible]; likely, you are going to be physically present at some point. But, if you are going to do some sort of online business, typically you don’t have to be physically present. You will want to look… You know, if Delaware doesn’t make sense you will want to look and make sure that you are incorporating or forming your LLC in a technology-forward state. If you go to the Secretary of State’s website for a specific state, it is generally pretty obvious if you can file forms online. They will most likely let you know but, for many states and an increasing number, you can file your initial forms online, you can file your yearly registration requirements online, and you can do it all without actually being physically located here.
Angie: Yes, which is great, because a lot of my clients and some of yours as well, right? They are actually while they’re doing this part of the process, even if the plan is to come later, for this part of the process (especially during Covid-19) it’s very difficult to travel. People are stuck, whatever, so, that’s really good to know, that a lot of this you can do without ever being… well, without being in the United States at least at this time and certainly without being in Delaware. So, that’s really a plus, and I really like the fact that you guys have tons of information and also help but, you can do it yourself right?
Peter: Yeah. It is designed to be self-service. We tried to give you all the information you need to understand what you’re doing; and you know, we do augment that with chat support with the pretty quick turn around from the [inaudible] standpoint and some additional resources. And you know, if you do have needs to escalate beyond what we can kind of walk you through, we do have a network of partners like Angie to supplement for visa advice or intellectual property advice or things like that.
Angie: Oh that’s wonderful too. Sometimes the intellectual property thing… that’s really, I will say even as a U.S. attorney, I do not do intellectual property because that’s a wild area. So, it’s really good to have some sort of guide through that part because it’s not very intuitive, it’s kind of weird, it’s like a whole thing so, that’s great.
Peter: Yeah, absolutely.
Angie: So, let me ask you this Perter, for the folks who come to you, who are from other countries even if they’re living in the U.S. but they’re not U.S. citizens or green card holders here, there may be students or maybe they’re here working another job but they want to start their own thing or whatever. What are some of the top questions that you guys get and how do you handle those?
Peter: I would say some of the top ones we get our around folks who have a work visa or a student visa who are looking to start companies, and really the majority of questions we get along those lines, is making sure that they don’t violate either their employment agreement or their visa terms. So, typically for H1B is we get a lot of questions about whether or not somebody can actually start a company and whether or not somebody can actually participate in the company. And for student visas we get similar things like, ok am I allowed to actually be running a company while I’m supposed to be studying full-time?
Angie: Right. Interesting. So, the answer to those are: It really depends a lot on your school, right? So, that’s kind of that… yeah, you probably get that a lot. Interesting. So, tell me now… so we talked about some of the basics, right? Just incorporating in Delaware, which anyone could, you know, you wanna run a flower shop in Illinois, you want to start a car wash in Arizona, you can still incorporate in Delaware and do those things and have no physical presence in Delaware whatsoever.
What about someone and kind of going back to that the beginning. Someone whose plan is… and these may not be the best plans for E2 visas in particular; however, there are ways around them. But, for people who think: You know what, I’m starting something small now, but I’ve got really big dreams that I’m hoping in 18 months, 24 months, we’re gonna have investors. We’re going to… and that’s kind of where they’re starting right? Not from the kind of: Hey I’m gonna open a flower shop but, the I’ve got the American dream, right? I am gonna make tons of money, I wanna do this thing, I’ve got this great idea… What’s kind of the process or how could someone use Gust Launch to kind of help them through that process? Because that’s a lot more complicated than just trying to incorporate in Delaware.
Peter: Yeah, so, once you actually get started with Delaware we do support some other additional documentation that is working toward taking in the earliest investment. And we do have a whole other arm of our platform where we do provide additional education around understanding what the typical like equity or venture funding process looks like. So, will help you understand kind of the level of traction you’ll need to attract equity investors and how you go about building that and what it looks like. Often what we see is people do get stuck in that like: Ok I have this idea now and I have this really big idea. And if you want to target investors well, you have to really prove that you can execute on that small piece but still tell them the story of that big piece. So, a lot of what we do is kind of educating you around – depending on your business model and who you’re trying to sell to and what you’re trying to sell – what those traction metrics for investors actually look like. Whether you need to be going to get letters of intent from big enterprise customers or you need to really show a growing user base or growing number of transactions, we kind of help navigate that, help you figure out what your next steps are; and then, once you do find investors whether it’s on our platform or elsewhere, we provide the documents that are most standard for them to invest at the early stages.
Angie: Wonderful, so, I think that really you know, without… I’m sure we could both talk about this topic for hours and hours but, because we do it all day every day.
Angie: Indeed! And so, as far as an E2 visa, Peter and Gust Launch are very important for my clients because, the first step is going to be to get ownership in some sort of U.S. company. So, especially for those launching either by themselves or maybe with another partner, something like that, this is a really key piece.
So with that… I’m not sure, I don’t think I’ve seen any questions so far in the chat. However, if anybody has any questions this would be a really good time to ask. Otherwise, I really encourage you to reach out either to Peter or myself. Peter what’s the best contact for you or the website or or … How would someone contact you or your crew if they have questions?
Peter: Sure, if you go to gust.com you will find a little chat bubble where you can talk to us. And as I said we respond pretty quick. We’re happy to answer any and all questions about starting company and point you in the right direction.
Angie: Fantastic. And for me, you can reach out anytime, you can either go to the website RupertLawGroup.com and fill out the form there and you can reach me on WhatsApp at obviously, country code +1 323 434 4385.
Oh, Peter real quick, do you handle DBA’s?
Peter: Yeah, interesting one. So, DBA’s are super interesting. They’re basically doing business as name, often you’ll see if a company goes through a name change but doesn’t want to go through the process of changing their actual name, they may file what’s called a DBA to allow them to operate publicly as a different name.
We do not directly facilitate filing DBA’s, only because often you actually have to file at a state, city and county level – they’re really strange – and we find that in the majority of instances a DBA isn’t necessary. So, if you’re looking into that, make sure you know why you’re doing it and you have a really good reason because otherwise it’s just gonna cost you a lot of money and administrative burden.
Angie: I think that´s for and obviously if it’s by the county you and I, there’s no way we would know the answer for all counties. But, I do believe you’re right about that. There’s… a lot of them…it´s kind of just like… it’s like a nickname that is kind of for funsies. Like, call yourself what you want but, you’re still going to be filing your taxes and all of those things as you’re kind of legal name.
Angie: Yeah, in some instances it may make sense; but, in some maybe not. But anyway, I think…Peter unless you have any parting words… We gave our contact info out, any other last thoughts?
Peter: No, I think that’s it for me.
Angie: Fantastic, thanks everybody for joining us and thanks so much Peter for coming along. You gave a lot of really good info and we’re thrilled to have you
Peter: Yeah, absolutely. Thanks so much for having me along.
Angie: Thanks everybody. Have a great day.