HACKER Q&A
📣 eftel

What company for EU based startup


My cofounder and I are currently working on an idea that we eventually want to turn into a startup.

Our plan is to build the MVP, show that there’s interest in the product, and then pitch to VCs to get funded. For the time being, the company doesn’t have any real operations other than the two of us building it on the side. We are looking for the best option in terms of costs now and we are trying to avoid legal headaches later on.

Coming from Germany, our natural choice for the company would be a GmbH or UG but that’s not very attractive for US VCs. We can’t really estimate how much of a hassle it is to convert this to a C Corp later on. Has anyone here ever done that?

Starting with a Delaware based C Corp would put us both in uncharted territory. We would need experts for basically everything. Which would make it quite costly. We can’t really estimate how much this would cost us per year. Looking at Stripe Atlas, it’s $500 initially + around $3000 (including legal fees) yearly to run the company.

Another choice would be a UK based Limited. Easy to set up and relatively cheap to run. But here, again, no idea how easy it is to convert it into a C corp later on.

Any ideas, recommendations greatly appreciated

  👤 pr07ecH70r Accepted Answer ✓
I would start with OHG, and at much (and really much) later stage, transform into AG. In the beginning of a startup, the road is quite bumpy, you are still in a phase of attracting customers and kind of validating your MVP. OHG would be completely sufficient in the case of only you and your co-founder. Start it a bit as a "bootrstrapped"-type of an enterprise. Later, and if, you survive, than you can make the necessary changes to an AG. This will safe you some of the costs associated with the big enterprise, while you still can switch on a later stage, for growth purposes, and possible VC funding.
👤 brudgers
There are long odds against VC investment.

Of all the things that move you toward such an event, time spent optimizing company structure is low return for value compared with talking to potential customers and converting them into actual customers by building and shipping.

If you get that right enough for VC investment, then there will be money for lawyers will make a Delaware C happen.

Or to put it another way, your company structure will not prevent a Yes, but prioritizing that sort of playing house will.

Good luck.