Episode Transcript
Speaker 0 00:00:08 Welcome to the rogue startups podcast. We're to startup founders are sharing lessons learned and pitfalls to avoid in their online businesses. And now here's Dave and Craig. All right. Welcome to episode two 48 of rogue startups. Craig, how are you this week?
Speaker 1 00:00:25 I am good man. Good back home in France after four weeks in the U S so nice to be home at my desk with my big old monitor and, you know, like proper place to work after, uh, kind of just figuring it out from a work perspective and schedule for, for a few weeks. But, uh, it was really nice. It was really nice to be there on the same schedule as about half the teams. We were about half the team here and half the team, uh, in the U S so it was really nice to be on that schedule for a little bit to get to connect with a lot of them, um, more regularly. So, but yeah, always nice to be home.
Speaker 2 00:00:59 Very nice. Very nice. Not to mention the fact that you are two doses of the vaccine, uh, stronger at this point, and you're one of them, you're one of like seven people in France now that has a, the vaccine, right?
Speaker 1 00:01:11 That's about right. Yeah. I mean, it's, it's, it's, I mean, it's getting better, you know, they're picking up steam here, but I mean, they're just so far behind, uh, you know, the U S and the UK in terms of percentage of eligible people, you know, to be vaccinated. So it's challenging, man. I mean, I don't know that the challenging thing is it doesn't get me anything tangible to be vaccinated today, but, but I think we're hoping that like, you know, in the future we're able to travel more because we're vaccinated there. Like they're talking about today, actually this kind of green certificate or something where if you're vaccinated, you can travel Europe more freely. And if you're not, then you can't, um, like coming up the summer. So like those kinds of things that being vaccinated here in Europe gets you certain liberties, I guess, that, that non-vaccinated folks can't so definitely glad we did it. It was horrible though, man. I mean, it kicked me right in the head for like two days, um, uh, adviser after I hit that second shot about, you know, 15 hours after that, I was just totally cashed out for about 24 hours. It was terrible.
Speaker 2 00:02:15 Yeah. I had the same thing with my Moderna second shot, uh, fever, chills aches, uh, 24 hours and done, but it was a miserable 24 hours for me. Yeah. But I'm glad it's over. And uh, you know, we've got, uh, my wife and I are now two doses in my oldest daughter is one dose in, they just look like they're on the verge of approving the 12 to 15. So that means my 13 year old will be eligible here pretty soon. And my youngest turns 12 in August. So I mean, yes, there is a, there is a window here and I'm looking forward to it opening up in the very near future.
Speaker 1 00:02:56 Yep, yep, absolutely. Absolutely. How about you? How are things?
Speaker 2 00:03:00 Things are good. Yeah. So trying to put together my own content marketing stuff right now, and I've got a keyword research plan in flight and I'm trying to deal with the, the writer piece of it at the moment. And then once I've got those two in place, then I need to find somebody to do some link building for me. So yeah, just trying to search all those pieces in and put it all together and make it work in a relatively good timeframe. I mean, I'm, I'm so far behind where I should have been at this point and I feel like, you know, I'm, I'm missing that opportunity, but I'm not really missing the opportunity. It's just, I feels like that. So, um, and then, uh, we are trying to push the SMS stuff out the door. And I think I finally decided on what the pricing looks like on that, but that also falls in my court at the moment to try to get that last bit done and handed to my developer so he can code that and I keep meaning to do it and I haven't gotten to it yet. So,
Speaker 1 00:04:07 So are you, are you able to share it? Are we all going to be, uh, like suspended in, in waiting here? Uh, share the pricing, share we share what the pricing models like.
Speaker 2 00:04:19 So I've ultimately decided that because I don't know how many people are going to sign up for this and trying to revamp all of the pricing around. This seems kind of crazy at this point. What I'm doing is I'm going to make them both. Ad-ons just strict ad-ons right now, which when I revisited it and thought about it and talked about it with a lot of people, it seemed like that ended up being the simplest considerations. So if we basically view recapture as, Hey, we do abandoned carts and somebody signs up for us in there, they're like, okay, you do abandoned cart. It's great. And they like what we do with abandoned carts. Then they, the way that it typically comes after that is that, Oh, Hey, do you also do broadcast emails? So it's a, can we put this all under one roof kind of consideration, as opposed to I'm looking for the platform that does everything, you know, there's somebody isn't searching for that upfront for me so far.
Speaker 2 00:05:20 That's not what I've heard from customers. That's what I wanted to believe, but that's not what the data's telling me at this point. So my current plan is to basically say, we're going to say, all right, here's our basic pricing for the abandoned cart stuff. And you know, most people, I think that works pretty well. And then if they want to upgrade and they want to add on SMS, then they can add on SMS as a separate price. And then we're going to do the same thing with broadcast emails. If you want to add this too great, we can do that because for them it's more of a convenience factor. They don't want it, you know, they, our platform for the abandoned carts and they've got their broadcasts somewhere else. And they're, you know, the things that I've heard are, well, we just don't like it over there or they don't, we don't like the analytics.
Speaker 2 00:06:07 We don't like, we don't like something about it and we just want it all under one roof. We want it all consistent. And so if I offer that all a cart kind of thing, then they can get that consistency and I can get the revenue from that instead of me trying to say, all right, we're the platform that does everything, which doesn't, you know, that's not what I'm hearing from the customers that I'm talking to about that. So it was important to kind of reframe that discussion. And I was having a hard time reframing that until somebody pointed that out. So I think that's where I ended up on this.
Speaker 1 00:06:41 I like it. I mean, it, it definitely keeps with the simple that you wanted to stick with before that, like, Hey, this is the headline, you know, in kind of subtext, you can have these add ons. Like I think that makes like a lot of sense. Yeah. So that's cool. I think, I think that makes a lot of sense.
Speaker 2 00:06:56 We'll see, I'll get it pushed out and hopefully it resonates.
Speaker 1 00:07:00 Yeah. I mean, I think if you get a lot of traction with it, then, you know, it's easy to go and say like, okay, we're going to bake this into the regular pricing somehow later, if, if a bunch of people want to kind of opt into the add on. So that's nice.
Speaker 2 00:07:13 Right. And it may be later on that we do like the convenience bundle or something like that to say here, you can get the whole kitten caboodle for one price.
Speaker 1 00:07:22 Yeah. Yep. Makes sense. Yeah. It makes sense
Speaker 2 00:07:25 That that can be an evolutionary step, not a revolutionary one. So
Speaker 1 00:07:30 There you go. There you go. Yeah. Nice. Um, you were talking about content marketing from, from our end. We, we did hire another writer. Yeah. I mean, and kind of just to, to highlight the process we went through. Cause I know we talked about it. We, we posted a job posting on, we work remotely and on pro blogger.com job board got a whole bunch of applications. Um, and really the biggest one, the biggest few things that I looked for were like, like for us, like domain expertise, like experience in podcasting, other places that people had written before, just because like kind of like, Hey, where have you worked before? Like that, that pedigree is like, hopefully a good kind of signal of like a quality candidate and then a pretty soft question about like, why do you want to write for cast us? Um, but just to see what people have to say, I've got a whole bunch of applications picked about a dozen or 15 to respond.
Speaker 1 00:08:31 Two of those, a handful came back with, you know, like really quality kind of responses and then gave all of them a test project. And to the test project was like, we doubled up on a single article across a couple of different writers and yeah, from there really got one that was like a standout. And so yeah, brought her on, she wrote actually a guest post for us, which is cool and going to bring her into the mix. So yeah, that was, that was kind of the process, pretty happy with what we got in the end and are paying like what we want for a really good writer, turns out our writer that we thought was going to leave is not leaving. So we have two writers now, which is cool. So we can kind of double up on, on content. And now kind of like you're saying have to figure out how to plan for that, you know, like, do we write twice a week now or do we really push guest posting and have one of the writers pretty much just do guest posts or something like that. So I think that's where, that's where the bottleneck is with writers is we have two writers that are ready to go and we don't have two writers where the stuff plant. So that's kinda, that's kind of where, where on the bottleneck in the process again.
Speaker 2 00:09:39 Right, right. Yeah. We always end up the bottleneck at some point. Right. So I have a couple of questions about your process. So you said you got a ton of applications. What was it that you looked for that sort of singled them out? Was it the why question or was it the work samples? Was it a combination? Like what was your filter criteria? Cause usually there's always, there's something that can really filter out the wheat from the chaff, right?
Speaker 1 00:10:02 Yeah. I think the first one was work samples, you know, and, and as silly as it is just looked for like, you know, Hey, I've written for this site or that site that I really know and respect like that. That's a great sign for me that the second was like the response to kind of my open-ended question, just to see like, Hey, did they have interesting things to say, do they, are they kind of witty and clever? Or is it just like, I've, you know, I want a job, you know, I need, I need money. Yeah. So that's, that's it. And then I wrote like, my question to them was, you know, more of like, what about this role specifically interests you? Uh, so that, you know, like kind of, why do you want to work with gastros and, and kind of just wanted to see what, what they had to say. Do they get back to you in a timely manner? Are they professional? Over email does seem like someone I can communicate with, you know, those kinds of things.
Speaker 2 00:10:53 Okay. And the test project, was it paid or not?
Speaker 1 00:10:58 Yep. It was paid. It was a flat fee and yeah. Agreed on that. Pretty, pretty early in the conversation, um, saying, Hey, this is what we're looking for. This many words, this kind of rate. And it was around that like three to $400 per article range that we talked about before. Right.
Speaker 2 00:11:13 Right. So that's great. You found somebody that, that, you know, Rose to the top through all of that right there. So that's excellent. And how many total applications did you end up getting to start with?
Speaker 1 00:11:26 Like 200 something around there? Yeah. Yeah. I mean, it's, it's totally unfair, you know, like from, from our perspective to try to do 200 applicants justice, you know, cause you have five seconds to look at each one. Right. You know, so, and it's the same way. Like when we hired for support, it was the same way, just tow so many applicants and I'm sure there are a ton of gyms that we missed, but you know, to be the best we could. Okay.
Speaker 2 00:11:55 All right. Well that's cool. And well, I'm going to have to totally carp a lot of that from from you here because I haven't made my job posting yet. So it sounds like that ended up in a fairly good place. And that's exactly what I'm looking for. So I could pay basically do a search and replacing your job post from podcasting to e-commerce and be good.
Speaker 1 00:12:18 Yeah. I mean the, the thing that I, that, that, that, like we're always trying to refine is, is exactly that question you had was like, how can we structure the application to where when a really good candidate comes through, it's easy to see, you know, like how can we ask a question or, you know, form the, the, the whole interviewing process to where like a really good applicant will rise to the top automatically and easily. And I don't, I don't feel like we nail that at all with how we hire, like, I think it's just something that a lot of people struggle with, especially if you want to do it quickly, you know? So I don't, I don't have my answers there, but that's the one thing that I spend more time on as we go forward.
Speaker 2 00:12:59 Yeah. Well, I mean, hiring is the hardest thing that, that all of us do as founders in general, and, you know, as a hiring manager for developers for years, you know, I've struggled through a variety of different kinds of questions to, to find what is the ideal, what is the ideal way to screen a candidate, to keep the bozos out, to let the cream rise to the top and somehow have your process stand out in their mind like that they don't feel like you're just putting them on a grill with everybody else and treating them the same way. But the truth is you have so many of them to go through. You kind of have to have that sameness process to make it work. And, you know, I mean, I remember as a developer manager, one of the first things that we did were those stupid brain teasers, because Microsoft was doing them at the time.
Speaker 2 00:13:50 This was in the late nineties. And, you know, it seemed like that was a, a good question, but, you know, then we hired some people that were really good at the brain teaser and they were really shitty employees. And I was like, God damn it. This is not a good question. So, so then, you know, I just tried general screening questions, but then that didn't really, you know, I got mediocre employees out of, uh, some of those things there, some good ones too, but it didn't, you know, it didn't like focus us on just the good candidate. So I didn't feel like that was a great way to do it either. And then later on, I found a very simple question that we use now. And if you're in the developer space, then you probably heard of the fizzbuzz test and you're probably, you know, there's probably half the audience that's now rolling their eyes, thinking that I use this test, but surprisingly this task, which has a basic, very simple translate, some English into software logic, and seems on the surface, like it's a dumb question and it's just so simple, like it shouldn't test anything, but what it does, what I've noticed that it does is that it helps me screen out the really good people, because the really good people can look at that question, realize that it is so dead simple.
Speaker 2 00:15:10 And you know, some of them will like seize up a little bit and then start asking me all kinds of educations. Should I be checking for this? Should I be checking for this? Should I be doing this? Should I be thinking about that? And those are the people like, you want people that think like that. So, you know, that's, that's a good sign right there. The other good sign is when somebody goes, all right, I think I understand this. Maybe they ask some questions, maybe they don't, but then they have the whole solution implemented in like five minutes. And it that's what it's supposed to do. Like if you are that good, it should let you come right out and just say, here's what the solution is. And then I've got a second level of that question where we ask them about some optimization ideas.
Speaker 2 00:15:52 So it lets lets me go deeper into their thinking on still a very dead, simple problem. And what on the surface looks really fucking stupid, but it turns out to actually have some really great screening capability to it and good candidates breeze through it really quickly, bad candidates, struggle, miserable candidates can't even do it. So it, it, it is the perfect question for that. It doesn't tell you much about like their personality, their communication. So I have to supplement it with some other things during the interview process to suss that stuff out. But as far as a screening question goes, I've found that's really good, but I haven't found the equivalent for that with like customer support or, you know, I only tried to hire a writer a couple of times at this point and I didn't have very, uh, anything more than very basic stuff. And so, you know, it, it's hard to find that same question in other domains. That's the, that's the thing. And I'm not even sure what that question looks like in other domains. How do you ask a writer? How good they are? I mean, all I can think of is sample work, right? So you look at their sample work, it's either shit or it's not shit. Right.
Speaker 1 00:17:06 And then some of it's, you know, ghostwritten so you can't really tell that it's them, you're like, they're not on the byline and a lot of those things, but I mean, I think the, the, the, the other part of that is like, probably like you're doing in software is like, get to actually working together as quickly as possible, you know?
Speaker 2 00:17:22 Right. And that's ultimately, the only thing that ever really matters is what is the minimum amount of screening I can do to make sure that this person is minimally capable of doing the job and then let's work with them for 30 to 90 days and see if they're a piece of shit or not. And if they are, then we kick them out the door and if they aren't, then
Speaker 1 00:17:40 That's a little harsh day to see if there are not a good,
Speaker 2 00:17:44 If they're not a good fit. Yes. But sometimes I've hired people that have been like, just absolutely miserable in the communication department. You know, they, they sounded really good for the one week that I was interviewing them. And then they fell apart after I brought them on board. Like they just, they ghosted me and they weren't talking about what they were struggling with and they weren't getting things done. And so, yeah. I mean, that's, that's kind of shitty thing to do after you get hired. Yeah. So yeah, I mean, th that goes beyond not a good fit. They're just like they fell apart. And why did I not recognize that during the interview process? How did they sort of skirt my detectors? Yeah.
Speaker 1 00:18:23 Right. Yep. Yeah. We've had that recently too. And it's challenging you look back and say like, God, how did I miss this? What did I do wrong? And I don't, I mean, I think that's why challenge hiring is so challenging because you're not doing anything wrong. It's just that figuring all that out from, you know, an hour or two hours of talking to someone is just challenging. And, and I think that's just why it's so hard. Yeah. Yeah. The only thing making excuses,
Speaker 2 00:18:48 The only thing that really was, seems to work is just that trial period and say, look, we, at any time we can call it off either of us and we'll, we'll work it out. And at the end we'll make a decision. But yeah, the hard part is at the end of that, if they're sort of like middling, that's the part that I struggle with, like, should I keep them on or should I let them go? You know, they kind of did. Okay. But they're not doing as great as I'd hoped. Yeah. Anyway. All right. So we're, we're kind of off track there, but yes. Yeah,
Speaker 1 00:19:17 Yeah, yeah, yeah. Yeah. The other thing I thought might be interesting just to kind of talk through, and again, I think neither of us are experts or have the answers to this, but just interesting to talk about maybe is, you know, the, the question of whether a company is an LLC or a C Corp, I think there's a lot of tendency, maybe a bias in, in our kind of, you know, bootstrapper space around one versus the other. And I think very real like upsides of, of both. And I guess the context of this is that <inaudible> started out as an LLC and joined tiny seat as an LLC, which I think they're, they're one of the few kind of accelerators investment places that you can join as an LLC. But, uh, just as of this week converted to a C Corp because it gives us more flexibility in terms of our options down the line around financing and corporate structure and things like that. So, um, yeah, I just thought we'd talk through this. I know like INR from tiny seed and has been on startups for the rest of us a few times knows a ton about this. Maybe you should have him on as a guest, but I think like he's talked about this quite a bit. Um, and maybe I will try to do some of that knowledge justice here.
Speaker 2 00:20:31 <inaudible> the top guy on this that I know of, you know, and it wasn't really, until Josh at bare metrics went through the QSB S with his C Corp, when he sold bare metrics that everybody was like, Oh, I could do that. And so let, let's give a little bit of background for somebody who might be sitting here, scratching their head and doesn't know what all of this stuff means and what the implicit, what the implications are here. So the LLC is definitely one of the simpler, well, the simplest option is a sole proprietorship and clearly a lot of people start out. You know, if you're a bootstrapper single founder, you're good. Probably going to think about maybe a sole proprietorship. At some point, if you talk to a CPA, if you talk to a lawyer, they'll probably, you know, say, blah, blah, blah, liability shield, blah, blah, blah, be careful of lawsuits, blah, blah, blah.
Speaker 2 00:21:27 You should form an LLC. And the LLC gives you some corporate liability protection. It doesn't, you know, if you do something personally stupid, you're still going to be liable for that. But in general, there, there is a level of liability protection that you get as an LLC. And so the, you know, there's a natural upgrade, I think, or a place to start where an LLC is kind of like one of the simplest corporate entities that you can have out there. And then there's S corpse and C corpse and C Corp's are the ones that, you know, you think of that are the more traditional, larger corporations. They tend to issue stock. They have shareholders, they have dividends that they publish out, but then they are also taxed as a corporate entity, whereas LLCs S corpse and sole proprietorships are what they call pass through. So if they make a certain amount of income that corporate entity doesn't get taxed and it passes down to you as the owner, or one of the owners of that business, and it goes on your personal taxes. So, you know, that's one of the big things I think that detracts, most people, myself included from looking at the C Corp is that there's a problem of double taxation that comes with that. So you're taxed as the C Corp on your profits. So your entities right there, and then you're also taxed as a personal owner of that business on the income you make on it. Whereas with a pass through entity, it's single tax, single taxation. So it's only on your personal taxes that you get hit with that. But I think the
Speaker 1 00:23:02 Big caveat for me there is if you are profitable, if you're profitable. And so I think that a lot of, you know, us frankly, uh, start out as C Corp speed and say, okay, you know, I can pay myself, you know, fair market wage in terms of salary. And then I can take dividends. And those are taxed as long-term capital gains, I guess. Right. Um, in, as an LLC, if you do that as a C Corp, then the company is taxed on its corporate profit and you're taxed on everything. That's not salary personally. And so that's where the double taxation comes in is if you are, you know, a mega profitable company or profitable at all, and you take a bunch of money home, both of those could be taxed. Right? Right. And so let
Speaker 2 00:23:46 Me just put a huge fucking Astros on this whole discussion. If they do not take Craig and I for solid, realistic, helpful tax advice. You know, some of this is born out of our own experiences with our own CPAs and our own situations in our own States. If you need real advice and real help on this, please find a CPA in your province, state, locality, wherever, and somebody who can actually give you real legal advice about the exact situations and problems that you're facing. Your mileage may vary tax, title, and license, extra, all of that sort of stuff. Yes. That's the fine print, but
Speaker 1 00:24:28 Yeah. Yeah. So, I mean, I think that on the surface, the benefits of a C Corp don't seem so, so obvious, but Dave, like you mentioned, Josh, Supermetrics had sold as a C Corp and there's this thing called Q SBS qualified something right.
Speaker 2 00:24:43 Small business shares or something
Speaker 1 00:24:46 Qualified, small business shares. There you go. Yeah. So there's this thing called qualified small business shares. QSB S where, if you are a C Corp and you hold the shares for more than five years upon the sale of those shares, you are not taxed. You are not
Speaker 2 00:25:04 Tax to long-term capital gains. I don't, I don't think it's like completely tax-free in any way, shape or form. Right,
Speaker 1 00:25:11 Right. You got it. So this is the edge of my knowledge around it.
Speaker 2 00:25:14 Yeah. So I think if you don't get the long-term capital gains on there, but there might be some other taxes, like if it bumps you into a higher income tax bracket, you might get taxed on that. I don't know exactly how that works. This is where we need HR on here. Cause ANR would know this, right?
Speaker 1 00:25:30 Yeah. Yeah. There, there are also some, uh, situations. And again, I don't know the answer where you can leave money in the corporation. If, and again, this is a whole nother one is if you go to sell your company and you sell it as an asset sale versus a stock sale, you sell it as a stock sale. Then the acquire is actually purchasing your company, not just your software and your IP and your customer list and stuff like that, which would be an asset sale. And there is an instance, and I don't know the details of it, where you, if you sell your company as an asset, you can keep the money in the corporation under certain circumstances. And I believe that can be tax deferred or tax free or something like that, which, you know, if you think about like, none of us are going to retire, so we're probably going to go do something else. There is a time where you could say, okay, I'm going to sell for whatever. So you sell for a million bucks. If some of these criteria are met, you can just say, Hey, I'm going to keep, you know, some amount of that and the company and go do something else with it. Um, instead of having to quote, having to bring it home and pay income tax on it. Right. So that's just another thing to investigate further. Again, we are not tax people, but this is, these are just kind of ideas and thoughts. Yeah.
Speaker 2 00:26:40 And the one. So in Josh's it worked out really well because he, it sounded like he basically had a number of expenses that the business was paying. So his corporate profit was not zero, but it wasn't huge either. It wasn't like 50% of his income or 25% of his income. It was okay. But it wasn't like that high. So he was basically getting taxed on us, you know, we'll call it a reasonable level of profit. And he had that for five years, but everything else was going into the business and he was getting a decent salary out of that. So he wasn't, um, unhappy with that setup either. But then when he got to the sale of the business, the taxes that he'd been paying on, there were much, much less than the taxes he would have paid at the sale event for, I forget what the sales price of bare metrics was, but, um,
Speaker 1 00:27:34 It was big like four and a half million
Speaker 2 00:27:36 Going, gonna say as close to five. So, you know, when Josh basically ended up with his money, I think he was showing that if he had done this, the traditional C Corp route, then he would have been left with 2.1. And instead he walked away with four, something like that, or maybe three and a half, but it was a significant difference. Like it made a huge difference in taxes. So, you know, in that particular case, if you could somehow run the numbers, predict the future and assume, Hey, this is going to work. Then I would say that C Corp route makes a lot of sense, but you know, that five year vesting period, that's the struggle. And, you know, if you do suddenly get cashflow heavy and I can think of several businesses, several friends of ours that are in very cashflow, heavy businesses where I think they would be, they would be paying a shit ton in taxes if they were doing this right now, because I don't think they've deployed their capital in a way that they could take advantage of all of that and make expenses happen out of it. Right.
Speaker 1 00:28:36 Yeah.
Speaker 2 00:28:38 So it is very much a situational dependent kind of thing.
Speaker 1 00:28:42 Yup. Yup. Yeah. And I think the other thing that I kind of touched on at the beginning is, you know, we did it part partly you're maybe mostly just for options in the future around different kinds of, you know, fundraising, raising debt, raising equity, you know, raising money from equity that, you know, it's just, you know, a C Corp and the shares that are associated with it, or just kind of the language that a lot of investors talk. And so I think that's the other consideration is like, if this is a business that you're not expecting to raise money from, then you don't need to be a C Corp. If you are planning to raise money, again, like even a lot of debt, I think companies, or, you know, lenders want, you know, it to be a C Corp, uh, for us in particular, there is a usury law in Florida that, that restricts debt lenders, uh, from, from issuing like significant amount of debt, if they're an out-of-state lender. So it might be specific to Florida. Um, and again, your mileage may vary, but that, that was one thing we ran into is that we just couldn't take on a, a sizeable loan with most lenders. So it was weird.
Speaker 2 00:29:51 Yeah. And from what I've seen on contracts. So, uh, when I sold the plugins, the company that bought them, they were based out of Florida and they had some weird language that was in the contract that I was like, does this need to be in here? Because it didn't make any sense to me. And I took it to my lawyer and they're like, I've never even heard of that. And they were like, Oh, that's a Florida thing, but yeah, you don't need to worry about that. And I was like, okay, let's strike it from the contracts with Florida thing. Don't worry about it. So I was like, okay, so Florida's got some weird company purchase laws in there, so it wouldn't surprise me that there's stuff around funding as well.
Speaker 1 00:30:27 Yeah. And I mean, I think that's another thing is right. Like a Delaware C corporation is the most standard thing that everyone will understand whether it's fundraising or debt or buying or selling. That is like the baseline, you know, um, that I think a lot of people, you know, attorneys, bankers, whatever are used to, to speaking,
Speaker 2 00:30:46 Right. And if that's the way you want to go, then you should be speaking the language of those people that you are going to be talking to. So yeah, don't make it complicated. Although I've heard that if you, you know, have a Nanci entity and you decide, you want to start raising, then one of the first things they ask you to do, and I've heard this in Y Combinator, they make you turn it into a C Corp, so you can issue shares, and then they structure it according to the deal and so on and so forth. So it's, you know, if you're doing that, it's usually the first step in the process is to make a C Corp so that you can actually issue the shares and, and have the ownership split be according to whatever that fundraising event is.
Speaker 1 00:31:27 Yeah. Yeah. And I think it's a, it's a, that's a tax thing for the investors a lot. Um, is an Idaho again, I don't know, but, but, but I think that's a tax thing for investors is investing in an LLC gives them different kind of tax exposure than, than an a corporation. Yeah.
Speaker 2 00:31:45 Yeah. Well, we should definitely have ANR on here to talk the, the specifics and the details around that, because it can definitely, you know, it's something I have an escort right now and it's something that is sort of sitting in the back of my mind for capture gets big. And I decided, Hey, I'm, I'm done with this and I want to sell, now I have to go through the same thing I just did with the plugins. And I got to pay a shit ton of taxes, which I did. And, um, not my, not my favorite event. Uh, it also, there was a little bit of a surprise in that the sale bumped up my income. And so all of a sudden I passed some thresholds temporarily that I wouldn't normally have passed. And so I lost deductions doing so. Sure. And so I ended up paying more taxes. I was like, wow. I mean, that's definitely a surprise. And you know, my CPA had warned me like, you're going to, you know, there's no avoiding this, you have to do something then congratulations, you sold your business, but yes, you owe some taxes and it's going to hurt a little bit. He wasn't wrong.
Speaker 1 00:32:47 Yeah. Yeah. I mean, yeah. It's, it's, it's, it's a good problem to have you just want to minimize how, how much of a problem it is, right? Like, you know, making a bunch of money, selling your business, having this big text thing is, you know, you should be overall happy that that you're in that spot, but just, yeah. Want to pay as little tax as you reasonably can. Absolutely. Absolutely. Responsibly. Yeah. Yes. Cool. Well, you know, Dave, I feel like we had a lot more questions than answers and anything in this episode, but it's it, it's an interesting thing to talk about. Um, I think the one kind of question Mark out there too, is there are, there is proposals out there from byte and about changes in tech structure. Of course, none of us know what that will actually look like, but, but I think some of that may affect the, the advantages of an LLC down the line. So kind of just something else to, to be on the lookout for, for us all. Yup.
Speaker 2 00:33:38 Yep. And if you're enjoying the podcast, our one ask as always is to share us with a friend who you think would benefit. And if you have a minute, please reach out to iTunes. Give us a review there. We'd love to hear
Speaker 0 00:33:52 Until next week. Thanks for listening to another episode of rogue startups. If you haven't already head over to iTunes and leave a rating and review for the show for show notes from each episode and a few extra resources to help you along your journey, head over to rogue startups.com to learn more.
