Re:Cambridge YC Alums: How'd you spend your funding?
by cwilbur on Monday April 16, 2007 @11:16AM
(#13308)
$500 for incorporation is a very low figure for some states. If I remember right, the cost of incorporation as an LLC in Massachusetts (which is what I was researching at the time, because that's where I am) runs about $1000 between what you end up owing the state and what you end up owing the lawyer; incorporating as an LLC in any other state means you need to register as a foreign corporation with the state if you intend to do business in that state (in MA: lease property as a corporation, pay salaries as a corporation, own property as a corporation), which in Massachusetts runs about $1000 between what you end up owing the state and what you end up owing the lawyer.
Other states may be more lenient on when you need to register as a foreign corporation or cost less to incorporate or register as a foreign corporation. Also, for some startup models, it can make sense to incorporate in Delaware when you start development and then worry about the whole foreign-corporation thing when it's time to start hiring employees rather than adding partners.
I did a startup in another college town, and this is how it worked out:
- Rent - $1,000 / mo
- Food(3 guys) - $400 / mo
- Electricty (12 PCs/servers) - $150 / month
- Business internet access (hosted our own servers) - $150 / mo
Another big expense will be the incorporation costs, which can run as much as $500 (varies per state).
In the end, it ended up being $1,800 / person for the entire summer. We already had all the equipment, so none of that was included in the expenses.