Notes & Links for Startup your Startup

Ryan S. Dancey
Aug 26, 2018 · 7 min read

This article was prepared as a reference for those attending my “Startup your Startup” seminar at Pax Dev in Seattle on August 29th 2018.

This seminar is targeted at people who want to start a small company to publish a game (tabletop or video game), especially those who want to Kickstart a project.

I Am Not A Lawyer. Consult a professional lawyer or accountant.

Part I: THE QUESTIONS

Do you Want Your Game Published or do you Want To Publish A Game?

  • Selling or Licensing your game to someone else
  • What it means to run your own publishing business

Summary: Before you begin decide what it is you want to be in business to do.

Cost: Zero

What is “The Deal”

  • Get it in writing
  • Who owns what (Stand by for Part II!)
  • Who puts in what assets (cash, equipment, rent/space, IP, time, etc.)
  • Assignment of rights agreements
  • Royalty deals
  • What money is paid out, when, to whom
  • How to bring in more people
  • How to remove someone
  • Who will be the Officers and what will their titles be
  • Who will be the Board of Directors, and how are people added or removed
  • Employment contracts
  • How to liquidate
  • Who is responsible for debts & liabilities
  • Who has power to sign contracts
  • Who has power to write checks
  • Who will have access to the financial accounts / statements

Summary: Before you start, you need to have a frank and honest discussion with your co-founders; even if your co-founders are just you.

Costs: Zero up to bankruptcy, prison and the end of marriages & friendships

The Professionals

  • Lawyer
  • CPA / Bookkeeper
  • Print / Production broker for China
  • Media buyer / PR Consultant / Marketing Consultant

Summary: There are some specialized fields that have a bearing on your startup. You should consider connecting with and retaining these services.

Costs: Will vary widely depending on the people and the amount of work.

What’s Your Name

Summary: Naming is hard, but fun. Try to get a name that converts to a snappy domain name and isn’t a trademark owned by someone else.

Costs: Zero unless you want to pay a lawyer to check trademarks

Part II: THE COLOR OF MONEY

Types of Legal Entities

  • Sole Proprietors [ Bad ]
  • Partnerships [ Bad ]
  • Limited Liability entities [ Good ] / LLC vs S vs C

Summary: I recommend that you form a C-Corporation in either Delaware or your home state. C-Corporations are the least complex limited liability entity, are easy to set up, and are only problematic if you have a very wealthy investor who wants the maximum liability shield or you expect to have large amounts of cash profit that you want to pass to shareholders on a regular basis other than via payroll or dividends.

Costs: Legal work $1-$2k (may be optional — depends on your skills & comfort), setup & filing fees around $500.

Equity, loans, and gifts

  • When you make someone a part owner in your business, you provide them with “equity”.
  • When someone provides money that you are expected to pay back, that is a “loan”.
  • When someone gives you money or anything else and doesn’t require repayment or return that is a “gift”.

Summary: There are lots of ways to input value into a startup. Each has it’s own pros & cons.

Costs: Will vary depending on how structured you make the transaction and how risk adverse are you and the other parties in deal.

Part III: ZERO TO “BUSINESS”

Form the Entity

  • We recommend a very basic C-Corporation

Summary: Using boilerplate text from the internet you can bootstrap a simple C-Corp fairly easily.

Costs: Free, or you can pay a lawyer or other pro to make sure it’s all done “right”.

Google GSuite

  • Gives you access to business email accounts
  • Also provides shared storage (Drive) and apps (Sheets and Docs)

Summary: Set up a GSuite account and buy a domain. Make your business on-line presence separate from your personal presence.

Costs: $5/user/mo, about $20/year to register a domain

Licensing & Registrations

Summary: You will need various licenses and registrations to operate legally.

Costs: FEIN is free, registrations & licenses with states cost $50-$100

Bank Accounts

  • Minimum: checking with debit card
  • Desired: Savings and a credit card
  • Online applications now realistic (Wells Fargo)

Summary: Regardless of what kind of entity you choose you should always have a separate bank account for it; if you have a debit card you can protect your cash by keeping it in a savings account.

Costs: Essentially free with a minimal deposit (hundreds of dollars) and monthly balance after account created.

Merchant Services

  • Set Up PayPal
  • Do not use your personal PayPal account
  • Square (Varies based on type of transaction)
  • Stripe (Varies based on type of transaction)

Summary: As soon as you have a bank account use it to set up a PayPal account; its free and there are lots of good reasons to get one for the business.

Costs: Nothing

Accounting Method

  • Accrual vs Cash

Summary: Pros & cons to each, but future-proof option is accrual, especially for those Kickstarting.

Accounting System

Summary: You should be able to automatically connect to your bank, and to PayPal which will automate monthly account reconciliation imports and save a lot of time and heartache.

Costs: $60/mo (current deal for 3-month contract at $30/mo)

Paying People

Summary: You need to know how to classify your workers correctly and file the proper paperwork with the IRS.

Costs: Zero, just your time to research and learn the difference.

Hiring People

  • I9 forms
  • State forms (you’ll need to research for your state)
  • Onboarding Documentation

Summary: Get your paperwork in order and have your employees work through it when you hire them to avoid downstream problems.

Costs: Highly variable depending on how complex your employee agreements are.

Payroll Services

Summary: Don’t try to do payroll yourself; it’s virtually impossible without a lot of specialized knowledge and training. Outsource to Quickbooks. The option you choose is mostly determined by the complexity of your mix of employees (how many states they’re in).

Costs: $19 or $49/mo + $2/employee/mo

Mandatory Payroll Features

  • Worker’s Compensation
  • Unemployment Insurance
  • State Payroll Taxes

Summary: You need to investigate what you are required to provide and how to provide it on a state-by-state basis for each employee.

Costs: Highly variable based on who does what where

Optional Payroll Features

  • Health Insurance
  • 401(k)
  • Vacation & Sick Leave

Summary: These are the three primary benefits that most employees expect to receive through their jobs. On a state-by-state basis you’ll have to determine what you’re legally required to provide and how, and then decide what if anything you wish to offer beyond the minimums.

Costs: Highly variable

Take in Some Money

  • $500 to $1,000 is a good amount to work with
  • Have whomever puts in the money sign the shareholder’s agreement

Summary: You’re incurring expenses and you’ll want to have the entity pay or reimburse for those expenses so that your books are “clean” from the start and you don’t have a lot of weird loans and obligations outstanding for the costs of forming and starting your company.

Costs: Free, unless you want to pay a pro to write the initial shareholder’s agreement.

Part IV: GO TO MARKET

Logos & Trade Dress

  • Decide how much to pay for these assets

Summary: Few initial company branding packages last very long. Whatever you make now you’ll almost certainly want to replace in the medium-term.
Don’t burn your the cash on this stuff until you’re actually making and selling products.

Costs: Highly Variable

Creative Tools

Summary: You want to use current versions of the best tools to ensure you can work with other people’s files and provide files other people can work with.

Costs: See above.

Your Website

  • Don’t host or manage a server, pay someone like Dreamhost
  • WordPress
  • Mediawiki

Summary: For a few dollars per month someone else can manage your website server and they should. You should focus on content.

Costs: Around $20/mo, plus extra for various plug-ins you may wish to use with WordPress ($50-$200).

Marketing Systems

Summary: You can get a suite of tools configured to help you market your brands and company quickly and easily.

Costs: Advertising platforms are basically free; MailChimp costs when you’re big enough to exceed the intro plan (2,000 subscribers, 12,000 emails a month), SurveyMonkey has features you may want to pay for.

Customer Service & CRM

Summary: You want to ensure that your customers are getting fast responses and you want transparency into what they’ve been told.

Costs: Pay as you grow; accounts are $50+/user/mo above intro volumes.

Logistics

Summary: You want to automate as much of the process of shipping as you can.

Costs: See above.

E-Commerce

Summary: You want to outsource as much of the infrastructure of your online sales and merchant services as you can.

Costs: See above.

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