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Comment by jacquesm | Hacker News Reader

There are many good reasons for incorporating as late as you can get away with and for some situations, for instance, YC actively discourages people from incorporating before applying.

This also helps in a different way, it is much easier to reshuffle after the 'shake-out' period if you have not incorporated yet.

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I learned from this (surprisingly interesting MSFT history) that Bill & Paul didn't formalize even a simple partnership between the two of them, let alone incorporate for about the first 2 years, during which time MSFT was operating and bringing in revenue.

http://www.thocp.net/companies/microsoft/microsoft_company.h...

Maybe this is why Paul got screwed. ;-)

Net worth ▲US$13.5 billion (2010)[1]

http://en.wikipedia.org/wiki/Paul_Allen

So it'd be more like $20B if Microsoft had split the equity 50/50 instead of of 66/33. Ironically, Bill Gates's reasoning for the split was the Paul had taken a part-time job at MITS to pay the bills, but then Bill went and took a part-time job at MITS too after they formed the agreement.

Do you think its better to "find" a co-founder or hire somebody as first employee?

PG states that the idea number is 2 co-founders, but I'm still looking for a co-founder.

Interesting - any place I could read about the reasons? Thanks!

http://ycombinator.com/faq.html

Other reasons:

A founder may not work out, once he's got stock that's a lot harder to resolve (if you didn't include a vesting cliff, for which, again, there are reasons for and against).

Founders may find that they can't work together after all (personal differences).

There are a lot of things that need to 'find their place' when you start a company, and in my experience you only really know your relative positions after a couple of months of collective hard work.

Setting things in stone early can be problematic, costly or fatal.

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