swampthing

If you have a non-US founder, the safest thing to do is to at least seek the counsel of a startup attorney. There are a lot of online services out there that purport to be designed for non-US founders, but they don't really do anything special other than make it easier to get EINs, bank accounts, etc. That stuff are annoyances, but not really what makes the non-US situation difficult.

And no online service, from what I've seen, can safely handle a subsidiary relationship like what you're describing. I would really advise against trying to do that on your own without an attorney.

It could very well be that you can still use an online service like Clerky for parts of your setup (especially since we have tools for working with attorneys), but someone good needs to do the legal analysis to see if that's the case, if anything else needs to be done, etc.

Clerky is the most popular way for high-growth technology startups to form, and we're also used by tons of top-tier startups for hiring and fundraising. We're launching powerful enterprise-grade software to helping attorneys and companies collaborate. We've invested a lot in architecture, maintainability, and testing, giving us a significant advantage as we build out functionality that founders and attorneys can currently only dream of.

We could be a good fit for you if you're interested in working at a startup (1) without the chaos of a move-fast-and-break-things environment, and (2) that's profitable but has tremendous growth potential.

To learn more and apply, please visit https://cler.ky/3uKADqh. Thank you!

If you’re anywhere close to taking your company public, you should have attorneys that can help you with preparing for that and point you to whatever information you’re looking for.

At the time of investment, good VCs typically don’t care about any one investment enough to put much effort into fleecing you. My experience is that good startups aren’t at any significant disadvantage in terms of attorneys. Just make sure to get a good one that has done a lot of financings.

To answer your first question, dilution has little to do with how you structure the equity and more to do with the price at which you sell it (and how much of it you sell). The more your company is worth, the less you will need to sell to raise the same amount of money.

Can I ask how you were able to determine there was scar tissue? Was it just someone feeling it out or did you get an MRI?

I'm not sure if this will help, but the Company Lifetime Package covers all the same products as the Pay-Per-Use Plan (other than some third-party fees). The Company Lifetime Package is the better deal for most startups, but we have the Pay-Per-Use Plan for startups that are not quite sure how fast they will be proceeding and are more cash-constrained.

As for what products you will need, at some point, just about every startup will need all of the products we offer. Since you asked about post-incorporation setup and foreign qualification, here are a couple articles we have on how to decide if you need to do them or not:

* https://help.clerky.com/article/1730-is-there-a-deadline-for... * https://help.clerky.com/article/1731-must-my-delaware-startu...

Hope this helps — feel free to reach out if you have any more questions, of course.

I'm not sure who else you're referring to, but I'm certainly not upset at the clearinghouse. I just don't think it's fair to blame Robinhood for not having the cash on hand to meet the unforeseen increase in deposits required.

> > In this particular case, I think you can look to the fact that IB, TD Ameritrade, Charles Schwab, etc. also had to restrict trading.

> They did exactly what I think RH should have done; tighten or restrict margin trading on GME and put option trading on GME into liquidation only. When volatility starts to grow out of control, it's the brokerage's responsibility to start restricting customer leverage in these instruments, if nothing else for the broker's own protection.

I don't disagree with you on that. It's not obvious to me that Robinhood over-leveraged itself though. If you are seeing some reporting on this that says otherwise, I would love to see it.

> > I am not sure why you think this is attributable to margin trading, other than the fact that Robinhood offers margin trading.

> Because margin trading is literally designed to allow traders to take larger positions than they could otherwise afford. This both increases the total net position that RH customers have and it reduces the total cash that RH has on hand compared to the number of trades, since part of the money is literally loaned to the trader by RH. This isn't a big deal when the positions net out close to zero, but it can be disastrously bad when all your customers start trading in one direction. Example. Without margin if I were to buy $2,000 worth of GME, I have to actually hand $2,000 over to RH. The worst case deposit requirement that the clearinghouse can ask from my position is $2,000, and thankfully I've given that amount of money over to RH. But RH would also let me buy $4,000 of GME on margin. Not only has their worst case deposit requirement gone up to $4,000, but I have only given them enough cash to cover half of it. Part of the responsibility of a broker is to keep an eye on what trades are done on margin to avoid too large of a net position from building up for this exact reason, and to do things like adjust margin requirements to prevent this kind of thing from happening to them.

Right, I know what margin trading is, but that is a good summary. I'm just not sure how you can be so confident that the proportion of margin trading to non-margin trading was high enough that we can attribute most of the problem to the margin trading.

> > If it was in fact margin trading that was causing the problem, why would Robinhood limit buys in general, as opposed to just limiting use of margin?

> They limited buys because they literally couldn't afford the deposit with their clearinghouse. Sells don't require a deposit, naturally. I believe if they'd taken steps earlier in the cycle to limit margin trading RH would have had more cash on hand to meet their deposits and allow customers to keep buying GME, but not on margin. You'll note that other brokerages did limit margin trades of GME specifically, as well as putting GME options (another way to increase leverage) into liquidation only mode. This clearly signals that the other brokerages thought that decreasing leverage in GME was a good idea. Maybe RH should've done the same earlier?

That's exactly my point. If the margin trading was the primary source of problems, it seems like RH would have just limited margin trading instead of limiting all buys (whether on margin or not). Doesn't the fact that they didn't make this distinction suggest that the margin trading wasn't a disproportionate factor?

> > I think the likely explanation for why other brokerages did not have to raise additional funds is because they have a much smaller percentage of customers purchasing meme stocks.

> That is certainly part of it, sure. This goes back to "Gamifying stock market trading is a bad idea". But you also can't ignore that the other brokerages seem to have universally taken steps specifically to unwind the amount of leverage their customers had in GME, all steps that RH didn't seem to do until their clearinghouse forced them. If TD Ameritrade and similar were moving in to stop the GME bubble when they didn't even have the majority of the meme traders, doesn't that imply that RH should have done something far earlier?

I've admittedly read up far less on the other brokerages than I have on Robinhood with respect to the Gamestop stuff. Has it been reported that the other brokerages did not restrict trading due to the same increased DTC deposit requirements? I had just assumed it was due to that, but it sounds like you are pretty sure it wasn't.

I would strongly disagree with that statement. Just because something is specifically identified as possible doesn't mean that it isn't "out of the blue" when it happens. That depends on a variety of circumstances. In this particular case, I think you can look to the fact that IB, TD Ameritrade, Charles Schwab, etc. also had to restrict trading.

>Which is why you don't let yourself get into this situation. You'll note that other brokerages did things like raise margin requirements on GME, block margin trading on GME entirely, or stop trading on GME options. These are tools that brokerages have available to them to both cool off the market shift the burden of margin requirements onto their customers. Other brokerages did this specifically to avoid ending up in RH's position, which is why RH had to raise more money and they did not. RH either did not have these controls in place, or they waited far too long to use them

I am not sure why you think this is attributable to margin trading, other than the fact that Robinhood offers margin trading. The deposit requirements that are at issue here are independent of whether the shares are purchased with margin or not. If it was in fact margin trading that was causing the problem, why would Robinhood limit buys in general, as opposed to just limiting use of margin? I think the likely explanation for why other brokerages did not have to raise additional funds is because they have a much smaller percentage of customers purchasing meme stocks.