How to Incorporate a Fundable Startup

This article explains how to incorporate.

First, and foremost, please consider hiring a lawyer to help you. It could save you a lot of money in the long run.
Even an online lawyer like LegalZoom and RocketLawyer are much safer options than doing it yourself.

The information below is provided to help you do it yourself (if you really want to, but not recommended) and at least to understand the process.

So, first, why incorporate?
The short answer is to provide you with some legal protection in the event of bankruptcy or lawsuit. Incorporating can help protect your personal assets, if you do it right!

So, what is the right way?

To keep it simple, let’s assume you are a startup that will eventually want to raise funds.

In this case, you should choose a C-Corp or S-Corp. Professional investors prefer to invest in corporations that are C-Corp because the laws and paperwork are standardized, and future acquisition and IPO are possible with this entity type.

Here is the difference between a C-Corp and an S-Corp:
C-Corporation – a normal common company, like you already know of.
* Has stock.
* Has Articles of Incorporation ~ filed in a State where the company is “born”
* Has a corporate shield for liability.
* Must file and pay corporate taxes
* Does not pay corporate tax. (but still files forms)
* All profits flow to shareholders and gets taxed on owner’s individual income statement
* Requires less than 100 shareholders and 1 type of stock.
* Has a corporate shield for liability.

How do you incorporate then? Simple! Get a lawyer, or….
Fill out your own “Articles of Incorporation” in your state or perhaps Delaware.

Can file in any state, most common = Delaware
Costs $89 (must fax) + Annual Registered Agent Fees
Why Delaware?
Because they built a reputation to make it easy & have a history of it.
Their laws are also quite common and accepted in all states. “Delaware Law”.
The downside, you will need to pay a “registered agent” in Delaware to forward your mail.

Your home state is also a good choice, you can be the registered agent.
In my case, Texas: Costs $300 (no annual fee)

An S-Corporation is simply an extra form of C-Corporation. To elect as an S-Corporation, you send an extra form to the IRS:

Financial Models For You

Several Venture Capital firms, such as S3 Ventures here in Austin, provide downloads to, in my opinion, rather complex financial modeling spreadsheets to help you get started.

I have my own version of this and it’s much simpler to work with (in my opinion).

In fact, I have three versions:
One version for “online sales“.
Another version for “subscription sales“.
And a final version for “sale-person sales“.

These three should be modifiable for most business models.

Have a model that you’re not sure of? Leave a comment or shoot me a message, and I’ll be glad to help you think it through.

Want those complex models from S3? I’ve saved them here.

Three reasons it’s okay not to follow your dreams.

Those of you who know me, know that I am being facetious. I really do want you to follow your dreams, succeed, and live an awesome life. Put me in coach!

That said, I think there are actually real, serious reasons to sometimes not follow your dreams. If one of these reasons applies to you, I give you permission to take the easy way out and not work hard, not take risks, and/or not care. For the rest of you, what’s stopping you? Seriously, what is stopping you? No, really, tell me, hit my contact form and tell me, and I’ll see if I can help.

So here is the three excusable reasons.

1.) You are sick or a close loved one is sick.

It’s sad, but it happens. If you need to take time off from chasing your dreams to care for yourself or a loved one, I’ll give you a pass. Better yet, you can give yourself a pass. It’s totally understandable and acceptable. Hopefully there will be time in the future to chase your dreams, but putting them on hold now is okay by me.

That said, it’s my opinion that having children doesn’t “always” qualify. I mean once they hit a certain age, they could even help you achieve your dreams. Enlist them in your dream. They could help you study, help you make fliers, or help push you to keep going. Use that energy! Of course, kids get sick too, and that takes priority. Don’t get me started on babies!

2.) You are in school or serving your country.

Listen, civil service is important. I’ve done a little (not as much as I would have liked) serving as a civilian contractor to the Navy. That said, I applaud and appreciate the men and women of our armed forces, and yes, even the politicians.

If you are deployed or otherwise it is illegal for you to pursue your dreams, I’ll give you a pass for now. It’s only a respite, you’ll be back in country soon enough, and it’s never too soon to start working on your dreams, even while you are serving.

If you are in school, that needs to take priority. That said, why are you in school if not pursuing your dreams. You don’t really get a pass; I challenge you to study, and study some more. Study what will help you achieve your dreams (plus your other required boring classes). Be sure your major relates to your dreams or is part of your pathway.

3.) You are struggling to feed yourself or your family.

Yes, the struggle can be real. If you’ve never had to live off of food stamps or welfare, you might not understand, but it is real. As a child, my family was here. My mom and dad both would take any job, apply to everything and accept anything, that would help keep the family fed. They literally had concerns about our next meal, if we could pay rent, and if we would survive.

That said, most of us are not here. We have family to help us, we have friends who will take us in. We can get a job, especially if we are able and willing to move.

I know you are expecting me to say, if you are struggling to feed yourself or your family, you get a pass on chasing your dreams. You don’t.

Dreaming can be done with no money. While you are looking for a job, you could be going to the free library and learning to code Python. Chasing your dreams is possible, although, understandably, I give you permission to take that intermediate job to take care of you and your families needs. But while you have that temporary job, keep seeking, keep dreaming, study on. Don’t give up.

For most of the rest of you, having a “low” bank account, or “not being able to buy a house yet” are not valid reasons not to chase your dreams. If you are “struggling” but have food on the table, then, no, you don’t get a pass. Get to work! Keep on struggling WHILE chasing your dreams. It’s achieving your dreams that will get you out of the struggling phase. After all, chasing your dreams IS struggling.

So, that’s it, if you don’t have one of these three reasons, I challenge you, what’s stopping you from chasing your dreams, right now? Tell me.

Never say no to an offer you have not heard.

What if that job you proactively turned down was actually going to pay really well, or be an offer for a position above what was listed?  If you say no before you get any offer, you could be shooting yourself in the foot.

This is for startups too.  Why say no to an investor you haven’t heard back from? Why say no to an idea you haven’t heard yet?

All too often, I am in meetings where the leader of the meeting is in a rush, or can’t possibly imagine that someone else’s idea could be better in any way… so they don’t bother to ask or listen to other opinions.  This is the path to failure: of our team, of your company, heck, you may just be alienating yourself right out of any friends you think you had.

Stop. Listen. Be OPEN to new ideas.  It’s the least we can do for each other as humans.

10 Good Startup Ideas for 2017/2018

It’s that time of year again. Time to start a new company! No, not me, not yet… I’m still working on, which by the way just made some real money last week (our first time asking for money generated about a 2% conversion rate).

Nevertheless, here are 10 Good Startup Ideas for 2017/2018… according to, well, me.
Why are they good, you might ask?
“Why are they good Dr. Beverly?”
I have no idea if they are actually good (e.g. will generate sales), which is how I usually determine goodness… but…
These ideas seem: a.) to solve a real problem. b.) to be easily testable c.) to be scaleable and d.) be able to have something that is protect-able.

Here they are, steal them please!

1.) Solar Computers
2.) AI for exercise/fitness (maybe even a martial arts bent to it)… the AI personal trainer.
3.) Solar Bike
4.) AI for price-matching
5.) Solar Gameboy
6.) AI for research (market research, topic research, searches, etc.).
Okay, here is a few more…
7.) VR Cafe / Gym
8.) Smarter Microwaves
9.) VR College
10.) Smarter Dishwasher

More themes? Well, yes. 2017/2018:
AI is exploding
Solar is burgeoning
VR is popping
and Smart is here to stay.

Get crakin’
Oh, and please buy my new book… Lean Startings – a novel about the life of a Lean Startup

Austin Ride-sharing is a micro-monopoly

Regulation in Austin, TX is preventing a free market to exist for ride-sharing. The best companies (Uber and Lyft) cannot compete here because of an onerous regulation put over the town like a dark cloud. Dark indeed, for it creates a micro-monopoly for Fasten and RideAustin, who by their strangeness (and willingness to operate more like a cab company), are allowed in Austin.

I was recently quoted on NPR radio on this topic, and I argue that this micro-monopoly is the only reason they can compete in Austin right now. This monopoly does not exist outside of Austin (except a few other weird cities). As a result, for Fasten or RideAustin to work beyond Austin, they would have to compete in the “REAL” market against Uber and Lyft.

A monopoly gets established whenever there is regulation, unique capability, or brute force creating a disturbance in the natural order of modern economic forces: e.g capitalism. In fact, monopolies are the opposite of capitalism which emphasizes the concept of creative destruction to encourage entrepreneurs and what today we call “startups” and we once called “business” to flourish and compete against each other.

The loser in this war is the consumer, and always is. We are forced with sub-par ride-sharing experiences and higher prices. That’s what happens in a monopoly.

So… catch a ride; kill monopoly! Compete without a monopoly and you will find there are bigger markets than just Austin, waiting for you to come help.

Rural Ride-sharing anyone?

The amazingly good feeling of shipping.

Do you like to check boxes?  I sure do. Recently, I started using trello to organize and run scrum/agile at the Texas Venture Labs.  We all love scrum and I can tell you why: it feels good to ‘move a ticket to done’, e.g. to check the box.  Done.  Shipped.  Over.  Fini.

What else is done? My book, Lean Startings, is done!  I shipped it yesterday 3/16/2017.  To Amazon.  It’s available now for Kindle ($9.99) or Paperback ($24.99) on Amazon.  It feels oh so good.  Ahhhhh, shipping!

So, how did I do it?   How did I write a book while raising a family, working full-time, and working on my own startup?  The same way that I got my PhD while working 2 full-time jobs and raising a family: persistence and daily progress.  In fact, I broke the book down into 36 chapters, and wrote a chapter a day, skipping weekends.  I finished the book in about 3 months (a few days I was traveling and couldn’t write).  Yep, in one summer, I created something, something that could help people succeed in startups better than ever.  Along the way I got to check 36 boxes (each chapter), and just now, the final checkbox (shipped!).  Shipped is the best one to check by the way, and I’m only sad I didn’t check it sooner!

So, what are you sitting on that you could ship?  Don’t wait for perfection, ship it now.  You can always revise it later.


(My reward yesterday for shipping was: gaming, beer AND bourbon)

p.s. Got feedback on my book? I welcome it here or directly to me by email.

Finding Product Market Fit

The idea of product market fit is actually pretty obvious.  What it means is that your product (or service) fits a need in the market (or target market), and you found it because you are getting traction (or sales).

For you tech minded folks (like me), here is a formula for you:

fit = traction(product)

So, what is traction then?  The easiest way to measure traction is by sales.  If you can get sales, you have traction.  How much?  It depends on the amount of effort and cost associated with getting the sale.  The easier the sale (and happier the customer) the more traction you have.  Sales is not the only way to measure traction.  You could measure it by ‘free trial subscribers’, by ‘letters of intent’, or even by ‘customer surveys’.  However, sales with positive customer feedback is the highest level of traction.

So, go out and get some.  Traction that is.

And this book is a great place to learn how to do that: 


Harlan’s New Blog!

Hello and welcome to my new blog!  I will be importing most of my old blog articles into this new blog site, but the original blog is also still alive at

Why did I create this, well three reasons actually.

1.) I am experimenting with multisite wordpress for my classroom purposes.  I needed a site that could be used with all the real wordpress features for my students.  So I created this wordpress multisite account.

2.) I am looking to expand my consulting practice, so I’m setting up new pages here to describe the various consulting that I do.

3.) I wanted more control over my own blog too.  Blogger had become too restrictive of late, so here is this new platform: wish me luck!

Thanks for stopping by,


Harlan T. Beverly