The official start date for your startup is the date you incorporate the business. This is obviously important for tax purposes, but may also dramatically influence how potential investors, customers, and competitors look at you.
My rule of thumb expectation is that it should take two months to set up the legal entity, six months to finalize the business plan, and by the end of the first year have a prototype product ready for customers. At this point every potential investor will listen. Timelines which vary dramatically from these will be questioned, and need to have good explanations.
For time and effort considerations, I tell clients that a sole proprietorship or partnership is the simplest setup, because it basically requires no legal forms. Incorporation as an LLC, a C-Corp or an S-Corp is more complex, but has the great legal advantage of limiting liability to the entity, away from personal assets.
To read the full, original article click on this link: Startup Professionals Musings: Startups With Timely Action Get Investor Traction
Author: Martin Zwilling
