questions for a discussion with MBA students about qw3ries registration options

1. qw3ries’ questions about registration
What is qw3ries’ funding plan?
TBD, but one likely path:
- a small amount of friends and family funding to prototype and validate the
business model
- $1M in angel funding, maybe not all at once, to get the business to profitability
- $10-50M in angel and corporate funding to scale the business (depending on
hardware needs). Comparables: Quora has the magic describes their funding:
$11M at $86M valuation before they were even in open beta; Announcing Stack
Overflow Series A Financing and All-Star Team Backs Stack Overflow has their
experience ($6M with no monetization plans, undisclosed valuation); Blekko has
raised about $25M
Questions I have
Where should qw3ries incorporate?
• With domain seizures and the government threatening Amazon over Wikileaks,
should qw3ries be a US corporation? See TorrentFreak’s recommendations
• In the US, what are the tradeoffs between Washington (where I currently live),
California, Delaware?
What kind of a structure should qw3ries have?
• qw3ries wants to leave the doors open to stock options and institutional
investments, so is a C Corp the only option?
• What is gained by a Zappos-like structure (a holding company owning the stake
in the corporation)?
• Are there advantages to being a Benefit Corporation?
• We will want to share ownership broadly – for example, .1% for each of 42
advisors. How does this play into corporate structure considerations?
When should I incorporate?
• qw3ries will want co-founders, and haven’t identified them yet. If we incorporate
now, will that cause tax events and other complications as they join? Conversely
if I wait what risks and problems does it create?
What is the best way to give 501c3 non-profits an ownership stake?
• Are they allowed to hold stock or options?
• Suppose I want to start up a foundation qw3ries.org. What should I be thinking of
at registration time?