[HN Gopher] Stripe Atlas: the first five years and 20k startups
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Stripe Atlas: the first five years and 20k startups
Author : tosh
Score : 167 points
Date : 2021-07-01 16:20 UTC (6 hours ago)
(HTM) web link (stripe.com)
(TXT) w3m dump (stripe.com)
| prospects wrote:
| Really interesting report -- would love to see more like them
| from other companies.
| tiffanyh wrote:
| > "Since then, over 20,000 businesses have started with Atlas and
| have generated over $3 billion in revenue"
|
| This is an interesting stat. I realize the math isn't this simple
| ... but that implies the average revenue one of these businesses
| generated over the course of the last 5 years is _$150,000_.
| patio11 wrote:
| It's fascinating trying to get a good grip on how to capture
| the health of a portfolio in summary statistics. (I coded the
| dashboard to do this back in the day.)
|
| Average probably is not it, because of the distribution of
| startups along the power law and the mix in the Atlas userbase
| between companies which are aiming for that trajectory and
| those that are aiming for profits/predictable revenue growth.
|
| Also, FWIW, since half of Atlas companies are post-covid the
| naive calculation of revenue run rate is a bit understated.
|
| For folks who geek out on this sort of thing, we're hiring and
| my dashboard could very much use an update, plus there is much
| more important work to be done as we ship an ambitious roadmap
| for this coming year and beyond. jweinstein@stripe.com if you'd
| like to discuss; Jeff runs the group Atlas is in.
| NhanH wrote:
| I would not be surpised if more than half just flopped and the
| median is somewhere close to a million dollar over 5 years
| htrp wrote:
| We should get one of the stripe guys in this thread to give
| us some ballparks
| edwinwee wrote:
| We don't have great visibility into businesses becoming
| non-operational (they can become dormant or close up shop
| without notifying us). But in our analysis of the revenue
| from their Stripe accounts ($3B!) and public funding data
| (both data points, to be honest, are conservative, since we
| can't totally 1:1 match with duplicate accounts, different
| names, etc.), we can estimate that the number of Atlas
| businesses shutting down is small--and even smaller when
| compared to the overall startup scene.
| jedberg wrote:
| Probably one of the businesses generated $500M and the rest is
| a very long tail, if startup power laws are to be believed.
|
| But still impressive none the less!
| ascales wrote:
| Used Atlas to incorporate and they helped correct mistakes that
| were made on both ends, was really nice having an actual person
| to talk to. Also had a deal for reduced fees which made it even
| sweeter. There were a few UX things that I wish were more clear
| initially, but they went above and beyond to fix them. Previously
| used LegalZoom for a 501c4 which was an experience I don't really
| recommend. It'd be nice to see some more options for different
| kinds of businesses. Kinda crazy to see how many companies
| they've incorporated yet still were able to offer really good
| support.
| devops000 wrote:
| the problem is how to be complaint with local law if you are a EU
| citizen and open a US company. You need to be careful to avoid be
| incriminated for tax evation
| eloff wrote:
| I don't think that's the problem here, Russia is not part of
| the EU. It might have to do with additional risk of fraud and
| criminality as well as risk to stripe if they deal with a
| sanctioned entity.
| pyb wrote:
| Were they not closed to non-US people?
| sparkling wrote:
| Anyone* can own a US company, you don't need to be a US
| citizen. However this usually creates some legal headache since
| most countries have strict controlled foreign corporation (CFC)
| rules. So if you are living in France and use a service like
| Strip Atlas, french tax authorities will probably make the case
| that the company is being managed from France and is therefore
| liable for french taxes on a corporate level.
|
| * excluding embargoed countries etc.
| danpalmer wrote:
| Atlas looks fantastic for starting a US company, and it makes
| sense that Stripe would start with US companies.
|
| Are there other types of company in other countries that may be
| better fits for certain reasons? Are there countries/types that
| would work better for say, non profits, charities, or financial
| institutions? I wonder if Stripe is building or considering a
| more diverse range of options for Atlas.
| [deleted]
| patio11 wrote:
| (I work at Stripe and have worked on Stripe Atlas.)
|
| We're always on the lookout for more ways to support the growth
| of the Internet economy, and have been looking in detail at
| which entity types and "hubs" would unlock the most opportunity
| for our users and for people who we talk to. As always, we'll
| announce our work here when/if it is ready to be used.
| Jake232 wrote:
| Have you started offering foreign owned LLC's again via
| Atlas? The last time I checked this wasn't possible sadly.
| tiffanyh wrote:
| Hi Patrick
|
| My # one needs isn't related to Atlas per se (but I can see
| how all Atlas users need this), I love you're acquisition of
| TaxJar and release of Stripe Tax. But it only solves 1/2 the
| problem. I need an easy way to make tax payments to the
| appropriate regulator (e.g. Merchant of Record service). Hope
| that is in the works.
| patio11 wrote:
| We hear you, and are hard at work on making taxes easier.
| Moving money around is very core to what we do, and money
| movements between companies and tax agencies are one of the
| largest funds flows for companies subject to that sort of
| regime, so you can make some very plausible assumptions
| about our level of interest in this area.
| cblconfederate wrote:
| Eu countries, especially the low tax ones each have benefits
| for different types of companies wrt to intellectual property
| law or finance. Ireland Malta cyprus estonia bulgaria
| Luxembourg have hundreds of companies that offer off the shelf
| company formation
| motives wrote:
| This is probably a somewhat cynical take, but Stripe Atlas' US
| only offering is a big contributor to international startup
| brain drain which is costing local economies significantly.
| When countries (such as within the EU, India or South America)
| invest so much in the education and development of young
| entrepreneurs, only for them to leave to the US for the allure
| of quick investment, all of their potential future value leaves
| with them. I understand there is a lot for these countries to
| do to improve investment conditions for high risk startups, but
| how can poorer South American countries (like those in the
| Stripe promo video linked) compete with the US in terms of the
| availability of capital? This is not solely Stripes fault,
| though in my opinion by promoting Delaware parent companies for
| international founders they contribute to the hindrance of the
| local tech economies of these countries.
|
| I'd like to reiterate that this is a relatively uncharitable
| take, and would welcome alternate perspectives on this issue.
| austinkhale wrote:
| While availability of capital is (in my experience) critical
| in the decision for South American startups to create a
| Delaware C Corp, another overlooked piece is the amount of
| bureaucratic hoops you're forced to jump through elsewhere.
| Founders (again, my anecdotal experience) want to focus on
| building their business. The US system is far from perfect
| but it's the most streamlined & has a clear path laid out for
| scaling. The US system is onerous at best but it's one of the
| best relative to others.
|
| Ultimately, if you make things harder for entrepreneurs, they
| will find an alternative. Atlas makes things easy & actively
| looks for more way to remove obstacles. It's a no-brainer for
| people wanting to focus on building and not tax entity
| structure.
| patio11 wrote:
| While some Atlas users are internationally mobile, the
| dominant use case for Delaware entities is to give you a
| convenient box the system knows how to interface with while
| you live and operate your business wherever you live and
| operate your business. This is true for foreign and
| U.S.-based owners of Delaware entities.
|
| One of my favorite Atlas users, Meitre in South America, has
| this tagline on their site: "Proudly born in Uruguay. Made
| with love in California" Much of their business is in South
| America; they went on (after incorporation) to through YC,
| raised from A16Z, etc. I think their experience is a userful
| counter to the standard narrative about brain drains, because
| that business is _very thoroughly_ South American _and also_
| a first-class participant in the SV ecosystem.
|
| Anecdotally speaking, a lot of the Atlas companies I'm aware
| of which raised money raised it either primarily locally, a
| mix of local and Silicon Valley, or "extremely widely
| distributed."
| motives wrote:
| Thanks for the response, it seems my initial take was
| indeed unbalanced and hadn't factored in the potential of
| geographically distributed raises which benefit the
| founders local territories whilst bringing the benefits of
| significant US capital.
| cblconfederate wrote:
| The whole system seems set up to funnel money and value one
| way. The most likely countermeasure will be ICOs
| aliljet wrote:
| Having now joined this list of 20,000 startups to create a
| Delware C-corp, I can say with certainty, there is a lot of room
| to improve the process of tracking a company after creation. The
| path presented by Stripe is almost deceptively easy at first
| which leads to a stunning amount of work shortly thereafter. This
| is, per normal with Stripe, a beautiful integration of the real
| world and technology, but I'm hopeful there's more of a full-
| lifecycle version of this system, even something that would help
| me drop my C-corporation in the future. If there was ever an
| opportunity to compete with Stripe, the startup that gets Atlas
| done across a full-lifecycle (even just a happy-path full
| lifecycle) would add tremendous value to startup ecosystem.
| jordanmorgan10 wrote:
| I.....must be missing something. All I keep reading are "Atlas
| got me close but I still had to do X or Y".
|
| I formed an LLC in Missouri and it was like one or two forms. It
| was criminally easy. I paid taxes and ran the company for about
| five years, and last year it was acquired.
|
| So, I say all that to show it ran the full gamut of being a
| business. What is everyone else doing that's so hard and takes
| more steps? It due to employees and the like (my LLC only ever
| had me, to be fair).
| count wrote:
| Are you sure you were fully compliant with Missouri and your
| localities laws? I did everything myself for the first 2 years
| with a similar experience, and then discovered after hiring an
| accountant that there were entire other taxes and fees and
| things I was supposed to have been filing and paying (even if
| they were $0 due kind of things). Its criminally complicated to
| actually be compliant with everything, EVEN WITH paid
| professional support.
| d4mi3n wrote:
| From what I've dealt with so far, two things complicate this
| process:
|
| 1. Hiring any employees in addition to yourself.
|
| 2. Incorporating in a state different than the one you operate
| in.
|
| Things are _much_ simpler if you don 't do either of those
| things.
| austinkhale wrote:
| We really _wanted_ to use Stripe Atlas for our startup but ended
| up using Clerky for various reasons. Neither will get you all the
| way to the goal line, but both give you a damn good start. You'll
| end up finalizing some things with your accountant / legal
| counsel.
|
| That being said, Atlas is getting closer and closer to closing
| all the gaps. Excited to see what they're able to accomplish in
| the next 1 - 2 years. The onerous process (easier in the US than
| others, but still not easy) inhibits innovation and the easier
| things become the more folks can focus purely on creating value
| in the economy.
|
| A really big win in the space recently was the temporary approval
| for electronic submission of 83(b) paperwork. The more things
| like that occur (and become permanent) the better off we'll all
| be.
| swman wrote:
| Sorry for the stupid question, but how exactly do I find a
| lawyer to help me with this stuff? I tried to Google some
| lawyers in my area, but I don't even understand what type of
| law to focus on, or if there's some online service? I've never
| sought a lawyer service before ..
|
| For example, I want help with a privacy policy and T&C. I made
| a draft of both after looking at like a dozen similar apps and
| looking at what they cover, but now I want to find a lawyer to
| take my rough draft and make it legitimate so I can use it on
| my website and apps.
|
| FWIW I have no entrepreneurship background in my family so I
| have to ask around like this even for my dumb questions
| (thanks).
| monknomo wrote:
| Bar associations will give lawyer recommendations
| TuringNYC wrote:
| I know this sounds snarky but it is true -- when i've spoken
| to three separate small business lawyers on what is required
| i received three different answers, with about 70% overlap
| across the three. I actually wonder if there is _any_ right
| answer for a small business on a budget.
| mrkurt wrote:
| It's not a stupid question. The simplest is to look for a
| "business lawyer" and then ask them about their experiences
| with businesses like yours
|
| But also, don't overestimate what a lawyer is going to do.
| They're not going to make your docs legitimate, but they will
| spend as much time as you want to pay for working on them and
| telling you the risks.
|
| They _will_ frequently be able to get you started with docs
| like that, though. If they've done the work before they'll
| have a ready to go draft for you.
| swman wrote:
| Thank you, thank you! I found some more results now with
| that term.
|
| Appreciate the insight as well.
| d4mi3n wrote:
| I set up an LLC via Atlas. The process was simple, but there's a
| lot of legwork at the state/city level that they don't do and
| you'll need to be prepared to do yourself.
|
| Atlas does not remove the need for an accountant, or a lawyer, so
| either budget that in if you're thinking of forming an LLC.
| cweill wrote:
| I'm not sure why you're being downvoted. I went through the
| same process to create an LLC, and while the process was simple
| enough, once I had my attorney look over it, I realized that I
| needed to make changes that Atlas would not accommodate on
| their boilerplate. So instead I used a different, more
| established company to form the LLC.
| an_opabinia wrote:
| Both you and the parent describe my experience.
|
| If I ran Stripe I'd acquire CorpNet (and Gusto and TaxAct
| while we're at it) to make a complete C Corp package.
|
| Ironically if you go to a typical small town venture lawyer
| you get copy and pasted docs anyway.
|
| I don't know if it reassures you but for 99% of people the
| docs never become an issue. They could be literal chicken
| scratch and for the most part things will be okay. This is
| really why the Atlas product works.
| _e wrote:
| Good legal documentation is an insurance policy. You never
| want to use it but it is vital when something happens and
| you have to refer to it.
| htrp wrote:
| When you're first starting out, you can cut it with chea
| boilerplate insurance (and legal docs), but at some point
| you graduate to specialized commercial insurance.
|
| The difference is that you never do this with your legal
| docs for whatever reason.
| sireat wrote:
| What kind of legwork would be required for a European to set up
| LLC via Atlas?
|
| I thought the idea was to let Atlas do everything?
| d4mi3n wrote:
| As I understand it, Atlas does a few things:
|
| 1. They automate the process of establishing an LLC within
| the US
|
| 2. They provide a lot of boilerplate legal documents
| (formation documents, tax registration, etc).
|
| 3. They partner with banks and legal services to get Atlas
| customers a discount on auxiliary services (layers,
| accountants, business bank accounts).
|
| There may be more to it than that, but that's all I've seen
| of the service thus far. My incorporation needs were pretty
| simple and I'm already a Stripe customer, which was the main
| driver for me to try out Atlas.
| martinald wrote:
| As a UK person it seems insane this is even a thing. It
| takes PS12.50 and about 5 minutes to set up a limited
| company here via a pretty slick govt process. The govt
| provides boilerplate legal documents and automatically sets
| up the tax registration.
|
| When it comes to filing yearly accounts the govt site for
| companies turning over less than around $1m automatically
| files the accounts for you and works out your tax
| liability.
| mixmastamyk wrote:
| Do you mean tasks such as setting up a mailbox and registering
| with the big city you may live in?
| d4mi3n wrote:
| Additional stuff I needed to do after forming an LLC. Note
| that I incorporated in Delaware and operate in California,
| which added some additional requirements I would not have had
| if I incorporated in the same state I operated in:
|
| 1. Acquire a certificate of good standing for my LLC from the
| Delaware Secretary of State.
|
| 2. Register with the California Secretary of State as a
| foreign LLC (out of state LLC), which required the
| aforementioned letter of good standing.
|
| 3. Acquire a business license from the city my LLC operates
| in.
|
| 4. Pay a franchise fee to the California Franchise Tax board.
|
| 5. Figure out what other fees I'm on the hook for. I wasn't
| able to figure this out on my own and am currently working
| with an accountant and lawyer I found after incorporated to
| help me do this correctly.
|
| There's probably going to be a few other odds and ends. I
| operate out of my home and only employ myself, which saves on
| a lot of other paperwork and logistics I'd need to sort out
| otherwise.
| asdf333 wrote:
| i wish there was a service that would just tell me what
| fees i needed to pay. this was a big pain in the butt and
| most of the value i paid for for professional help.
| ryanSrich wrote:
| There's a lot of extra legwork with Atlas even outside the
| extra state level work. We essentially had to hire a lawyer to
| redo or to create a lot of the documents we got from Atlas (IP
| agreements, employment agreements, etc were all not adequate).
| I mean it doesn't even handle beneficiary signatures for stock
| agreements correctly. Just overall seems like a half baked
| product - either that or our business just wasn't a fit
| (typical VC backed startup).
| edwinwee wrote:
| Hm! Curious to hear more about what had to be re-done. (Sorry
| that caused you work.) Could you email me at
| edwin@stripe.com?
| edwinwee wrote:
| (Edwin from Stripe here.) Yes, Atlas right now is designed to
| start a company--but it's a not a complete replacement for
| lawyers or bookkeeping! When a business is started with Atlas,
| we provide legal guides and templates for the typical next
| steps after incorporation, and a free consult with a startup
| attorney. We have a growing network of lawyers and accountants
| who work with Atlas businesses (and provide their services at a
| reduced rate for them). That said, we've some things in the
| works on both of these fronts to further reduce legwork.
| nowherebeen wrote:
| > That said, we've some things in the works on both of these
| fronts to further reduce legwork.
|
| Care to share around when that will come out?
| edwinwee wrote:
| Nothing solid yet, but can you email me at edwin@stripe.com
| and we can stay in touch?
| therusskiy wrote:
| Would be great to see in Russia. Technically it's open for
| Russians, but it's a common knowledge that 99% of requests get
| denied. I wonder if it's the same for some of other countries
| where Atlas is "open"...
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