Startup Legal and Accounting

Kirsty Nathoo and Carolynn Levy's lecture is about startup mechanics founders should understand enough to avoid expensive mistakes, without letting mechanics become the company-building focus.

Formation and paperwork

• Keep formation simple and standard; YC's default is a Delaware C-corporation because investors, lawyers, and employees understand it.
• Assign founder IP and inventions to the company.
• Keep signed documents organised and accessible.
• Avoid clever structures that create diligence problems later.

Founder equity

• Execution matters more than the original idea.
• Equal or near-equal founder splits are often simplest when all founders are equally committed.
• Vesting protects the company if a founder leaves.
• Founders should make explicit decisions about roles, control, and long-term commitment early.

Operating hygiene

Legal/accounting basics also cover fundraising documents, employee vs contractor issues, option plans, payroll, taxes, bookkeeping, and board/investor records. The point is not to make founders amateur lawyers; it is to keep the company fundable and clean.