Hi Geoff and Patrick
Thanks for your answers!
Regarding the questions,
1. *Why do you have an LLC if you're not running anything through it? Is
it a work in progress thing you have plans for in the future? Are you
filing any returns with the IRS and Delaware for it now?*
It's a work in progress thing. I have had a bad experience (read: nightmare
of paperwork for little to no return, but that was also the 'fault' of
market changes during the mess of it all) doing an equivalent in NZ, as
their overseas-registered companies legislation/regulations are a nightmare
to deal with. So I want to minimise effort points and paperwork.
This *particular* startup/webapp won't last forever (as it's an interim
solution until a giant publicly listed corporate™ releases the
equivalent/potentially acquires us to do so is obviously the preferred
option), so at the moment my focus is just keeping our features afloat,
customer growth at a reasonable rate and the highest profit margins we can
reasonably run. It runs on me ~1-2 days a week plus a 2.5 day/wk dev plus 2
FTE customer service, so it's still running on oily rag and is entirely
self-funding etc (no VC or angels = win sometimes – probably too high risk
for them anyway), but is doing bloody well and turning some good numbers in
terms of MRR/ARPU all things considered.
So from the point of view of the LLC, it's something I intend to use
'properly' for my next big thing™ which will be planned to be around for
the long(er) haul, which is why I haven't chased up getting bank accounts
etc. As this is still a 'side project' (which is starting to get harder to
maintain as one), I don't have the time (or annual leave technically) to do
a US trip to sign forms and come back again.
Not filing any IRS returns (maybe I need to, but I bloody hope not), but
doing standard DE paperwork and returns, which seem to pretty much just be
'give us money when we tell you to' at this stage of risk ("low").
1. *Are you contracting with these companies as the Australian company
or as the LLC?*
Everything comes back to the AU company (terms, contracts etc) – making
life easy for myself. Entry cost is $20/mo so it's not a big enough cost to
have to do custom contracts for customers (in fact, I refuse to do so
unless they opt for a higher-revenue/profit 'enterprise' solution).
I might shoot David an email to ask for his advice – thanks for the hook up
Geoff.
Patrick – yes, it is starting to become an issue but I'm also reticent to
jump through too many hoops for $20 a month, given it's only about 1-2% of
our US customer base (probably 40-50% of total customers are US) who
actually insist on W9s and things – mostly the government departments
(understandably). We currently only accept credit cards and Paypal (bank
transfer for AU customers) because of these limitations – no ACH etc that
you'd get for a US account sadly.
Clearinghouse sounds interesting – for this particular kind of startup, it
would be something I might shell out for, but I don't think that you'd be
able to turn a profit for the reasons Geoff mentioned, not to mention that
I'd only funnel the annoying customers wanting the paperwork through it so
even at 30% of transaction you'd probably only be getting a few hundred a
month from me...
Thanks again for the advice – I will report back my findings!
Hugh
On Friday, 15 May 2015 17:56:18 UTC+10, Geoff McQueen wrote:
>
> This seems to be a common problem. Would make sense for a startup idea....
>> to be a clearing house for SaaS shops outside the US.
>
>
> A problem to be sure, but I'd hate to do this business:
>
> - You're dealing with money and thus potential for fraud or money
> laundering headaches. This shit ends up being a honeypot for bad actors :-(
> - You're dealing with companies without the revenue/money to do it
> properly, which means you either charge a lot for the service in % terms
> (thinking Worldpay here), or you don't make much but hope to win as the
> few
> that succeed grow.
> - However, when they get big enough to "pay off" they'll cancel and do
> it themselves properly.
>
> ;-)
>
>
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