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Ask HN: Bootstrapping a Startup Alone

45 points by matrix ↗ HN
For reasons beyond the scope of this question, I must move to the Salt Lake City area within the next 3 months. I'm looking forward to this move, but it puts me in an interesting situation, and I feel the HN collective will have some interesting insight and advice to offer.

First, a little background about me so we have some context: I am not a US citizen. I will have a green card in about 18 months, but meanwhile if I work, the employer must sponsor me for a visa.

This makes me nearly unemployable. The number of employers willing to deal with the visa process is vanishingly small, consequently there are very few -- if any -- jobs available to me. An additional complication is that I am "too experienced" for many jobs. I have a Masters degree (Software Engineering) about 12 years experience working on commercial software products. In recent years my career has been focused on management/technical leadership roles. That's no accident. I wanted that experience because I have a strong entrepreneurial streak and want to involved in the business side of things. I love that stuff.

However, I'm also passionate about building web products. I code for fun. I'm a geek, and I get a kick out of building cool stuff. I have no interest in being a middle management drone. I'd much rather starve and build something cool with a group of passionate people. I think a lot of people on HN are like that.

I'm thinking my unemployable status might in fact be an opportunity. My wife will be making enough money that we can get by with just her salary. She is happy to support me if I decide to invest my time into building something that has the potential to be turned into a startup when I am legally permitted to.

I always have a few ideas that I'm thinking about, working on, etc and now is no exception. I'm thinking this might be an opportunity to iteratively build prototypes and get market/customer validation for something that I can then really launch once I have a green card.

My questions: Is this something that's viable to do, in your experience? I don't have a professional network in Utah, so at least initially I will be alone on this - and in fact will have to be, since I cannot legally start a business. Also, does anyone have any advice as to how I might build a professional network of like-minded people when I'm in a situation like this? I have the social side of things covered (I participate in a lot of outdoor sports).

I'm happy to elaborate further, I just wanted to keep this question short and to the point.

34 comments

[ 23.9 ms ] story [ 416 ms ] thread
adrianscott
Check with a lawyer, but I'm pretty sure foreigners can start and own businesses in the u.s. (e.g. toyota, hyundai, ...) You may just not be able to be an employee of said business. Build your network online. Go for it and good luck.
[deleted]
(comment deleted)
icey
Just to be clear; your wife can support both of you while you're waiting for your green card to come through?

This seems like the perfect opportunity to try to make something to me, as long as she's on-board with the plan.

matrix
Yes, that's correct. I agree it's an opportunity - albeit one with a few challenges. But, challenges are part of what makes it fun!
shareme
non citizen will be the problem.

This is an Ask Jason on This Week IN Startups question..

I would submit this to this week in startups as I believe Jason would skype cal you during the podcast to get the question answered.

thaumaturgy
So you like challenges?

You definitely want to talk to a business attorney and pay for some professional advice on the best way to set this up. You really don't want to put the next year of your life into this and then end up in a fight with the U.S. government over it.

You might consider incorporating in Nevada. Nevada and Texas have protections for businesses against piercing the corporate veil, as well as some protections from the IRS. Your business just needs a contact in Nevada, and there are a number of businesses that provide this as an affordable service. If any legal trouble comes up, you can "hide" behind your Nevada contact; the courts have supported all but one case of this, I think.

Make sure you cover yourself for taxes and all the other paperwork. I have no idea how not being a citizen will affect your tax situation.

Be aware that you may be endangering your marriage. Although your wife can support both of you, it would be natural for some amount of resentment to develop if she isn't able to see clear, regular progress on your project, even if she's an amazing person. On the other hand, it may take you weeks of frustration and dedication to produce anything that looks like progress, depending on what you're doing.

Be sure that you have the motivation and self-discipline to spend 8 uninterrupted hours per day on your project, at a minimum. You should clock in, and clock out, and otherwise treat it just like a full-time job. Set goals: at the end of the week, you'll have X done. At the end of the day, you'll have Y done.

Depending on what you're doing, it can also be one of the most challenging things you've ever done -- maybe even grueling. Or, maybe it'll be easy. Easy would be good, because you'll have enough legal, tax, and business challenges as it is.

I boot-strapped a small business, by myself, with no savings, a few years ago. It's not a "startup" in the HN sense, but it's been making money since the beginning, and it's doing really well now. That said, some masochistic streak within me makes me go out and do the hardest things I can find, and this has been the hardest thing I've ever done, by far. The stress from it has resulted in a few minor health problems, and I now have chronic sleeplessness. I have an indescribable amount of gratitude for the help I got recently in the form of a girlfriend that likes me and likes my projects.

So, help is good. "Alone" is not fun. Try to have help.

matrix
Thank you, these are exactly the sorts of things I need to know. It's especially helpful to hear it from someone who has "been there".
keeptrying
You can own a business but you cant work for it unless you have a visa. If you write a business plan and can get some funding you would be able to get a H1 for yourself. This is obviously not easy but people have done it. And in a down market, its much easier to get a H1 as the bigger companies arent using up the supply.
keeptrying
Just to clarify, you would need the funding or letters of intent from customers to prove to the USCIS that your business would actually be viable and for them to issue the H1.
davewasthere
Definitely viable!

There's nothing to say you can't be a share-holder in a company - or a director of one you create yourself. You just can't be an employee without a work permit. (although if you incorporate overseas, I think you should be able to pay yourself through that and declare it as income earned overseas. I'm unclear on US law, but that seems universal in most countries I've lived.)

I think you're in the ideal place to take a few of your ideas to market and see if you can gain traction. Good luck with it!

char
If all you're building is web products and you can afford to live for a few months, just start building!! You don't need to have a 'business' to do this. Please don't pay for legal advice or try to incorporate. You can do all of that later when it actually makes sense.
thaumaturgy
This is terribly bad advice, unless you plan to give away your labors for free.

Things get complicated as soon as you start making money.

char
But he's not likely going to make any money in the next several months, so for now he should just build. If he starts making substantial revenue, he can deal with the legal stuff at that point.
thaumaturgy
I respect where you're coming from -- just concentrate on building, make it awesome, and everything else can wait -- but that's a good way to end up in an ugly situation, especially since he's a non-citizen. I don't know the rules around non-citizens starting a business in the U.S., do you?

Also: if the business is starting to make money, then that's the ideal time to really concentrate on it. Iterate, iterate, iterate. It's hard to do that though if you have to step away and deal with the legal stuff instead; it becomes a distraction at exactly the wrong time, and you don't even know ahead of time how long it will take to deal with.

There's a reason that YC helps their startups incorporate, even before they have a product to sell. It's best to just deal with that immediately, get it out of the way, and then get to work on the product. (This is also the advice of most of the books I've read on starting or maintaining a business.)

I did it your way, actually, and this year I have a tax bill that I cannot afford. You might say that I should have handled that when I knew that the business had grown that much, and you'd be right, but the problem was that I was too busy making money and keeping up with demand to slow down and deal with the legal and tax stuff. Now I have a much larger problem than I would have had if I'd taken care of this in the beginning.

And I'm a U.S. citizen. I have no idea how it would work for someone who isn't.

char
I see where you're coming from, too. I guess I just worry that by the time this guy takes care of all the legal stuff associated with being a foreigner starting a business, the window he actually has to build is going to close.

And you're right -- I have no idea what happens in terms of his taxes should he actually make money, but I feel very similarly to jhancock, who also commented on the post:

"I'm in the middle of immigration process with my wife. Fortunately, the one place the USCIS and IRS do not look is on your home PC to find out if you've been programming for the startup that probably won't make any revenue until after your immigration process is through."

It just seems worth the risk to me.

istari
You can file a tax extension. It defers your taxes by 6 months. You pay 5% annual interest on it.

http://www.irs.gov/formspubs/article/0,,id=98155,00.html

thaumaturgy
You can defer filing your tax forms for 6 months, yes; however, any amounts that you owe must be paid by April 15th. From the link: "Please be aware that an extension of time to file your return does not grant you any extension of time to pay your tax liability."

It is possible to file an application for a payment plan with the IRS. IIRC, you can only do this once every 5 years or so; having done it anytime in the last five years disqualifies you from being eligible for a payment plan. You must also show that you can't actually afford the amount owed. You're able to choose your own payment plan -- $/month for N months -- but the longer you stretch it out, the uglier it gets, due to interest. If you default on the payment plan for any reason, there are some pretty serious fees and other interest added on (so said my CPA).

The big lesson for me here is that there is a 15% self-employment tax for sole proprietors and partnerships, and that it's assessed against your AGI, no matter how low your AGI is. I was confused about this and hadn't bothered to figure out my tax situation ahead of time because I was certain that my AGI would put me below the usual poverty line. But, there is no such thing for those that are self-employed. Oops.

I would have saved myself quite a bit of money if I'd taken care of this earlier last year, rather than waiting until the deadline was too near.

dean
Like others have commented here, I believe you can start and own a business in the U.S. even if you are not a citizen. If being an employee of your business is the problem, you may be able to work around that by issuing shares to yourself and paying yourself in dividends. You definitely do not have to be a citizen to own shares in a U.S. corporation.
keeptrying
You can own shares, you can pay yourself BUT you CANNOT work for it. No selling, no programming - nothing.
jhancock
yep..I'm in the middle of immigration process with my wife. Fortunately, the one place the USCIS and IRS do not look is on your home PC to find out if you've been programming for the startup that probably won't make any revenue until after your immigration process is through.
keeptrying
I agree. If you cant get a H1 for yourself, at least learn everything there is to learn about starting up a company and create a strong network for the future. Talk to founders, talk to VCs/angels.
matrix
Yes, I consider this to be a big plus of at least just getting something going.

(PS: Can someone please mod keeptrying back up, I meant to click upvote but instead accidentally clicked downvote. Argh. Sorry about that.)

jhancock
Why 18 months to get your green card? Is yours a recent marriage? Is your wife not a permanent resident? Not sure why a spouse-sponsored permanent residence process is estimated at 18 months for you.

I'm going through this with my wife right now and so far USCIS has been very quick. We're just entering month 4 of the process and it looks like we may have it all wrapped up by month 6.

matrix
My wife's employer is sponsoring us for the green card. She is in a category that used to be processed quickly, but is now taking much longer. Meanwhile, she is on H1B, which of course has no provision for allowing the spouse to work.
keeptrying
If your not Indian/Chinese and your wife is EB2 then you should be able to apply for a "EAD - Work permit" as soon as your wife files for the 3rd stage of the green card. Using this you can work. Wiht the present system I dont think it should take more than 4 months to get to the 3rd stage.

Your wife's employer will have a lawyer working on all these cases and they will answer your questions for free (its their job!).

If your indian/chinese/mexican/philipino or EB3 category your basically screwed and the best way would be to put together a business plan + funding, incorporate and then try to get the USCIS to give you a H1 to work on your own company.

When I didnt have a g.c I could never really solve this problem (as my visa was employment based and not marriage based) and that makes it even more difficult. Its a toughie. But since yours is marriage based, you have a better shot at solving this.

fbailey
Well since you are not a US citizen maybe you can incorporate somewhere else, if you really have to. A UK limited might be an option.
jraines
I've been in Park City (30 min from Salt Lake) for a year and half and have been pleasantly surprised at the vibrancy of the SLC startup community. A couple things to check out:

www.launchup.org - startup "barn raising events", excellent networking opportunity. I met a designer presenting at one of these and we went on to form a company that was contracted to build a Twitter app that eventually sold for 6 figures. Exciting!

Funding Universe's CrowdPitch events. Great for networking even if you go as a spectator.

www.boomstartup.com - Accelerator; you'd need to find a cofounder and not sure if the visa issue would exclude you, but there will probably be networking events around this.

www.siliconslopes.com

BYU Web Entrepreneurs Group

There's a lot more, too. Informal meetups, overlap with social media events (sometimes--other times these can be painfully dull) . . . overall I've found founders here, big and small (and yes they do get big here), to be very approachable and helpful. Get on Twitter and search for some entrepreneurial types here and you can check out the Twitter lists they are on to find more.

I'd offer to meet and help, but I'm moving to Los Angeles in a few days and can only hope I find it as startup-friendly as Utah.

matrix
Excellent resources, thanks! I too have been quite impressed with Utah's tech industry. There's a lot more interesting things going on than I think most people would suspect.
ibsulon
This is the kind of time where you build something larger than the minimal viable product. Something you may want to consider is building an open source project, then charging commercial support once you get a green card.
matrix
That's an intriguing direction I hadn't thought of. Hmmm... could be some possibilities there.
anamax
Check with a real immigration lawyer. I suspect that you can leverage your wife's work status, but IANAL.

I'm thinking that she can start a biz even though she's employed. You don't take a salary, she takes money out of the biz just like every other S-corp/LLP and puts it into your joint account. Community property can be your friend....

faramarz
Check out http://webstartupgroup.com

These guys are based in Utah and have frequent events at Brigham University. Mixers are great for meeting your future employees, partners or collaborators. Get in involved and definitely start building a personal/professional brand from day one.

In Toronto, we have the MaRS Discovery District. Which is a mix of private and government money funding startups, hosting entrepreneurship classes for free, office spaces, mixers, cash prizes for app. competition, keynote speakers etc. Outsiders may also find the content useful http://www.marsdd.com

It shouldn't be hard to locate a similar program in your region.

Good luck

craybeard
Might be looking for a CTO with software project mgmt experience to lead a new product development effort around the Google Earth engine. AR with local content. Equity for brilliance and execution. Interested? Ping charlie dot mchenry at gmail.
dnsworks
In terms of building your professional network, when you get to Seattle, look up @littleidea (he's also littleidea here on Hacker News). He's awesome.