HN Explorer

Ask HN: Buying a startup?

9 points by chengas123 ↗ HN
I've been reading about startups on HN for awhile and getting ready to dip my toes into the water! I'm likely putting an offer on a small e-commerce site with some friends in the following days. The site is incorporated in NJ. My partners and I are in CA, MA, and NJ. Is there anything I should consider from a legal aspect? Do we buy the LLC or all the assets (domain name, etc.)? What should we do ourselves vs. with a lawyer? It's a small site, so I don't want legal fees to be too large a percentage of the total transaction.

6 comments

[ 4.2 ms ] story [ 21.8 ms ] thread
lsb
This is something a competent lawyer should advise you with. Songkick used (uses?) Gunderson Dettmer, Wilson Sonsini is quite popular in the Valley, and it sounds like you'll need significant experience, especially because you haven't posted many specifics to go on.
joshu
I heart Gunderson Dettmer. I can't remember if I introduced Ian to them in the first place.
chengas123
thanks for the recommendation. none of us are in the valley. at the moment we're leaning towards NJ since the site is there currently, as well as one of us, and i think the fees are the lowest. also, i should reiterate that it's really a super small site. my personal blog gets more traffic. it's just a simple niche ecommerce site. nothing that we'll be looking for vc funding or quitting our day jobs for
bkrausz
Perhaps some kind of site involving ping-pong balls?
andreshb
1. I would recommend getting a lawyer, though I know of some Angels that have grabbed existing term sheets from other investments done by other angels and modified a few things here and there. But that is very risky if you have not done a transaction like that before. So get a lawyer.

2. When you buy an entire company, you are also buying its assets.

falsestprophet
If you are buying the beer pong operation, what you are really buying is just a domain name.

The easiest way to do this is to incorporate an S-corp in Delaware and write up a plain English contract to transfer the domain name and trademark.

I would pay a good designer a few hundred dollars to rebuild the site altogether. The conversion rate for the current setup is probably very weak.