> he being the one with the idea and money

Ideas are worth $0. Nevermind you'll switch the idea to something else.

And the type of person who wants to a get patent first instead of getting users is precisely the kind of person you shouldn't be starting a company with. A patent won't get you customers. How many companies can you friend name that lost to another company because of a patent rather than a thousand other reasons?

Both your fears are valid. Trust your gut. My suggestion: don't start a company with this friend.

Thanks for the reply.

I know ideas are worth €0, but it's a bit harsh to just tell him that right away.

>A patent won't get you customers.

Yes, but he's scared that, once it's online, others will want to copy-cat and capture the market. And I understand his fear, but I don't know enough about patents and legalese to relay his fears.

>Both your fears are valid. Trust your gut. My suggestion: don't start a company with this friend.

Thanks :) But I like this friend and want to start a company with him, just not the way he wants to (throwing money around without having even a prototype)

I also have a friend I want to start a startup with. But like you're friend, he has the same misconceptions about businesses most people have. But I like him & I think we would make a great team. So my plan is to watch http://startupclass.samaltman.com/ with him before we start anything.

You do realize that setting up a company is a waste of time/resources, as getting a verified and valid patent is quite expensive too?

Take all the resources people are providing you and also try to find a nice lawyer friend who can draft up a type of document where the initial patent is filed under the friends name until a certain point where it is feasible to setup a company.

Once the company is setup (51/49??), you then transfer the patent to the company, to prevent the patent owner from exploiting any future profits through legal means.

Also remember that no VC (even in Silicon Valley) will give you seed money if the patent is not under a corporate name.

Minimum share capital with two shareholders in a BVBA is €6200, i.e €3100 each. Nothing wrong with setting up an entity, but at the same time, there are alternatives in Belgium (e.g. a VOF), if you're strapped for cash.

You could set up a "joint ownership" document for the IP rights, which won't be worth much, but better than nothing.

This said, I would focus on getting customers first. Face it, if this is your first product, you'll probably fail. It's a cycle everyone goes through. :-)

Thanks! I thought that a BVBA would only need €6200 min., and it's nice to see somebody else thinking the same. I'll check with a bookkeeper just the same though :)

A VOF seems dangerous to me because of the unlimited liability.

> I would focus on getting customers first That's my idea, but how do you get customers without being able to charge them? (AFAIK you can't charge customers without being a company)

>if this is your first product, you'll probably fail. It is! And I told him as well that 90-95% of the startups just fail in their first year, to make him realise the chances of succeeding.

But thanks for your info as well.

It's €6200 if you're two shareholders, and €12400 when you're a single shareholder. Don't ask me where the logic lies in that. You'll still have an obligation to pay the full €18600, should you go bankrupt, don't forget that! There are also specific things, such as extended director liabilities, in the first 3 years after incorporation.

Something else to do would be to build a piece of IP, and then make a contribution in kind to the company during incorporation. This is also allowed.

That way, you won't have to contribute cash. If you have software that is worth €20k (using some valuation), then that can be contributed to the company as capital.

But you'll still have to pay the notary fees (€1000-€1500), plus for the valuation report (€800-1000) of the IP. You might also have to pay capital gains tax on the increase in value of the IP, which probably will be 7.5% on €20k, or €1500.

Contributing cash is better if you can, though, in this case.

Best of luck !

If you want local advice, try contacting http://startups.be/

Thank you very much for this link. This helps me / us to get to the next step in starting a company / launching a product.

> So who do I talk to, what do I research?

You MUST seek out and talk to the Economic Buyer. That's the individual who's life will be helped by purchasing your product or service. The more you understand his world, the stronger your idea will be.

Incidentally, you CAN sell a concept on a pilot project basis. The customer becomes your first investor.