Complex business structures have been my forte for many years. Having set up in excess of 20,000 companies, I have seen all the twists and turns of the business world. So take it seriously when I tell you: most founders spend far too much, far too early, overthinking the business set-up. The elaborate structure that protects a real business will quietly strangle a fragile idea. Before you have traction, keep it simple and focus on your business.
Don’t drown before you get off the ground
The most common way I see early founders waste their first year is not building the wrong product. It is building the wrong scaffolding around it. A company here, a trust there, an intellectual-property holding entity, a complex shareholders’ agreement, an accounting stack fit for a business ten times the size — twenty thousand dollars or more in legal and accounting fees, spent before a single customer has said yes. It is not just the cost but the enormous amount of time this all sucks out of the startup.
Structure should match the stage
Structure is not free, and it is not neutral. Every entity you create is one more thing to file, fund, explain, and — if it does not work — unwind. There is absolutely a time for the full architecture; I have written about structuring complex ventures properly. But that time is after traction, not before it. In the beginning you are not running a business; you are testing whether one exists. For that, a single simple company is plenty.
The $1,500 test
Here is the discipline I would give any first-time founder. Set a small, fixed budget to find out whether anyone actually wants the thing — call it $1,500. A basic company, templated free agreements, Claude to build an initial website, and whatever it takes to put the offer in front of real customers. Then watch for traction: people paying, or plainly trying to. If it comes, wonderful — now you have something worth structuring properly. If it does not, you close it down cleanly for a low cost and move on, wiser and barely poorer.
You cannot fail fast if failing costs twenty thousand dollars to unwind. Be nimble and lean.
That is the other half of failing fast: it only works if the setup is light enough to walk away from. A heavy structure does not just cost money going in; it makes you cling to a dying idea because unwinding it requires serious legal and accounting input and cost.
The startup industry is selling you a pup
There is a whole industry that makes its money from founders before those founders make any money at all. The pitch-deck theatre, the complex business structures, the endless planning documents, the accelerators and advisers who take a slice for a logo on a slide. Some of it has value later. Most of it, early, is a tax on your attention and your pocket. A beautiful pitch deck has never once created a customer. Ten slides polished for a fortnight is a fortnight not spent finding out whether anyone will pay.
Work the business
Talk to customers. Build the smallest thing that tests the real question. Take money as early as you honestly can — nothing tells you the truth like someone buying. Keep the structure and the paperwork deliberately simple until the evidence says the idea is real. Build the business structures as and when needed, not before.
Why it matters
Starting lean is not about being cheap. It is about staying nimble — learning fast, deciding fast, and, if need be, stopping fast, without a complex structure — one you barely understand — holding you in place. The founders who win are rarely the ones with the best-looking company on day one. They are the ones who found the truth quickest and spent the least discovering it.
Keep it simple and lean. Only build out once you have traction.
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