Company

The section founders skip and then pay for. Almost every avoidable disaster in an early company — a co-founder dispute, an advisor claiming equity nobody documented, an investor walking away over a structure — traces back to something in this file that was never written down.

---

Entity

Is this the right structure?

[TBD]

The question that matters, once a year and before any raise:

• Proprietorship / sole trader — cheapest and fastest. Fine for testing. No separate legal identity, so you carry personal liability, and you cannot issue equity.
• LLP / partnership — some liability protection, lighter compliance than a company. Workable early. Institutional investors generally will not invest in one, so a conversion is likely later — and conversion has cost and tax consequences.
• Private limited / corporation — heavier compliance and cost, but it is what equity investors expect. If you intend to raise venture capital, this is the destination.

Two failure patterns worth naming. Founders incorporate a private limited company far too early, then spend two years paying an accountant to file returns for a company with no revenue. And founders stay a proprietorship far too long, then discover that the grant, the investor or the enterprise customer they finally landed cannot transact with them.

Trigger for change: [TBD — what event makes conversion necessary?]

Founders

For each founder:

[TBD — name]

Founder-market fit is a real asset. The most compelling thing in an early pitch is often not the product; it is why this founder, with this history, sees something others do not. Write it down explicitly — you will need it in the deck, the grant application, and every introduction.

Team

Total headcount: [TBD]

Monthly people cost: [TBD] → feeds 07-money

Unpaid interns are people too — list them. Founders routinely describe themselves as a "team of six" when four are unpaid students who will leave in March. Know which is which, because your capacity plan depends on it.

Cap table

Total issued: [TBD]%

ESOP pool: [TBD — reserved or not]

The dilution map

Where this goes. See 08-capital for the full staged plan.

Two misunderstandings that come up constantly. First, that you dilute once, in one big step, at the end — you do not; it happens at every round and it compounds. Second, that founders end up with a token percentage — the goal is that each round buys enough growth that a smaller slice is worth more. Model it, so the number does not surprise you in a term sheet.

Control

[TBD]

Who can actually make a decision? If the majority of the company sits with family members or an early investor, say so and say whether that is a problem. It is fine that it is not the founder — as long as everyone knows, and an incoming investor will ask.

Advisors, partners and everyone you have promised something to

The single most common unforced error in early companies: equity promised in a conversation and never written down. "He said he would help with marketing and we agreed he would get something" is not an agreement — it is a future dispute with a good mood attached.

>

Before anyone receives equity, they get a one-page scope: role, deliverables, hours, consideration, vesting, cliff, term, and what happens if it does not work out. worksheets/advisor-scope.md.

Anyone in this table with "✗" in the writing column is an open risk. List them at the top of CONTEXT.md risks until it is closed.

Also record people who hold equity but are no longer contributing. It happens — someone helped early, took a slice, and has since gone quiet. Note it. An investor will ask what that 4% is doing on the cap table, and "I am not sure" is a bad answer.

Professional support

If any of these rows is empty and you are past prototype stage, that is a gap, not a saving.

Compliance calendar

What is due, when, and who does it. Missing a filing is cheap to avoid and expensive to fix.

Sector-specific regulation: [TBD]

If you are in health, finance, education, food, or anything touching personal data, name the regime and the specific constraint on what you may claim, sell or store. Get this from a professional, not from an AI — and record what they told you here.

History

[TBD]

A short factual timeline: founded, first prototype, first customer, first revenue, pivots, the things that did not work. Six or eight lines.

Worth writing for two reasons. It feeds the founder story in every deck and grant application, and it stops the company quietly forgetting what it already tried.