I incorporated my first real business entity in 2010. Every part of the process of setting up a business—incorporation, opening a bank account, setting up payroll, etc—was a horrifically inefficient and expensive experience to me. Over the past decade we’ve seen a number of startups emerge to put to modern customer experience, often by using automation and turning code into PDFs and faxes. But the process of forming a company is still dominated by clunky incumbents with few dedicated modern startups tackling the problem.
The challenges of setting up a US-based business are compounded if you happen to be physically located outside the country. I spent much of the last seven years outside the US and getting business entities and bank accounts set up for several new ventures, including Earnest Capital itself, in many cases has required physically flying to the US just to put a signature on paper in front of a human.
So it was with immense pleasure (and relief) that I found and got the opportunity to invest in Mark Milastsivy and FirstBase (firstbase.io) which offers 100% remote-friendly LLC or C-Corp formation, business bank account creation, and much more in a simple $399 package.
A huge global opportunity for entrepreneurs
Every year more than 500,000 new businesses are started in the US, several million US business entities are incorporated, and somewhere between 30-50 million new businesses are started worldwide. So the opportunity to radically improve the customer experience here is vast. More and more businesses are being built distributed and remote-first and very few services are able to handle the entire process with founders physically located outside the country.
Although we’d love to see this process made seamless in every country, the US is still the best place for many entrepreneurs to open a new business.
As more forms of capital are available for entrepreneurs, the US is the epicenter of this innovation. For regulatory and tax reasons it’s immensely easier to invest from a US-based fund into a US-based company. Earnest has invested in four startups now with founders not currently living in the US, but all but one of them operates a US-based business entity. It makes far more sense to make it easier to incorporate in the US than to try to create global funding structures. But fundraising is only one of many reasons for entrepreneurs to form a US entity.
Not just business formation
FirstBase is only a year old but already they do far more than just forming your business entity. Included in the price is a seamless process for opening a business bank account with Mercury1, a free tax consultation, a US physical address and mail forwarding, and a growing list of benefits from partners like Brex, Sonetel, Freshbooks, Bench, and more.
Relentless improvement of customer experience
Forming a business remotely can be a nerve-wracking, opaque process, but the support team Mark has built is unflappably helpful. As part of our (remote-friendly) diligence process I will often ask for an account to poke around in the support platform and view some recent tickets and customer conversations. What I saw with FirstBase was a dedicated team diligently and calmly answering a wide array of questions and collaborating to make the process as smooth as possible for entrepreneurs. World class support is a top priority for FirstBase and they have already launched Spanish language support.
Behind the scenes the FirstBase team is constantly thinking through the intricacies of every step in the process. In one of our initial conversations, Mark walked me through in excruciating detail everything that was hard about getting an ITIN2 issued and his plans to simplify it. FirstBase is tackling a big problem involving multiple government bureaucracies and this kind of relentless focus on the details is the only way to make launching a business truly seamless.
Isn’t this just like…?
It comes up in every conversation so we’ll speak to it here. Yes, a large and beloved Silicon Valley startup offers a competing company formation service. It’s great. And when they first launched, it was a far better option than anything that previously existed. But it is, to the best of our understanding, primarily a marketing channel designed to incorporate businesses that are strategically the most likely to be their ideal customers, not a core product offering. The FirstBase team is entirely dedicated to smoothing out every last rough edge in the business entity formation and ongoing management experience. Company formation is not a loss-leader for FirstBase, they actually make money off this product, despite it being remarkably affordable, and they are aligned with Earnest’s vision of sustainable calm profitable companies. All this adds up to an experience that is smoother, cheaper, accessible to more companies, and getting better every day in a blue ocean-huge market.
A perfect fit for Earnest
At Earnest we are a remote-first fund and community of founders and mentors. We are particularly interested in tools for remote companies. We also believe that entrepreneurship is an inherent good and love backing products and founders that make starting and running a business easier.
If you’re considering setting up a new business entity give FirstBase a shot and use the discount code “earnest” for $20 off + a few other extra perks.