It’s a once in a life time offer, right?
- A U.S incorporated company.
- A U.S registered bank account.
- Top tax/legal guidance from top American firms.
- And yes, a free Stripe account for receiving and making payments globally.
Stripe's Atlas is the product that promises to help you realize all the above for $500 only.
They have partnered with several startup accelerators and hubs all over Africa to make ease of their acquisition efforts, but before you begin shouting of how Stripe's Atlas is great, ask yourself the following.
1. Does A U.S. Registered Company Make Your Startup VC Friendly?
The answer is a resounding and a big NO!
Neither will it be special in the U.S market. Venture Capitalists and angels alike basically invest in the people behind a startup. For the lack of cashflow and related figures are the reasons why VCs instead look at the quality (and chemistry) of the teams behind startups that they choose to invest in.
Besides, there are millions of startups in the U.S struggling to raise venture capital. Incorporating from uncle Sam’s, even if partly an incentive, is not a golden passport to VC dollar signs.
2. Are The Benefits Of Incorporating In Delaware Attractive Enough?
Stripe promises to register your startup in Delaware (U.S.A.) as a C-corp (your company is taxed separately from you) but the question should be how much of assets do you have as a startup — and are they worth wittily protecting against taxes?
The answer, again, is no. Most of the startups are low cap (or zero cap) and adhoc and operate from briefcases euphemistically put as collaboration spaces.
If there is anything certain in life it’s death and taxes. For African startups, taxes may not really be certain, but mortality is more prevalent. It certainly comes before startups are ready.
3. Are You Aware Of The Operational Costs Back At Home?
Having a U.S. incorporated company isn't a gate pass to every country in the world.
As a matter of fact, your startup would have to register as a company in your country too. These are operational overheads in terms of licences, taxes and other associated costs. This is on top of the costs expended on incorporating in the U.S and the follow-up costs overtime.
Stripe says that after the first year, a startup would begin footing their own costs associated with renewal of licences and agency fees and other professional fees.
4. Does Africa Need A Paypal "Beta"?
Or rather Africa and other emerging markets alike need better and more open payment solutions.
Where the cathedrals of voice and data on the continent are pervasively paranoid. What is poised to truly disrupt them is not far flung but rather within our backyards. Mobile money, for example, showed that there was so much that could be done to effect payments to the last mile.
The next major milestone will be built around that model, and not a beta Paypal.
5. What Are The Alternatives?
I could mention 99 payments platforms and Stripe wouldn't make it to the list.
They are just so many. They may not be as reliable but certainly, they’re not asking you to incorporate in the U.S to enjoy “full benefits”.
Pick your hustle smartly. If your problem is getting payments, then there are free alternatives. If your problem is exposure to the U.S market, you may have to read #1 again.
6. Have You Tried Looking For Solutions Within Africa?
Bereft of international press rhetoric, African countries like Kenya are hotbeds of innovation and not terrorism. The amended Companies Act of 2015 in Kenya has too good to believe perks. Not limited to tax holidays but also to ease with which startups can thrive in an informal economy.
There are Delaware like tax incentives in Mauritius too. Explore a little more. You’ll be positively shocked.
+1. Is Stripe Trying To Unconventionally Publicly Raise Money, Without Breaking SEC’s Rules?
This is somewhat an unrelated bonus question.
Or is it trying to on board as many users as possible?
If there is any take away for me is that Stripe is playing a smart move. Although it’s playing in murky muddy grounds, that does not stop me from accusing it of raising dust. And telling my fellow startup pirates to stay sober as not all that glitters is gold.
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