The reason we have not submitted an application for YCombinator is actually simply that we perceive the US to be a bad place to be incorporated. Not just for the reason stated in this article of course, hacker news is frequently littered with other reasons as well. My understanding is the requirement to incorporate as a Delaware company is fairly strict requirement for YC companies. Can someone verify this? (we're already incorporated in Singapore).
There are good reasons to incorporate in US states like Delaware, it is not coincidence that so many (non-YC) tech companies are incorporated there. Note that you incorporate in US states, not in "the US", and states offer very different jurisdictions. Here is a quick explanation of why selection of corporate jurisdiction is important:
1) You want to select a jurisdiction that has clean, flexible, and stable set of corporate laws that have already been through judicial review. This provides a robust foundation for corporate structure with few legal unknowns or political risks.
2) Important for investors, the corporate laws must be fair to all parties involved. For example, a jurisdiction with corporate laws that allow a minority shareholder or employee to screw the majority shareholders or hold the company hostage is bad and greatly increases investor risk. There are many jurisdictions that are like this, even in the US. It is one of the reasons you never see tech companies incorporated in California, for example, even though Silicon Valley is there.
3) A jurisdiction that operates under English Common Law is convenient because it is the common basis of contract law used in business, particularly if it involves parties in multiple jurisdictions. Delaware is a nice example of such a jurisdiction with a long, sane, and mature judicial history.
Jurisdictions like Delaware are among the very best in the world for everyone involved if you are building an investor-backed business. Startups that are not incorporated there often have to reincorporate in a place like Delaware as a condition of investment. It is all about having a stable, scalable, and fair set of legal rules on which to build the company.
The average startup faces much more risk from being in a poor jurisdiction than whatever risk you perceive from being incorporated in the US. Investors know this and proper jurisdiction selection is an inexpensive way of reducing the total risk to startup success.
Lots of very very good reasons for Delaware, yes. It totally makes sense for yc to have this as a rigid rule.. Still I'm interested to know if they have ever made an exception for anyone, and if so who and why.
After reading various reasons as to why it's bad to be incorporated in the US, you held off on applying to YC, but you are still using GoDaddy? Moving from Singapore to the US is a hard decision. Switching from a sleazy registrar to one that isn't, isn't.
Good observation... the only reason backrecord.com is still with godaddy is lack of time to make sure I have a process worked out to do it without any downtime. I actually transferred more than 20 domains because of SOPA and can assure you the others will be transferred at some point relatively soon. backrecord.net for instance is no longer with godaddy.
I don't have the time to look for it now, but I recall, somewhere in the myriad of recent HN comments on GoDaddy, there was at least one where the person stated that they switched with no downtime. If you find it, you could ask them if they did anything in particular to achieve that outcome.
Regardless, I think that, ultimately, when it comes to DotCOM, it does not matter which registrar you use, or where your business is located, because it seems as if the US will continue with, and expand upon, its various efforts at interfering with that TLD. I have a pressing need to register a bunch of domains, and it's obvious that I should use DotCOM (simply for the purpose of preventing those names from being taken by someone else in the most popular TLD), but I don't know to which TLD(s) my DotCOMs should point. I've investigated a bunch of them, and I'm leaning towards DotTEL, because it has a few nice features, particularly its uniqueness in that every webpage is generated dynamically from content stored in DNS. Of course, DotTEL can't replace most websites, but it could act as a gateway to your content.
