Archive for June, 2008

You’ll have to deal with a bank even before you’ve incorporated. So you and your friends have decided to go the corporation route for your startup? Part of the SEC Requirements is to open a Treasurer in Trust For (TITF) Account.

Let’s talk about your new corporation; and I’ll give illustrative amounts. The authorized capital stock which is the ceiling amount for the capital that can be invested in the company is P1 million. The Corporation Code requires that 25% of the authorized capital stock is subscribed and 25% of the subscribed capital is paid-up. Did I lose you?

So, we’re talking about the P1 million right? You and your fellow incorporators (5 to 15 incorporators are allowed) subscribe or promise to invest at least P250,000 (25% of the P1 million).
If you guys don’t have that amount yet, that’s okay. You can start with P62,500 (25% of P250,000) cash. It’s really just easier to use cash, because if you guys invest property (like a car, or a computer, or furniture) there’s a lot more documentation needed. You don’t wanna go there.

To open the TITF account you’ll need:

• P62,500 cash investment
• Notarized Treasurer’s Affidavit (From SEC Online Registration)
• Completely signed and Notarized Articles of Incorporation and By Laws (From SEC Online Registration)
• Two valid IDs of the Treasurer and ID photos
• Roster of Officers - certified by the Secretary
• Board of Directors - certified by the Secretary
• List of Stockholders - certified by the Secretary

Requirements may vary from bank to bank. Call the branch to verify the requirements, speak in English — DON’T walk in to inquire. We did ours with BDO Bagtikan and it was the biggest hassle.

Be sure that when you fill out the Treasurer’s Affidavit form, you specify the bank name and branch. Check the amount and of course the treasurer’s name and notarize.

So they open your TITF account and you get a passbook. The amount is on hold until you submit a copy of your Certificate of Registration given by the SEC. You pay around P100 to P300 for a Certificate indicating that you have P62,500 in a TITF account at their branch. You have to notarize this paper too. You bring this together with your other SEC registration papers to Greenhills.

Once you get your SEC Certificate of Registration — it’s green and there’s a gold seal, make about 20 copies. You’ll submit one copy to the bank so you can close your TITF account and open your real business checking/savings account. You can do that in the same bank or somewhere else, but be sure to keep the P62,500 intact.

Next, we’ll talk about how to open your real business account.

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Taking on new employees is definitely easier said than done. Recruitment takes up so much time, money, and effort — especially when you’re a startup.

Like here, I personally handle the applications that come in from the job ads that also I posted. I’m a 1-woman HR department. Since we’re bootstrapping, same as Zappos, we can’t afford to hire someone who doesn’t believe in the startup experience. He/she has to have an entrepreneurial spirit, have the good sense and initiative to work on his own in our office even if he’s alone because the others come in late or have proven that they can work from home, and of course mad skills in programming/business development/UX/customer service.

Discovered via Good Experience and JP has mentioned this in passing:

This (Zappos) is a company that’s bursting with personality, to the point where a huge number of its 1,600 employees are power users of Twitter so that their friends, colleagues, and customers know what they’re up to at any moment in time. But here’s what’s really interesting. It’s a hard job, answering phones and talking to customers for hours at a time. So when Zappos hires new employees, it provides a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. People get paid their full salary during this period.

After a week or so in this immersive experience, though, it’s time for what Zappos calls “The Offer.” The fast-growing company, which works hard to recruit people to join, says to its newest employees: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” Zappos actually bribes its new employees to quit!

Why? Because if you’re willing to take the company up on the offer, you obviously don’t have the sense of commitment they are looking for. It’s hard to describe the level of energy in the Zappos culture—which means, by definition, it’s not for everybody. Zappos wants to learn if there’s a bad fit between what makes the organization tick and what makes individual employees tick—and it’s willing to pay to learn sooner rather than later. (About ten percent of new call-center employees take the money and run.)

Continue reading “Why Zappos Pays New Employees to Quit — And You Should Too” or watch Bill Taylor’s interview:

As much as I’d like to emulate how Zappos keeps employee turnover down, I’m not sure we always have instant USD 1,000 just lying around. Since web-based products are fundamentally unique and not the same as working in a bank or a consumer goods company, this could potentially be a good practice.