By Jessy Hempel for The Wired Magazine
SIX YEARS AGO, Irish brothers John and Patrick Collison set out to make sending payments dead simple for businesses—as easy as pasting a line of code into their apps. It’s working. Today their company, Stripe, powers mobile payments for startups like Lyft and Slack and Fortune 500 companies like Best Buy. Now, the Collisons want to take the complexity out of starting a business in the first place—and render geography irrelevant in the process.
Today Stripe announces Atlas, a business-in-a-box service designed to help entrepreneurs handle the details—incorporation, legal advice, tax advice—involved in launching a company in the United States. Patrick Collison, who will announce Atlas at Mobile World Congress, says he hopes the service will give non-US entrepreneurs an equal chance. “It presents them a route to start a tech business and take advantage of its potential on equal footing with a company based in Silicon Valley,” he says.
‘Corporate jurisdictions and headquarters are becoming more fluid in the era of the Internet. Physical geography matters less.’PATRICK COLLISON, STRIPE
By filling out a web form, entrepreneurs will be able to incorporate their businesses in Delaware, establish a US bank account, and receive a tax identification number. They’ll get access to a host of services, including legal advice from international law firm Orrick; $15,000 in computing services from Amazon Web Services; and tax advice from PriceWaterhouseCoopers. And, of course, they’ll get a Stripe account. The entire process, says Collison, will take less than a week.
Potential customers are people like the founders of Platzi, an online education startup offering professional skills courses in Spanish and English. The startup is based in Colombia, but its founders, who are Guatemalan and Colombian, believed they’d have more access to capital and an easier time accessing services like Stripe if their business was incorporated in the United States.
Figuring out how to make that happen was both expensive and time-consuming. Cofounder Freddy Vega had to make a couple of trips to the United States over several months to sort out the details. But the effort paid off—in January, the company announced $2.1 million in seed funding from a host of funds, including Y Combinator and Omidyar. Vega believes that being a US company made this fundraising process easier.
Collison believes there are a lot of people like Vega and cofounder Christian Van Der Henst who would benefit from this service. “Corporate jurisdictions and headquarters are becoming more fluid in the era of the Internet,” he says. “Physical geography matters less.” He believes companies should incorporate in the countries that are most advantageous for their businesses. Stripe doesn’t plan to limit its services to US; Collison says the company is already in talks with its first additional jurisdiction.
The Internet’s Infrastructure
Distilling the complexity of establishing a financial infrastructure down to a several-day process is tough. To help develop the service, the company put together an advisory board that includes the former Deputy US Treasury Secretary Neal Wolin as well as Ben Lawsky, who was New York’s first superintendent of financial services. (Seriously, that’s a title. His job was to reform the regulation of financial services in New York.) The board also includes Linda Rottenberg, who runs Endeavor, a nonprofit that has worked to foster entrepreneurship in South America, and Aramex vice chairman Fadi Ghandour, who runs a venture fund that invests in the Arab world.
Now Stripe must recruit entrepreneurs. To begin, the company has enrolled representatives from 50 incubators, accelerators, and investment funds around the world in referring entrepreneurs to Atlas. Initially, Atlas is only available to referrals. But Collison believes there will be a massive market over time. “Most economic growth over the next 25 years will come from the developing world,” he says. That should mean there will be plenty of entrepreneurs looking to start businesses.
If Atlas takes off, a host of new companies will be building out their businesses using Stripe. That’s the point. Thus, the service will cost just $500, most of which will go toward covering the cost of incorporation. The point for the Collisons, is not to profit directly from Atlas, but to make Stripe into the payments infrastructure for the entire Internet.
the article first appeared in the Wired magazine