I checked in with Susan Linch earlier today because I was in a cold sweat about what we were supposed to be doing for reincorporation (and filing our first tax return). Lucky for us, she knows the entire process. A few days back, I sent her the signed paperwork for dissolving our non-profit status and reincorporating as a C corporation. I had actually tried to send it to her before that, but accidentally addressed it to myself. Whoops 
The paperwork for reincorporating is going back in the mail in the next day, and we should hear from the State of Florida within the next week or so about the update. This is where the really cool part comes into play: we don’t have to file a tax return yet. Because we’re re-filing, and reporting our new year end as the of December, we don’t actually have to file a tax return until the beginning of next year. That fact alone removes a lot of stress about the current moment because, previously, I thought we had to file for a tax extension by September 15th.
Once we get confirmation from the State of Florida about the reincorporation, we’ll have to apply for a new Employer Identification Number (EIN) from the IRS. On that form, we include our old EIN so that they know to expect a cancelation number shortly after that. All of this work happens as we make it happen and there isn’t really a specific deadline other than being on top of our game.
Later: I remember that the last thing we talked about is that we’ll need a really good accounting system in place by the end of the year with software and all that jazz.
This afternoon, the CoPress board unanimously voted to switch from a nonprofit to a for-profit organization. It’s a big deal and a new direction for CoPress.
So why did we do it? It opens up a lot of expansion opportunities we wouldn’t have had with a nonprofit status. The move allows us to share equity with the people who have worked so hard to build CoPress up, and it opens the doors for investment opportunities. Though we lose the tax benefits and the warm fuzziness of being a nonprofit, we think CoPress has the potential of being a self-sustaining business in its own right.
Members in attendance:
- Daniel Bachhuber
- Joey Baker
- Ryan Sholin
- Suzanne Yada
- Jackie Hai
- Andrew Dunn
- Bryan Murley
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On Thursday, I had a meeting with Carolyn Duncann of the Portland Ten in regards to some of the logistical questions we’re facing as we try to switch from non-profit to for-profit. Joey and I had a short conference call this morning to debrief on that, and then plan our next steps.
For the text record, on Sunday our board will meet to vote on whether we have permission to move the project from non-profit to for-profit. We need a board vote on the record to make sure that everything is legal. Depending on whether that passes or not, Joey and I will then work on refiling on Monday with the State of Florida. We’ll continue with Florida over Oregon or another state because Susan Linch is kind enough to be an excellent resource. Once we get the filing done, we’ll wait as close as possible to September 15th to file for an extension on our tax return. The next month will also hold the project for us of figuring out how we split up equity amongst the people who going to be doing the work this fall. Neither Joey or I are qualified to comment on how this will be done (yet) and plan on talking to knowledgeable people within the next week to figure out the most equitable way to do this.
Thursday’s meeting with Carolynn was mostly focused on investment, when you seek it, what investors are looking for, etc. Most of the information isn’t applicable to us currently, and might not ever be applicable to us. The upside to external investment is that you get an infusion of cash with which to scale your business. The downsides are that you lose ownership/control of the company, the investors generally want at least a 20x return, and they might be looking to take your company public or sell it off to get that return. If we can scale such that the team starts getting paid based on their work without having to take external investment, I think we’d be better off.
My notes from the meeting (page 1, page 2, page 3) are moderately informative.
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On the call this evening were Adam, Joey, Greg (although we, humorously and sadly, forgot to add Greg for the first 30 minutes), Miles, Andrew, Lauren and myself. Andrew Dunn and Cody Brown joined us until they mysteriously disappeared from the internet.
We started off the conversation by running through the website redesign we’ve been working on for the last couple of weeks. For history and posterity, this is where we’re at (although both the images and copy are not set in stone; we’re having an epic Basecamp conversation about the merits and demerits of our proposed slogan):
The original, original goal was to relaunch last Tuesday or thereabouts. After we completely blew through that, I moved the draft day to Thursday and then launch over Saturday. That didn’t happen either. Our goal now is to launch as soon as we put the finishing touches on a few last things.
Continue reading ‘August 9, 2009: I ain’t no spaghetti’
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I don’t have as much time as I’d like to recap the conversation of Sunday’s meeting, but I’ll do the best I can. It was a super-productive, super-charged, and super-efficient meeting, all powered by a venti chai accidentally consumed by me. Joining me for the conversation were Lauren Rabaino, Joey Baker, Adam Hemphill, Andrew Spittle, Greg Linch, and Megan Taylor, a rockin’ team.
We started off by continuing the for-profit vs. non-profit conversation we’ve had of late. I did a recap of the call Greg and I had with Greg’s mom, Susan Linch. She was really helpful and informed us of most of the logistical things we’ll have to cover if we do the switch. Fortunately, it doesn’t sound like too big of a deal. The bigger/biggest concern is one of PR/branding backlash. From our call on Sunday afternoon with John York, it sounds like even that shouldn’t be our biggest concern. We should instead focus on the business model and business plan; if we can continue doing what we’ve been doing in the harmony of the community, then we’ll be fine. I remember that he also suggested we do a bit of brainstorming as to what we think the worst case scenarios are such that we’ll then be able to generate strategies to deal with them. My goals for this week are to write out a legitimate spec for the Connection Engine, or start on one at least, and start working on this business plan. We’ll want to have it done to a point where we can make a final decision by August first.
Adam didn’t have any redesign and rebrand concepts to show off at the meeting, but said he’d have some to share later this week. Our goals are to push this out by August 5th, although that would be coming up pretty quick.
That’s as far as I can get tonight. Sorry for the incomplete summary; I’ve been writing nearly the entire day it feels like. The audio is a good conversation.
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Today Joey, Daniel and I had a 40-minute call with my former entrepreneurship professor Jonathan Lind York about the for-profit vs. non-profit debate. Jon is a Yale graduate who has served as the CEO for three non-profits before switching to the for-profit world, so he has experience with this stuff.
He brought up a few key points:
- How a business functions isn’t based on whether it’s for-profit or non-profit
- The only difference NP/FP makes is in access to different sources of money and how the money is spent
- We shouldn’t put our mental energy into worrying about a backlash if we go for profit. We’re journalism students, afterall, right? We’re supposed to know how to communicate with our community and explain the reasoning behind the change.
Continue reading ‘Profit vs. non profit discussion with Jon York’
Call with Jon York:
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