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TL;DR: Would presenting your SaaS on the world web stage as created by a UK business (ltd), instead of by a continental European individual with a non-English sounding name, make a difference in terms of gaining traction? Context

I'm soon going to launch a Twitter marketing related SaaS (pro.hashtagify.me). I'll use FastSpring for payments, so I don't need to incorporate to receive payments from businesses and to deal with VAT.

If I'll get traction I'm going to incorporate for sure, but I'm wondering if incorporating (in the UK) before launch anyway would be worth the hassle, just to present myself as "Hashtagify Ltd" instead of "Daniele Mazzini". I'm thinking about the trust you would give an unknown entity just for that difference. What do you think (or, even better, know by experience)?

PS: I also launched a poll on HN, but would like to get reasoned answers

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3 Answers

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Good question, which I voted up because I asked this myself many times. I have no conclusion for it, just a feeling how I want to try.

I use my real name as my cooperate name. Of course I have a brand (my product), but for business - means all transactions, payments, official coomunication - I use my real name. I have chosen to do so because I thought, what, if somebody does a research and finds out that I am a one man show who has incooperated only to get more attraction? Then I decided to show people "what I am", open, honest and try to avoid confusion. After all, having a strange sounding name but a company in the UK is for me like hiding from the sun and gives me a strange feeling.

I know some people prefer an english name, even when there is chinese business man behind, which is not only curious, it is a joke when we look at todays business, were we all work in an international environment. Anyway... I am waiting for the outcome of your poll.

Cheers Christian

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Thanks for the answer Christian. If you want to know the answer to the poll, please upvote it on HN, it's getting a few answers but no votes and soon will be outside the "new" page... ;) – danmaz74 Dec 29 '11 at 10:31
By the way: First impressions are exceedingly important, so, even if with a little research you would easily learn that my company is just one man (actually, my wife is helping on SMM), that could be not a problem. – danmaz74 Dec 29 '11 at 10:47
I upvoted it on HN. – Christian Dec 29 '11 at 10:54
Thanks - unfortunately, the votes to the poll stopped :( 8 votes aren't significant, we'll have to live with this doubt for now – danmaz74 Dec 29 '11 at 12:15
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I would be surprised if this was a deciding factor for people using your service or not. There is no question that it would look more professional as a business name, but as for being a deciding factor, I don't think so. With that in mind, if you want to do it later once you have traction I see no problem with it.

I just can't imagine that this decision could be the reason that makes or breaks your business, so save some dollars for now.

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Thank you Joel. From a rational point of view I too don't think that it would matter so much, but my doubt is that psychologically the first impression would be very important... I'll think about it some more ;) – danmaz74 Dec 29 '11 at 13:50
up vote 1 down vote

Businesses like to deal with other businesses, so being an Ltd would give a better impression for potential commercial clients. They like the comfort of the business, rather than just a one-man-band. Of course, you may be a one-man Ltd, but that doesn't seem to occur to them so readily.

Also, it is worth keeping in mind that there are many advantages to being a limited company, most importantly the word "limited" means that if things go wrong, your personal assets are not at risk. As a sole trader (self-employed) you can lose everything, but with the Ltd your liability is limited to the share capital you invest (which can be a nominal amount).

Running a UK Ltd is fairly trivial and there are some useful tax advantages, so I never see why anyone would be self-employed or act as a sole trader, when an Ltd is so beneficial.

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Well, but of course Companies know that a LTD is limited. And if you fail, you simply can open another one and continue from there. This is not very trustworthy to invest money in such a company. Of course, if a legal agreement fail they cannot get out money from you. To my knowledge companies prefer to coop with other companies with much money in back or stay away from 1$-limited. – Christian Dec 29 '11 at 14:36
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The advantages of limited liability are very important as you grow, but with my business model I don't expect to have any problem worth noting in that area at least at the start. As for taxation, I would need to pay Italian taxes anyway as long as I do business from Italy. But the better impression could be very important; I'm still undecided. Anyway, thanks for the suggestions! – danmaz74 Dec 29 '11 at 20:50
@Christian I don't think you understood what I was saying and some of your comments seem disconnected with reality, as I have experienced it, here in the UK. All companies are "limited", from one-man-band tax-mitigating vehicles to giant global corporations. That is actually the original motivation for the "company" to be invented, several hundred years ago, if you study the history of these things. – Steve Jones Dec 30 '11 at 8:06
@danmaz74 If you intend to incorporate later, I would seriously consider doing it on day one, as the (minimal & trivial) additional work in the beginning is better than the complex procedures you'll have to follow later, especially as it'll inevitably happen during a busy period of expansion, when you really should be concentrating of growing the business. The limited liability may be useful for a small business too, you just never know. I don't know the specific rules for Italy, but as the UK and Italy are part of the EU, the tax situation should be simple (no x2 tax). Of course, IMHO, YMMV. – Steve Jones Dec 30 '11 at 8:11

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