Reference · Glossary
Founders Bible Glossary
Plain-English definitions of every founder, legal, and tax term used in this Bible. Hover any underlined term in a chapter to jump back here.
- AGSwitzerland
- Swiss public limited company. A capital company with formal governance, share capital of CHF 100,000 (at least CHF 50,000 paid in), and a clean separation between ownership and management. Often chosen by growth-oriented or investor-facing companies.
- AHVSwitzerland
- Switzerland's old-age, survivors and disability insurance. Self-employed founders register with the local AHV office; employees and employers split contributions. AHV is independent of the commercial register but matters for every Swiss founder.
- ArticlesGlobal
- The founding charter of a capital company. Defines purpose, share capital, share structure, and governance rules. Required at formation and amended only via formal procedure.
- Business modelGlobal
- How the business creates and captures value — what is sold, to whom, at what price, with what cost structure, and through which channels. Should be roughly clear before you choose a legal form.
- BylawsUnited States
- Internal rules of a U.S. corporation governing meetings, officer duties, share procedures, and decision-making. Adopted at formation; less public than articles of incorporation.
- C corporationUnited States
- A U.S. corporation taxed separately from its owners. Standard structure for venture-backed startups because it supports preferred share classes, stock options, and institutional investors. Higher administrative burden than an LLC.
- Capital contributionGlobal
- The capital founders pay in at formation in exchange for ownership. For a Swiss GmbH the minimum is CHF 20,000 (fully paid). For a Swiss AG, CHF 100,000 (at least 50,000 paid). U.S. entities have no fixed statutory minimum in most states.
- Commercial registerSwitzerland
- The official Swiss public registry of companies. For capital companies (GmbH, AG), the legal entity comes into existence with registration. For sole proprietorships, registration is required only past a revenue threshold.
- DBAUnited States
- A registered trade name used by a U.S. business to operate under a name different from its legal name. Filed at state or county level. Does not create a separate legal entity or trademark protection.
- EINUnited States
- A U.S. federal tax identification number issued by the IRS. Required to open a business bank account, hire employees, and file federal tax returns. Available to non-resident founders, though the application process is slower without a U.S. taxpayer ID.
- Federal taxUnited States
- U.S. tax obligations administered by the IRS, separate from state tax. Includes income tax, payroll tax, and self-employment tax. Even single-member LLCs file at the federal level.
- Founder agreementGlobal
- A written agreement between co-founders covering equity split, vesting, IP assignment, decision rights, and exit logic. Should be drafted as soon as the project becomes real, ideally before formation.
- GmbHSwitzerland
- Swiss limited liability company. Capital company with CHF 20,000 minimum share capital (fully paid), clean liability separation, and a relatively lean governance setup. The most common legal form for many Swiss founders.
- IPGlobal
- Intangible business assets — code, content, designs, brand marks, patents, trade secrets. Should be assigned to the company in writing, especially when contractors or co-founders contributed.
- LiabilityGlobal
- Legal responsibility for debts and obligations. Sole proprietors carry personal liability; GmbH, AG, LLC, and corporation owners are generally protected against business debts beyond their capital contribution.
- LLCUnited States
- A flexible U.S. business structure that combines liability protection with pass-through taxation by default. Often the right choice for service businesses, small operating companies, and solo founders who do not plan to raise venture capital.
- NotarySwitzerland
- A licensed legal officer involved in the formation of Swiss capital companies (GmbH, AG). Authenticates the formation deed and witnesses capital confirmation.
- PivotGlobal
- A meaningful change in the business — different problem, audience, value proposition, or business model — based on what validation revealed. Different from a tweak; closer to a deliberate course correction.
- Sole proprietorshipGlobal
- The simplest business form — one individual operating under their own legal responsibility. Easy to start; no liability separation; suitable for low-risk, single-founder businesses.
- State taxUnited States
- U.S. tax administered at the state level, including state income tax, franchise tax, and sales tax. Varies dramatically by state. Often the deciding factor in state-of-incorporation analysis.
- TrademarkGlobal
- A legally registered mark protecting a brand name or logo within a class of goods or services. Independent of company name registration and domain ownership. A free domain does not mean the name is trademark-clean.
- ValidationGlobal
- Structured testing of the riskiest assumptions behind an idea — the problem, the audience, the offer, and willingness to pay. Different from asking friends; closer to evidence collection.
- VATSwitzerland · Europe
- Consumption tax charged on most goods and services in Switzerland and the EU. Companies above the revenue threshold must register, charge, and remit VAT. The U.S. has sales tax instead, administered at state and local level.
- VestingGlobal
- A schedule under which founder or employee equity is earned over time, typically four years with a one-year cliff. Protects the company if a founder leaves early.
- Willingness to payGlobal
- The strongest signal in early validation — whether someone will actually pay, sign, or commit, not just say something sounds interesting. Polite enthusiasm is not willingness to pay.