This post is based on a question I have seen online many times. Q. Can I have a corporation with multiple businesses?
A. Yes, you can have a corporation with multiple businesses. Furthermore, those businesses need not be similar or related. So, for example, your corporation might do both software development and per sitting.
However, there is a more important question. Should you have a corporation with multiple businesses?
In an article published today (Venture Capital to Suppress Its Appetite for Risk in 2013), the Wall Street Journal reports that venture capitalists have dramatically lowered their appetite for risk, reducing the power of Internet entrepreneurs who are seeking funding.
The article notes that:
- In light of disappointing stock-market performance of Facebook, Zynga and Groupon, VCs are investing less in consumer Internet companies.
- During the past year, valuations have gone down significantly.
- On a quarter-over-quarter basis, the number of deals, the amount invested and the percentage of “up” rounds all have declined.
Before starting my law practice five years ago, I provided legal services in-house as VP and Legal Counsel at Visa International Service Association (now Visa, Inc.). Visa was a great place to work, and I considered myself fortunate every day that I worked there.
But now that I am removed from that experience, I realize that Visa and I were not a perfect fit. Financial services are about minimizing risk. I’m not. Although I am not foolhardy, I am willing to weigh risk vs. reward.
That’s why my clients are small, entrepreneurial companies, typically start-up or early-stage. Entrepreneurs balance risk and reward every day, making us a good fit. And that’s why my law practice gives me the greatest professional enjoyment of any position I have ever had. I consider myself even more fortunate, now.