ZenBusiness has raised $4.5 million in new venture capital. The funding round, led by Lerer Hippeau, is expected to help ZenBusiness reach their goal of launching a million new businesses by 2023.
The company offers a free way for businesses to start as a Corporation or LLC.
ZenBusiness is working to remove the “red tape” surrounding starting a business. Companies need to have a lot of regulatory paperwork done to ensure that they’re running legally. Annual franchise taxes, sales tax licenses, articles of incorporation and numerous other documents are needed to stay incorporated.
Small businesses that don’t know the logistics of these filings can have fines levied against them or even expropriation.
ZenBusiness helps bridge the gap by offering a “worry free guarantee.” The platform allows you to start your business for free, but businesses will still need to pay all state fees. The platform charges $10 a month and does what a lot of small business software fails to do: inform businesses of all reports and forms they need to file with their respective state.
The “worry free guarantee” will have ZenBusiness pay any fines for documents or forms that the company failed to inform businesses about.
ZenBusiness will use the funding round to help pay for these fines. The company will also use the funding to help fuel product development.
The company hopes to compete in a well-seasoned space that includes the likes of LegalZoom. ZenBusiness differs from LegalZoom, which has been in operation for nearly 20 years, by being an active manager of the companies created by the platform.
ZenBusiness is about maintaining a good standing with the government. Stripe Atlas, also a competitor, focuses on scalable startups and leverages the use of Delaware corporations in the process. ZenBusiness plans to help local businesses form in their respective states with simple structure and compliance.
Business formation services guarantee that submissions are sent to the state within 48 hours.
The company plans to leverage its capital to form a scalable cloud platform that has “limitless potential.” The company also mentions the possibilities of using blockchain technology to change corporate record filings.
Blockchain has been touted as a great way to create contracts with the ability to have built-in actions, based on the instructions in the blockchain.
“Our goal is clear: 1 million new businesses in the next 5 years that will translate into millions of jobs for all the employees of our customers and their families,” states ZenBusiness. The company plans to help new businesses stay compliant in their state while helping startups grow quickly.
Data models indicate that ZenBusiness has the potential to help one million businesses form in the next five years, creating 2.5 million new jobs with $100 billion in income flowing to employees and families.
Many employees are looking towards small businesses and startups to help fuel their retirement funds and make an impact in their industry. Guideline conducted a survey of 1,500 U.S. workers to find that only 48% of people that responded were somewhat confident that they’ll be able to retire.