Stripe has a history of shutting down legit businesses and blocking payouts of their rightfully earned income, whilst also profiting off those frozen funds by investing it.
Stripe is a payment processor which basically means they process the payments for you, so you do have to figure out the tax part yourself (or use their tax product, but you're still the one responsible for it.)
Lemon Squeezy is a merchant of record which means _they_ act as the merchant and sell the product to your customer. So they'll collect VAT and make sure it lands in the pockets of the right country etc. and will pay you only the remainder (minus their cut).
Since Lemon Squeezy uses Stripe under the hood as their payment processor you had to basically pay a cut to two companies if you used Lemon Squeezy but in exchange you literally have to worry about nothing. You just get a nice B2B reverse invoice and don't have to break your head around world wide (and especially EU) tax laws.
I really hope Stripe will double down on the whole MoR thing, it makes processing payments online so much nicer and less annoying.
It’s scary how big stripe is becoming. Instead of competing just buy up other companies. Might be another company that will require regulatory intervention and break them up (same as when the govt broke up the railroads)
As someone from a country not supported by Stripe, it is annoying how frequently I find some tool that I might want to use, only to discover Stripe's the only payout option.
> Nine months after our public launch in 2021, we surpassed $1M in ARR and never looked back.
Stripe is buying a lucrative business, but more importantly it is buying the complex knowhow of running an international tax-compliant merchant of record. They can then integrate this into their product. I switched to LemonSqueezy primarily out of concern for EU-wide tax ramifications (EU strikes again). Is there a reason to choose LemonSqueezy over Stripe if you are located in the US? There hasn't been a single VAT-compliance case to my knowledge and the need for MoR is unclear.
I've never understood the notion that US based companies have it easier. They still to pay applicable tax in every country/state that their customers reside.
If anything, EU companies have it slightly easier because they can file all of their EU-based taxes using One Stop Shop.
You can do Non-Union OSS as a US company as well. I’d say the most annoying thing about the EU is their minimum transaction to start filing is very low compared to US Nexus rules.
> Is there a reason to choose LemonSqueezy over Stripe if you are located in the US? There hasn't been a single VAT-compliance case to my knowledge and the need for MoR is unclear.
It's not just the EU that charges VAT (or VAT-like taxes).
Most countries (and in the US's case, subregions within) charge some form of sales tax that's a pain to manage yourself if you're not a huge operation.
Always good to comply with tax laws (if not for the obviously good moral/ethical reasons, then definitely for legal reasons!)
In addition to the overall benefits of not having non-compete agreements, California's software startup ecosystem also benefits from not having to deal with charging sales tax when selling SaaS[1][2]
US states have a minimum threshold of $100,000 and upwards so you can be compliant without having to worry about it until you start making larger revenue. Most startups never reach these generous thresholds in the first place.
It does make sense if and if the following apply: (a) you have touched the brand and trust it over other offerings (b) are tech-literate but semi-technical or non-technical or simply don’t want to do anything more than a couple of clicks implementation (c) you are early enough in your journey that sales and revenue matter more than cost of revenue (d) any of the above originally but you solved those problems and now intertia/tech debt somewhere more urgent.
That’s a huge number of aspirational digital product vendors.
5 + 50 vs stripe’s lower direct take (for me 1.5 + 20). I just did a quick calculation on a really basic/modest digital product business. Sell something at €25 and sell €50k - 2000 customers. That’s going to be €7k with LSqz over a year, and with Stripe it’s going to be €1.15k
The difference is €16 a day.
The business makes you €137 a day.
If you spend a day each month sorting out admin and taxes because of stripe direct plus a few days paying a developer (you’re non-technical remember!) then that could easily be a cost of €5500 a year. Total cost including card processing is €6150 and it’s only €850 less than LemonSqueezy.
Why would you move?
And in particular why would you move sooner than 3 years if you are predicting similar revenue each year.
this! im selling a subscription with this pricing model and it’s quite painful to swallow. having that said i really enjoy using lemon as my payment processor
>Nine months after our public launch in 2021, we surpassed $1M in ARR and never looked back.
>Along the way, we received many acquisition offers and (Series A) term sheets from investors. But despite the allure of these opportunities, we knew that what we had built was truly special and needed the right partner to take it to the next level.
Wow. This is quite the smart and ballsy move. Congrats to the team. Looks like y'all knew what you were doing.
I found these surprising as I didn't see them mentioned on the pricing page near "Transaction fees ... 5% + 50¢" (https://www.lemonsqueezy.com/pricing).
Yes, Lemon Squeezy was not competitive with Paddle at all. They try to upsell users by offering more "nice to haves" like newsletter builders and ecommerce tools but for most SaaS founders Paddle is a much better deal.
Good to see M&A get back on track -- PC, whom I would trust much more than any living economist, must be somewhat positive about the near future? Congrats to the lemon squeezy team!
I like to root for the home team (tech entrepreneurs like my former self getting paid out for taking a risk makes me happy)
M&A activity is a positive sign for the economy. Stripe wouldn’t be buying companies if they thought the economy was about to fall off a cliff, and Stripe is full of smart people (disclosure: I am a former Stripe).
If there were no acquisitions happening, starting (another) company would be much tougher to justify to my wife and my self.
Totally and this is the problem with startup founders of today. Their minds are filled with liquidity and an exit event. Steve Jobs had famously said how pathetic that is. And Zuckerberg, love or hate him, turned down billion dollars.
Selling your startup is not a good plan. Make it big, change the world, and swim in money.
If you have a swimming pool worth of money, or a pond, or a canal, or a river, or maybe an ocean - you can swim in all these. Some founders maybe don't want to turn 58 trying to reach that perfect cubic m. volume of water to be able to swim. They might rather want to start swimming when they are kinda younger (30s maybe?). Who knows. And while already swimming they might want to get another pool, maybe an olympic size later and so on, instead of keep waiting for that "perfectly sized water body for them".
> change the world
Oh ffs. Really? Is that even a thought on the distant horizon of startup founders? Haha.
Readit News
Sad to see lemon squeezy acquired by stripe.
Dead Comment
Dead Comment
Empty words.
Lemon Squeezy is a merchant of record which means _they_ act as the merchant and sell the product to your customer. So they'll collect VAT and make sure it lands in the pockets of the right country etc. and will pay you only the remainder (minus their cut).
Since Lemon Squeezy uses Stripe under the hood as their payment processor you had to basically pay a cut to two companies if you used Lemon Squeezy but in exchange you literally have to worry about nothing. You just get a nice B2B reverse invoice and don't have to break your head around world wide (and especially EU) tax laws.
I really hope Stripe will double down on the whole MoR thing, it makes processing payments online so much nicer and less annoying.
Zuck has shown the way.
Stripe is buying a lucrative business, but more importantly it is buying the complex knowhow of running an international tax-compliant merchant of record. They can then integrate this into their product. I switched to LemonSqueezy primarily out of concern for EU-wide tax ramifications (EU strikes again). Is there a reason to choose LemonSqueezy over Stripe if you are located in the US? There hasn't been a single VAT-compliance case to my knowledge and the need for MoR is unclear.
If anything, EU companies have it slightly easier because they can file all of their EU-based taxes using One Stop Shop.
It's not just the EU that charges VAT (or VAT-like taxes).
Most countries (and in the US's case, subregions within) charge some form of sales tax that's a pain to manage yourself if you're not a huge operation.
Always good to comply with tax laws (if not for the obviously good moral/ethical reasons, then definitely for legal reasons!)
[1] https://www.taxjar.com/blog/saas-california-sales-tax [2] https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1502.html
Reduce the price to Stripe pricing + 1%, and this will be the default for everyone!
That’s a huge number of aspirational digital product vendors.
5 + 50 vs stripe’s lower direct take (for me 1.5 + 20). I just did a quick calculation on a really basic/modest digital product business. Sell something at €25 and sell €50k - 2000 customers. That’s going to be €7k with LSqz over a year, and with Stripe it’s going to be €1.15k
The difference is €16 a day.
The business makes you €137 a day.
If you spend a day each month sorting out admin and taxes because of stripe direct plus a few days paying a developer (you’re non-technical remember!) then that could easily be a cost of €5500 a year. Total cost including card processing is €6150 and it’s only €850 less than LemonSqueezy.
Why would you move?
And in particular why would you move sooner than 3 years if you are predicting similar revenue each year.
>Along the way, we received many acquisition offers and (Series A) term sheets from investors. But despite the allure of these opportunities, we knew that what we had built was truly special and needed the right partner to take it to the next level.
Wow. This is quite the smart and ballsy move. Congrats to the team. Looks like y'all knew what you were doing.
I found these surprising as I didn't see them mentioned on the pricing page near "Transaction fees ... 5% + 50¢" (https://www.lemonsqueezy.com/pricing).
I like to root for the home team (tech entrepreneurs like my former self getting paid out for taking a risk makes me happy)
M&A activity is a positive sign for the economy. Stripe wouldn’t be buying companies if they thought the economy was about to fall off a cliff, and Stripe is full of smart people (disclosure: I am a former Stripe).
If there were no acquisitions happening, starting (another) company would be much tougher to justify to my wife and my self.
From branding to the all UVP, it was a fast exit because it was meant to be.
Still a massive achievement
Selling your startup is not a good plan. Make it big, change the world, and swim in money.
they are looking at quick exits especially in this high interest rate environments and so are the backers
Very few entrepreneurs are looking to create companies that will provide its workers with forever jobs
It's sad but those few that are grinding it out and creating jobs, helping economies in those countries run proper are the unsung heroes.
Time will tell where this American greed will take Americans but so far, its not looking good.
If you have a swimming pool worth of money, or a pond, or a canal, or a river, or maybe an ocean - you can swim in all these. Some founders maybe don't want to turn 58 trying to reach that perfect cubic m. volume of water to be able to swim. They might rather want to start swimming when they are kinda younger (30s maybe?). Who knows. And while already swimming they might want to get another pool, maybe an olympic size later and so on, instead of keep waiting for that "perfectly sized water body for them".
> change the world
Oh ffs. Really? Is that even a thought on the distant horizon of startup founders? Haha.