Doola Business Formation Review: 2023 Vendor Analysis

As someone who’s worked with early-stage companies my entire career, I have a lot of opinions on how formations should be handled.

…And as an Australian operating in California, Doola’s focus on global founders obviously spoke to me.

I’ve tested close to a dozen formation services while building our startup database here at NanoGlobals. Doola offers a strong customer service experience, but we no longer recommend their services to clients for a few factors; namely add-on costs and reliability issues with startup companies.

These issues are particularly impactful for startups that intend to raise capital, since investors already know and understand setups from the primary players like Stripe Atlas. Compliance costs are also hard to estimate compared with LLC-focused services like ZenBusiness. (View current Doola package rates here.)

However, the biggest issue I have with Doola has nothing to do with their service quality: it’s simply that the company is only a couple years old.

As a Y-Combinator startup, I fully expect they’ll be acquired by one of the larger players in the next year or two, or pivot due to the intense competition from larger established providers like ZenBusiness or LegalZoom. For that reason we almost always suggest established services like ZenBusiness or Bizee (Formerly IncFile) for our clients.

Doola pricing

As a newcomer, our database of formation service pricing found Doola’s entry pricing to be slightly lower than their main competitors like Stripe Atlas and Firstbase:

However, they do push upsells around compliance and taxes that can drive the final price to over $2000.

Consultants and small e-commerce brands can simply ignore the upsells. For startups with high fundraising aspirations, my opinion is that it’s actually well-priced compared with dedicated legal consult.

Doola key features

Doola is different from the other main players in company formation because they focus on “business in a box” service rather than just the initial formation aspect.

Companies like Incfile and ZenBusiness claim ultra-low costs by dropping all ongoing support and only doing the raw baseline of compliance services. (EIN setup, formation paperwork with the state, etc.)

Doola tries to lengthen the customer relationship with add-on services like business bank account, phone number and VoIP service, tax advising sessions, and more.

It’s an unusual bet, but it seems to be paying off as the company went from an initial $3M fundraising round in 2021¹ to 8X growth and a $8M second round in the end of 2022.²

Differentiation metric: customer service and ongoing support

The long-established playbook for US company formation services is simple: file the paperwork, then leave the customer to figure out the details.

Doola has been trying to disrupt this model by providing ongoing support in a semi-automated fashion.

My first-hand experience engaging with Doola’s team is that they have a strong culture and drive to provide continued support to their customers. When you tweet at the company, the founder responds.³ When you engage chat, a real person replies.

So how do you get started with doola? Hear from Arjun to get answers to questions you might be wondering about 👇#business #LLC #smallbusiness #startup #formation pic.twitter.com/5JHKRRGFmz

— doola (@doolaHQ) October 19, 2022

This may sound like table stakes, but in the company formation space, it’s actually rare.

Doola Feature set

Stripe Atlas has a major incumbent advantage in the discounts they’ve established with vendors like Amazon AWS. If your company is going to have high ongoing cloud hosting bills, the go-to players like Firstbase and Stripe are hard to argue with.

Doola’s feature set is geared towards more “mid-range” companies and startups. The emphasis is less on free add-ons, and more on the “business in a box” service of formation, tax, compliance, legal advising, and phone number from one vendor.

This would typically cost five-figures USD from traditional firms, and run the risk of engaging with vendors that don’t understand online business.

The key issue we see with Doola’s services is that the hands-on customer support may be hard to scale. It’s not clear how big an issue this will be if they become the go-to place for US corproate formations from large markets, e.g. India.

Report summary: who is Doola for?

Doola formation services are particularly popular with regions that do a high volume of business with and inside the US, such as India, Mexico, and Europe.

They’ve slowly honed in on this demographic through a number of rebrands, starting as “StartPack” from Distributed, Inc. and moving to the “Doola” brand once they figured out the market most in need of a dedicated service.

LLC formation is a hot area in the US, with a variety of services like ZenBusiness offering $0 first-year formations. Rather than bank on long-term customer value like the big players, Doola is betting that many founders would prefer to pay for dedicated service at a markdown from inernational lawyer rates.

Our opinion is that this is a strong bet. For that reason, it’s the service we most commonly suggest to “NanoGlobal” founders looking to benefit from US corporate structures.

Frequently Asked Questions

How much does Doola company formation cost?

Doola charges a base price of $197 for LLC formation. Add-on pricing for legal advising and tax compliance services goes into the low thousands of dollars; this is lower than standalone corporate advisers, but above most formation automation services.

Is Doola legit?

Doola is a newcomer to the company formation space. Our review metrics rank them at 3.2 out of 5 stars in 2024. The key drawback of Doola is that they are a startup company with limited history, meaning that you run the risk of having to change your vendor if they are acquired or shut down — which is extremely common for YC startups.