It’s easy for entrepreneurs hatching startups to fudge the line between personal and business expenses. Is that laptop really used for your company, or for your kids? Are you discussing business at lunch, or gossiping with a friend? Beyond the typical admonitions about tax audits, running personal expenses through your business can backfire with employees, investors, partners, and buyers. I spoke to Ben Straughan, an attorney and partner in the emerging-companies practice at Seattle-based Perkins Coie. Edited excerpts of our conversation follow.
You work with a lot of startups. How common is this temptation to blur personal and business expenses?