I was watching Y Combination lectures at Stanford University and on lecture 17 at 32m30s they started to say that not paying founders is illegal and that you have to pay at least minimum wages. Which goes against everything they have been saying before like don't raise money before you have MVP and/or traction and do a lean startup.

Please don't comment without watching the video from 32:30 to 40:10, unless it's a link where it was thoroughly discussed.

https://www.youtube.com/watch?v=EHzvmyMJEK4&t=32m30s

I have to incorporate Now and start working with co-Founders and contractors and pay equity to them and assign IP and bind people with NDA, non-compete and IP assignment in relations to the company and raise some seed money. But YC term is still 4 month away.

BTW: We will be doing Dynamic Equity splitting similar to what is in "Slicing Pie" book by Mike Moyer.

So what is up with this "pay Founders a salary" ? Aren't all Founders that invest time into start-up are exempt from minimum wages even if they only have 1% and monetary compensation laws do not apply to them or do we need to sign special agreement between Founders to pledge that we are independent contractors and not employees of a company for the time being?

Which exact part of any law demands paying active Founders?

I will be very thankful if someone can explain this to me and everyone else, because people on the net have been asking this same question.

Max