The legal reality of getting paid as an underage SaaS founder

Merchant of Record platforms like Paddle and Lemon Squeezy are often suggested as a workaround for teen founders. We reviewed their terms of service to see if this is actually possible.

The Answer Up Front

For founders under 18, most major Merchant of Record (MoR) platforms are not a viable option without parental involvement. Contrary to common advice, platforms like Paddle and Lemon Squeezy require users to be 18 or older to sign their terms of service. Gumroad is the notable exception, allowing creators as young as 13, but it explicitly requires a parent or legal guardian to create and manage the account. The bottom line: MoRs are not a secret loophole for minors to accept payments independently. They are a way to operate commercially with the required adult supervision.

Methodology

This review analyzes the suitability of Merchant of Record platforms for founders under the legal age of majority (typically 18). The analysis is based on the public Terms of Service for three commonly recommended platforms: Paddle, Lemon Squeezy, and Gumroad. The source signal is a query from a 16-year-old founder on Reddit, posted in July 2026, who was advised by an AI to use an MoR after their parents declined to register a Stripe account in their name.

This v0 review, conducted in July 2026, covers the explicit age requirements and account ownership policies stated in each platform's legal documentation. It does not cover an independent test of the signup or KYC (Know Your Customer) process, payout mechanisms, or specific tax compliance issues, which can vary by jurisdiction. The analysis is a direct check on the claim that MoRs provide a way for minors to conduct business without adult involvement. Future updates will track any changes to these core terms.

What an MoR does

A Merchant of Record legally acts as the reseller of your product. When a customer buys your SaaS subscription, they are technically transacting with the MoR, not with you. The MoR handles payment processing, sales tax calculation and remittance, fraud detection, and compliance with global regulations like PCI-DSS. You, the creator, then have a simpler B2B relationship with the MoR, which pays you out after taking its fee. This model is powerful for abstracting away immense operational complexity, which is why it's often recommended to early-stage founders of all ages.

The promise for young founders

The appeal for underage founders is clear. Payment processors like Stripe require users to be 18 or older to agree to their terms and open an account. The MoR model seems to offer a workaround. Since the MoR is the legal seller, the thinking goes that the minor founder doesn't need to sign the same kind of direct financial contract. The AI that advised the original poster suggested this was a popular route for

The investor read

The recurring problem of underage founders needing to accept payments highlights a clear gap in the fintech and creator economy stack. While platforms like Step address teen banking, a compliant 'Stripe for Minors' does not exist at scale. An investable opportunity lies in a platform that solves this problem directly, likely through a custodial model that integrates parental consent, financial literacy tools, and a clear legal framework. This is not a massive market, but it is a high-intent, underserved niche. The growth of young, digitally native creators and builders suggests this problem will become more acute. Any solution would need to navigate a complex web of financial regulations (like COPPA in the U.S.) but could build a very sticky, early relationship with the next generation of founders.