Anti-Cacophony Partners
You’ve Got Your Idea, Now You Need to Launch… But How?!
Congratulations! You’ve taken your passion and launched an exciting new venture. But to build something spectacular, you’ll need to construct a firm administrative foundation. This becomes especially critical if you expect to take venture funding.
Obtain your domain
Before you order personalized stationery and business cards, confirm your preferred domain is available. Once you’ve found the perfect domain, consider registering multiple domains to protect your online presence — it’s good practice to buy common extensions (.org, .net, etc.) as well as common misspellings or company nicknames.
Hire an attorney
Find a trustworthy attorney who can guide you through the unexpected legal issues that may arise. Ask respected friends for recommendations and take your time finding the right fit for your organization.
Keep in mind a key tradeoff: brand-name firms (Wilson Sonsini, Orrick, Fenwick & West) are expensive, but they give VCs comfort that you’re well-protected legally. Also evaluate firms like Silicon Legal Counsel, whose partners often came from those brand-name firms.
Talk to your counsel about using an equity management service such as Captable.io (it’s free!) or Carta (widely adopted by startups and law firms alike) to manage your cap table. This makes it easy to track ownership, understand how many options you have to offer employees, and even model your next round of financing.
Check your compliance
A few key steps protect you and minimize future federal, state, local, and institutional fundraising challenges. Consult your corporate attorney on all of this:
- Register for your federal tax ID, also known as a Federal Employer Identification Number (FEIN) — like your company’s social security number, and required.
- Incorporate as a C Corp in Delaware. Investors find it hard to invest in LLCs from a tax perspective, and Delaware’s legal and tax laws are the most favorable for corporations.
Open a bank account
Whether your company will be accepting funding or pulling from an internal source, it’s important to build a relationship with a reputable bank.
- Begin by opening a checking account with a bank that has strong startup relationships and a user-friendly online portal.
- Look into a no-collateral credit card at a company like Brex, which allows credit based on your cash balance without a personal guarantee — something very few other cards offer early-stage startups.
Set up payroll & benefits
You can’t pay employees without a payroll system, and it will be nearly impossible to attract talent without benefits. There are lots of clunky payroll and benefits systems out there, and choosing the wrong one drains your limited time. Gusto has done a good job automating much of the time-consuming activity around payroll and benefits — onboarding, compliance, fully automated payroll, and a user-friendly benefits portal. Also worth checking out: Zenefits, Rippling, or JustWorks (a PEO).
Set up Gmail & document storage
Google’s suite of products is invaluable, from Gmail and Calendar, which practically every startup uses, to Google Docs, which provides fantastic real-time collaboration across its versions of Word, Excel, and PowerPoint.
Then decide where you’re going to store all your documents, and set up (and use consistently!) an intuitive folder management system so you and your employees know where documents live. Due diligence during fundraising will be nearly painless if you’ve been consistent about document storage from the start.
Choose your outsourced accounting partner
Unlike a bookkeeper, an outsourced accounting firm can scale with you and provide a ton of value-added services at a fraction of the cost of a full-time team. Choose one that offers full-stack services, from accounting clerk all the way up to CFO. They can:
- Help ensure you remain compliant with accounting policies, tax registrations and filings, and general compliance requirements.
- Track your expenses (and hopefully revenue) accurately and consistently from the beginning, to proactively identify opportunities for improvement.
- Provide strategic resources (Controllers, CFOs) that can be layered in as you grow, to help evaluate strategic opportunities financially, manage and forecast cash, and get you ready for your next round of financing.
- Recommend and help implement the best back-office tools, including QuickBooks, Bill.com, Expensify, HubSpot, and more.
Build your revenue model
More than just a fundraising tool, a good revenue model provides you a go-to-market roadmap. What’s your target market? How will you reach your customers? What resources will be required? How long will it take? How will you price it? How much will it cost to deliver? If you’re handy with Excel, do it yourself, or ask your outsourced accountant to help put together a lightweight one. Then use it — track your progress against it, and update it when you discover what works and what doesn’t.
Find a workspace
Not building a remote-only startup? Your employees will need somewhere to go. Do you need a private office, or are dedicated desks fine? Enough conference rooms and phone booths for private conversations? What amenities matter to you? Are there limits on working hours? Is it conveniently located?
Celebrate (for just a minute… then get to work)!
Starting your own company is one of life’s great adventures. Pop open a bottle of bubbly and celebrate — this is the beginning of something wonderful!