startup paperwork

Take all of that startup paperwork very seriously.

startup paperwork

Personally, I don't enjoy paperwork, let alone, startup paperwork.  If I could find a way to find the mental space to just sit and get into flow on a task, a project or something single minded, even it were startup paperwork, today I think I crave that mental feeling.  

So for anyone out there that's doing that startup fundraising thing (especially from angel and seed investors), here are a few bullets of things I've learned along the way, having raised funding, now in over 5 different successful rounds.  

1. Plan ahead - to not just the end of this cycle of fundraising, but to 1-3 years out.  How long is this really going to take you?  Where are you headed with it?  What's the next cycle or few going to look like?  What do you need to accomplish with this?  How sure are you that it'll happen?
2. Set up your company structure correctly.  It's foundational.  Think about if you want to be company or founder or investor friendly.  If there's an exit event, how do you envision things to happen?  Advisors, employees, investors, and consultants, think about all of the administration that matters.
3. Fundraising process - fundraising is definitely a process.  Think of it like a sales process: a) the "big" list that's unvetted, b) do you have a way to reach people on that list, c) have you reached out, d) have you followed up, e) when's the next time to follow up, f) have they replied, g) have you followed up, h) has a phone call been setup, g) are they interested? h) send them your term sheet, i) have them sign the document, j) have them wire in the funding, k) you sign the document, l) put a number on the document and a date on when the funding was received, and m) send in that document to your lawyer for processing.
4. Terminating an advisor, employee, or consultant - Always, always, always, ... ALWAYS follow up with a written letter to that person that documents the date and end of the relationship.  ALWAYS.  Let your lawyer know.
5. As you create/get documentation - organize it as you go.  Organizing all of the startup paperwork at a "later" time is EXTREMELY painful.  
6. The company option pool - has a LIMIT of how many options you can even OFFER other people, even if they NEVER take it.  Make sure the Board approves any offers of shares to ANYONE first.  
   
7. The Board of Directors matters - Make sure any action around shares of the company are always follow a signed board consent FIRST.  Whoever is on that board should be willing to put the Company's interests ABOVE their own, and definitely above any personal relationships.  
8. Make anyone that works with the company sign a PIIA/NDA - making sure this happens is very important.  You want to make sure the Company's intellectual property is formally the property of the Company.  
9. Have an Employee Handbook - make every single person that is an employee of the company sign it.  
10. Have an Accountant you trust - that you can call any time.  Pay your taxes on time.  Don't skip it.  Don't miss it.   Make sure your accountant and your lawyer at least know of each other.

Those are my takeaways that come up top of mind for me.  Startups are often the land of ideas and fantasy for a lot of people.  What I've learned is that it really does come down to execution, because the devil is in the details.  

​Arry