Start Up Midterm

A product

Paying customer

What are the two things you need to start a business?

A real customer

An investor

First and second option for people to spend money on your business

Working prototype

Initial capital

Field-testable version

Paying customer

Cash-flow breakeven

Guy Kawasaki’s five milestones

Choose a name with Sec of State

Appoint directors

File articles of incorporation with the Sec of State

Write Bylaws

Issue stock

Apply for bus license

File form SS-4

Hold directors meeting

Steps to set up a C-Corp

Choose name

File articles of organization

Create an LLC operating agreement

Obtain licenses and permits

Retain your limited liability by keeping financial records and recording minutes

Steps to set up an LLC

Yes

Can you convert from an LLC to a C-Corp?

C-Corp

Big businesses will want to be an

LLC

Small businesses will want to be an

Qualified small business stock

US tax benefit that applies to eligible stock holders of small businesses

Passion

Purpose (not money)

Stake in the company

What makes up a co-founder’s passion?

Similar Passion

Optimism

Enjoy working together

Three things a co-founder needs

Vision

Size

Commitment

Things to have in common with your co-founder

Expertise

Orientation (Details vs big picture)

Perspective

Things to be different with a co-founder

Don’t rush

Don’t add founders for fundability

Plan for the worst (stock vesting)

Tips for picking a co-founder

No

Do you need a CEO right off the bat?

Experience in start-ups

Connections

Can push the team

Good at sales

Passion

What a CEO needs

5 years

To get the QSBS you need to own stock for

Adjacent industry

When choosing a name, make sure it is not in an

Company Name

Domain

You need to trademark the

Fed Employer ID Number

Unique nine-digit IRS number identifying businesses for tax purposes.

Fed Employer ID Number

If you have employees or file taxes you need a

State tax

You have to register for

Product and Customer

Business structure

Fed EIN

Licenses and Registration

Taxes

5 Legal things to do for your business to be set up

So they can’t sue for your personal assets

You need to create a company bank account

Annual report / tax statement

Taxes

Renew licenses

Legal must do’s for an LLC

Board meetings with minutes

Keep corporate records

Annual report and franchise tax

Filing taxes

Renew licenses

Legal must do’s for a C-Corp

Delaware

In which state should we incorporate?

Yes

Should our investors be accredited?

25% - Future employees

35% - First 2 rounds of investment

40% - For founders

How to allocate business ownership

Preffered

Common or preferred stock for investors?

Vesting

The process of earning full ownership of employer-provided benefits over time.

No

Should we pay consultants with stock options?

No

Should we get a bank loan to start our tech business?

No

Should you use an investment bank, broker or finder to raise seed capital at an early stage?

Close to comparable successful public company

What do you want your revenue projections for the next 5 years to look like?

No

Should you write a business plan?

Advisors

A CEO should be able to connect you with good

No

Should we use a headhunter to recruit people?

Get the opinion of 3-4 investors and then get market traction to push it up

What should we tell investors when they ask us for the valuation of the company?

Social media

Cheap way to build buzz

Zero - use social media

How big should our advertising budget be?

5-10%

CEO equity

Bouncing board

A board of advisors can act as a

Industry experts

Approach those you couldn’t before

Leverage your first advisor to find

Vesting stock

You can offer board members

Working prototype

Don’t finance until you have a

Get a co-founder who can develop

Work nights and weekends

Business plan comps

Support groups

Incubator / Accelerator

If you need money for dev here are your options:

Incubator / Accelerator

Program providing mentorship, resources, and funding to grow early startups.

Talk

If you want money you should

Get someone experienced to help

Get legal advice

Be aware of laws

Financing tips

Outsourcing

You can save a lot of time with hiring by

Simplify

MeToo

Virtualize

Remix

Disrupt

Extend a current solution

Mission impossible

Types of business ideas

Brainstorm problems and solutions

How to come up with a business idea

Blink test

A test that checks if a visitor can gather the main message of a web page in less than 5 seconds