While some things you can do on your own, it’s best to consult with a lawyer when starting out, so you can make sure you’ve covered everything that you need. Just realize that some of that advice, solicited or not, will be good.
A startup must have a good “elevator pitch” (as discussed in point #6) and a strong investor pitch deck (as discussed in point #18) to attract the interest of a VC. Before approaching a venture capitalist, try to learn whether his or her focus aligns with your company and its stage of development. Startups seeking financing often turn to venture capital firms, which can provide capital; strategic assistance; introductions to potential customers, partners, and employees; and much more. Your first order of business should be to determine your specific insurance needs based on the nature of your business. Ask yourself what risks must be covered and how much coverage will be sufficient. Then find and evaluate insurance providers or insurance brokers to determine which companies handle the types of coverage that suits your needs. One of the biggest mistakes made by startups is not raising sufficient capital.
A contract is, in essence, a written meeting of the minds. “Consideration, ” whether it is monetary or a promise to do work or provide a service by a specified date, is at the root of a contract. Set parameters, such as a time frame, in which the terms of the contract will be met. Business contracts are legally binding written agreements between two or more parties. They are an important part of business and such agreements need to be created and/or negotiated carefully.
Have a smart social media plan to drive traffic from Facebook, Twitter, LinkedIn, and other free social media sites. You don’t want a date on the cover page that is several months old. And you don’t want information or metrics in the deck about your business that look stale or outdated. Do plan to have a demo of your product as part of the in-person presentation. Startups frequently prepare a “pitch deck” to present their company to prospective angel or venture capital investors. The pitch deck typically consists of slides in a PowerPoint presentation and is intended to showcase the company’s products, technology, and team to the investors.
If so, think about the current offerings and focus on how you can create something better, cheaper or faster. People would rather have less of a bad thing than more of a good thing. If your business can fix a problem for your customers, they’ll thank you for it. If you’re on Entrepreneur, odds are you already have the drive, but you might not know how to start building your empire. Companies such as Zappos and Virgin America became hugely successful because they focused on providing excellent customer service and support. You want your early customers to give referrals and sing your praises to their friends and colleagues.
Length of lease term. Landlords are typically willing to make concessions for longer-term leases. However , your company’s needs may change and you could find yourself locked into a lease for an office space that is too small , too big, or with rent that is above-market if demand for space subsequently declines. Try to negotiate a shorter-term lease with renewal options—a two-year lease with a two-year renewal option, for instance, rather than a four-year lease. Keep in mind that your ability to negotiate an office lease is dependent on how much leverage you have. Factors such as these may mean the difference between you calling the shots, or a landlord insisting on onerous terms throughout the lease process. The term “standard contract” is more myth than reality, and too often people simply sign on the dotted line without reading or negotiating the terms of a contract. A startup has to make sure it is comfortable with all of the terms of the contract, and depending on the deal dynamics, almost any term is negotiable.
That’s why you should have a plan on how to receive feedback. Let people interact with your product or service and see what their take is on it. A fresh set of eyes can help point out a problem you might have missed. Plus, these people will become your first brand advocates, especially if you listen to their input and they like the product. Also, go out and meet people and ask them questions, seek advice from other entrepreneurs, research ideas online or use whatever method makes the most sense to you.
If John leaves the company or is fired before the end of his first year, he doesn’t get any of the options. Consider using a tenant broker. A good tenant broker can be invaluable and will represent your company’s best interests. The landlord insists on personal guarantee of the key shareholders of the company. Assignment and subletting. Startup companies should negotiate enough flexibility in the assignment and subletting clause to allow for mergers, reorganizations, and share ownership changes. Watch out for a clause that says a change in more than 50% of the company’s stock ownership will be deemed an assignment that is prohibited without the landlord’s prior approval. As your company grows and new people invest in it, this clause can be inadvertently triggered.