One challenge that US startup founders face is the need to put their business on a good legal and compliance footing at a time when the business is very early stage and poorly funded. Unfortunately, the US is more litigious, and less forgiving, than many other countries, and “foot faults” are more likely to give rise to significant problems.
Making sense of a business’s health and long-term viability is a notoriously difficult problem for high-growth startups, but unit economics offers a framework through which companies can evaluate their potential. Here’s a real-world example: in December 2013, Homejoy, the Y-Combinator-backed home cleaning disruptor, raised a fresh $38M Series B at an estimated $150M post-money valuation. Less than two years later, the ...
In the early days of building a startup, the cap table shouldn’t take much of a founder’s attention. It needs to be accurate when it matters, but there are few moments when it matters early on. Because of an early-stage startup’s relatively simple ownership structure, many founders choose to manage the cap table on their own instead of paying for a SaaS subscription—or a lawyer—to maintain it.
Contracts are the mechanism by which people (and companies) create a legally valid or enforceable agreement between themselves. Most people encounter them regularly as adults—for example, when signing an offer letter for a new job—but relatively few people ever find a need to create one from scratch.
In our recent webinar When, Why, & How to Incorporate Your High-Growth Startup, Dan DeWolf of Mintz Levin and I discussed a number of topics related to incorporation, many of which we’ve touched on previously on this blog or in my book, The Startup Checklist: 25 Steps to a Scalable, High-Growth Business.