The Startup Checklist 25 Steps to a Scalable, High-Growth Business

The Startup Checklist is the entrepreneur's essential companion. While most entrepreneurship books focus on strategy, this invaluable guide provides the concrete steps that will get your new business off to a strong start. You'll learn the ins and outs of startup execution, management, legal issues, and practical processes throughout the launch and growth phases, and how to avoid the critical missteps that threaten the foundation of your business. Instead of simply referring you to experts, this discussion shows you exactly which experts you need, what exactly you need them to do, and which tools you will use to support them—and you'll gain enough insight to ask smart questions that help you get your money's worth. If you're ready to do big things, this book has you covered from the first business card to the eventual exit.

Over two thirds of startups are built on creaky foundations, and over two thirds of startup costs go directly toward cleaning up legal and practical problems caused by an incomplete or improper start. This book helps you sidestep the messy and expensive clean up process by giving you the specific actions you need to take right from the very beginning.

• Understand the critical intricacies of legally incorporating and running a startup
• Learn which experts you need, and what exactly you need from them
• Make more intelligent decisions independent of your advisors
• Avoid the challenges that threaten to derail great young companies

The typical American startup costs over $30,000 and requires working with over two dozen professionals and service providers before it even opens for business—and the process is so complex that few founders do it correctly. Their startups errors often go unnoticed until the founder tries to seek outside capital, at which point they can cost thousands of dollars to fix. . . or even completely derail an investment. The Startup Checklist helps you avoid these problems and lay a strong foundation, so you can focus on building your business.

DAVID S. ROSE is the New York Times bestselling author of Angel Investing; founder and CEO of Gust; and founder of New York Angels. He is an Inc. 500 CEO, serial entrepreneur, and early stage investor who has founded or funded over 100 companies. Named a "world conquering entrepreneur" by BusinessWeek, and "New York's Archangel" by Forbes, he was the Founding Track Chair for Finance and Entrepreneurship at Singularity University. David can be found online at davidsrose.com.

Foreword Bill Gross xi

Preface Why Every Entrepreneur Needs This Book . . . Instead of the Other 93,210 Books on Entrepreneurship xiii

Introduction 25 Key Action Steps (Plus One) for Every Entrepreneur 1

Part I Prepare to Launch 15

1. Translate Your Idea into a Compelling Business Model 17

2. Craft a Lean Business Plan to Serve as Your Venture’s Road Map 25

3. Find and Know Your Competitors 35

4. Build Your Dream Team 45

5. Allocate the Equity in Your Startup 55

6. Build a Minimum Viable Product and Validate Your Plan with Customers 63

7. Establish Your Brand with Online Public Profiles 69

8. Network Effectively within the Entrepreneurial Ecosystem 77

Part II Launch and Build Your Company 85

9. Incorporate Your Company for Protection and Investment 87

10. “Lawyer Up” the Right Way 95

11. Recruit Your Boards of Directors and Advisors 105

12. Select an Accountant and an Accounting System 113

13. Establish and Manage Your Credit Profile 123

14. Open Bank, Credit Card, and Merchant Accounts 131

15. Choosing Your Key Technologies, Platforms, and Vendors 139

16. Measure Your Business with Data Analytics 149

17. Round out Your Team with Employees and Freelancers 163

18. Establish a Stock Option Plan to Incentivize Your Team 175

Part III Raise Funds; Collaborate with Investors; Plan for Your Exit 183

19. Understand the Funding Process and What Investors Want to See 185

20. Nurture Your Investor Pipeline 197

21. Crowdfunding and Online Platforms 207

22. Survive the Term Sheet Negotiation and Investor Due Diligence 215

23. Get the Most from Your Investors, Now and in the Future 225

24. Understand Your Company’s Valuation 233

25. Keep Your Eye on the Exit and Reap the Benefits of Success 243

The Startup Checklist Online: Gust.com/Checklist 251

Appendices

Appendix A The Startup Reading List 253

Appendix B Sample Due Diligence Request 257

Appendix C Starting a U.S. Corporation from a Foreign Country 265

Appendix D Sample Convertible Preferred Stock Term Sheet 269

Appendix E Sample Convertible Note Term Sheet 285

Appendix F Sample Founder Accord 291

Acknowledgments 295

Index 299

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