Start-ups: Where is your checklist?
As a tech entrepreneur you should spend most of your time on product design and development and on customer acquisition. We all agree on this. But that does not mean you can skip the boring stuff, i.e. corporate and legal work, as most entrepreneurs do. If you do, you’ll end up neglecting a key aspect of your business — and this will, at one point, come back to haunt you. You need to get organised and implement a corporate document system and plan ahead in terms of your legal and corporate document needs. This becomes crucial as you hire more people and raise capital.
So, first put together a checklist that will include the following from day 1:
- a minute book which will include all your incorporation and organisation documents (by-laws, resolutions, initial share subscriptions);
- your income tax, sales tax and business registrations with applicable governmental authorities;
- bank account documents and resolutions;
- IP assignment agreements with the founders;
- a shareholders agreement and stock restriction agreement as the case may be;
- a stock option plan for employees, service providers and advisers;
- a template for a service agreement with your service providers and advisers, which includes IP assignment, non-disclosure, non-solicitation and, if appropriate, non competition provisions;
- a stand-alone template for non-disclosure agreements;
- your DUNS number;
- your website terms and conditions, privacy policies and end-user license agreement as the case may be;
- a convertible loan agreement if you plan to raise convertible debt;
Second, go digital. Subscribe to a digital transaction management system to sign documents such as DocuSign and make sure that you don’t let legal documents go un-signed. Follow up everyday until they are signed by all parties. Remember, be organised and keep your house in order !
Third, keep your checklist updated (missing signatures, to-dos, etc.) and appropriately file your documents on a secured media!
Now you can get back to your product dev!