Startup Checklist - ClearThink Capital

Startup Checklist

Description

Completed?

Pre-Incorporation Matters

Determine the capital structure desired based upon pre-incorporation activities, as well as desired par value ($0.001 per share), including vesting, and allocate equity to be issued Determine jurisdiction for incorporation Conduct a trademark search on proposed corporate name and file a trademark application if available Obtain domains; register social media profiles Determine terms of employment relationships and offices of founders, including consequences of termination for cause or good reason Discuss terms of Stockholders' Agreement

Prepare and execute Confidentiality and Invention Agreements

Determine initial members of the board of directors

Incorporation and Preliminary Organizational Matters

Prepare formation documents for a C-corp in an appropriate jurisdiction File Formation Documents Obtain EIN Apply for and obtain business licenses, as well as sales tax permits Prepare By-laws Prepare and execute Statement of Organization, appoint directors Prepare and execute initial board minutes and approve By-laws Issue founders' securities electronically Open company bank account Hire an accountant and set up accounting systems Execute Stockholders' Agreement

Operational Preparation and Preliminary Marketing

Select and customize CRM Select marketing consultants/marketing automation platform Obtain business cards and collateral materials

Obtain insurance Obtain office space

Employees

Prepare form of Employee Confidentiality and Invention Agreement

Determine employee budget Classify employees carefully

? Not everyone is a consultant ? Not everyone is exempt from overtime ? Unpaid interns (6 factor test) Define all employees "at-will"

Document employee misbehavior

Prepare form of Employment Agreement

Consult with lawyer on all terminations

Use non-competes as necessary

Identify salespeople/distributors

Incentive Compensation

Adopt Stock Option/Restricted Share Plan upon an equity financing, meaningful revenue, or other increase of valuation Allocate enough shares to the plan for the next 6-12 months Set exercise price on option shares based on FMV Be intentional on whether you issue ISOs vs. NSOs Option shares should vest over time Carefully consider post-termination exercise periods

Intellectual Property

All founders, employees, and contractors sign Confidentiality and Invention Assignment agreements File trademark registrations for brand names

File copyright registrations for works susceptible to copyright information Consult with a patent counsel (provisional patent applications can be a less expensive way to start the patent process) Choose logos, branding, color scheme and photo scheme

Design Website Incorporating logos, branding, color scheme, and photo scheme; incorporate executive biographies

Capital Preparation

Prepare Financial Projections based upon reasonable assumptions

Prepare a two page Executive Summary and Prepare an Investor Presentation

Deck highlighting the following:

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Team, experience

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Market/Industry

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Problem Existing; Your Solution

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Business Model

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Customer/User

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Sales Cycle

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Sales Funnel

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Competition

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Business Metrics

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Funding to date and requested

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Milestones and upcoming inflection points

Prepare valuation analysis

Historical financial statements

Always be prepared to demo your product or service, if available

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