Covid has caused many to question where they work, and why.
Some of you reading this are thinking of finally launching into that dream you’ve long buried, either as side hustle or full time.
In our experience, many times people don’t get things right at the start. But they could – easily…
Here are the top 5 things you should do before you get too far down the road.
- Check that name – your name will be valuable but often we see people not checking if someone else already is using it. This can be most demoralising if you spend 6 months working on a project only to find that domain name is taken, a trademark exists or a large company is using the same name (and would likely sue you if you try to as well). The roadmap advice?: Spend only 20 minutes and you can accomplish a lot by searching onecheck, a government website that will look through the most important databases – try it here.
- Structure yourself – think early about what structure is going to match the impact you want to have. Is it best to be a sole trader, a company, a partnership, a charity … just like buying a car there are lots of ‘legal vehicles’ to choose – upskill yourself on whether you need a 4×4 or a 7 seater so that you can best accomplish your mission. The roadmap advice: Read through guides on options for start-ups like this one.
- Co-founder blues: Everything will be fine with your co-founder at the start. Pop that champagne! But how about 6 months in? How about 2 years in? How well do you really know these people … and what if you are working 80 hour weeks on your dream and they have a full time job and are clearly only putting in 4 hours a week – what then? The roadmap advice: Document how you will relate to each other, this is most often done in a Founder Agreement / Shareholders’ Agreement. Incentivising each other can be done via share vesting agreements that require contribution.
- Protect your IP: Intellectual Property is going to be key to your venture – so how will you protect it? It is pretty cheap to trademark your name but what about that innovation sitting in your head? Sometimes it is worth trying to patent – often it is not. Some of the most successful companies just keep things as a trade secret. If you do that then how will you ensure when you talk to future customers or suppliers that they don’t take your brilliant idea? The roadmap advice: Keep things secret, keep them safe – develop a non-disclosure agreement to use when you do go out (a free one is here).
- Raise that cash: Money is like the oil in the machine of a new start-up. You’re gonna need it! So where will you source it from? There are rules about raising money from others and so you need to make sure that you comply with the Financial Markets Authority. The key is to come within exemptions wherever possible that mean you will not need to disclose as much information to investors as you will otherwise. The roadmap advice: Understand the ins and outs of raising funds, to start with have a read of this guidance.
We hope this list of key things to consider will help lay the foundation for you to build a successful new start-up on. We have seen too many times where entrepreneurs do NOT do some of these things and a few months or years in they have quite a few regrets as a lot of this is fairly simple to just get right from the start.
For more information, please feel free to contact Steven Moe stevenmoe@parryfield.com or 021 761 292 or Aislinn Molloy aislinnmolloy@parryfield.com . We also have free resources for start-ups, boards and companies including a “Start-ups Legal Toolkit” which covers the key issues we see people face when starting out.
