Before You Pitch, Successful Start-Ups Do This

Before You Pitch, Successful Start-Ups Do This

For every Facebook or Uber, there are hundreds of start-ups that never take off. The successes might appear to be the beneficiaries of a confluence of perfectly-timed factors—the right answer to a market need, the right personalities, the right time and place, and unquantifiable luck. If you’re creating your business, you can find yourself thinking that those start-ups were flukes, the long-sought and rarely achieved unicorns of tech lore.

But the success of these “unicorn” start-ups is due less to the alignment of the stars and more to careful preparation. They worked hard to test new ideas, but they also sought legal advice for a variety of issues. By retaining professional counsel early, before they ever made their first investor pitch, these start-ups gained a firm foundation that carried them from development to expansion.

You can replicate the same success for your start-up.

Legal counsel will steer you away from problems, thereby helping implement your overall strategy as smoothly and efficiently as possible. Specifically, legal counsel will advise you on:

1. Selecting Entity Legal Structure

2. Preparing Investor Recruitment Strategy

3. Long-Term Strategy Planning

Selecting Entity Legal Structure

A tight corporate structure will make your start-up marketable to highly selective investors, all of who want to invest in a business with an optimized legal structure. Investors, ever vigilant for stable investments and wary of sloppiness, will be impressed by the state of your corporate books. Retaining legal counsel ahead of pitch sessions sends a clear message that you care enough about your business to invest time and money yourself.

You will also avoid complications caused by the improper legal entity before they arise. Businesses who are cheap and try to DIY their structure end up spending thousands restructuring, which can kill momentum and endanger funding.

Preparing Investor Recruitment Strategy

Seeking investors requires sensitivity to both the needs of your business and the type of investors you hope to engage. Specific legal structures support smaller infusions of cash. Others are more suitable for sophisticated investors with deep pockets and high expectations. A knowledgeable lawyer will show you how to navigate investors.

Legal counsel retained in advance of investor rounds can help start-ups secure funding once investors are interested. At that point, things move very quickly. The start-up must decide the structure of financing, negotiate terms, and draft agreements. With a team of professionals already working behind the scenes, a start-up can focus on the deal instead of scrambling to find representation.

Planning for Long-Term Strategy

In addition to helping "unicorn" start-ups set up business entities and entice investors, legal counsel also empowers start-ups to plan, develop, and execute a long-term strategy. And they can accomplish that before they ever face the pressures of getting a start-up off the ground.

Every business is different, and you probably have a certain endgame in mind for your business. Maybe you plan to sell it off, take a more passive role, or become the face of the company. Do you want to scale your business as soon as possible? Do you want to pass it down to your children? Is this a side hustle or your life’s dream? Do you know how to plan for each of those scenarios?

Whatever your goal, legal counsel can tell you exactly what to consider, what opportunities to take advantage of, what pitfalls to avoid, and how to ensure that you secure the results you want. 

Don’t undermine your start-up’s success by winging the legal stuff. Find out how legal counsel can build your start-up’s foundation today. Why not be ready for the next steps before you pitch? What other legal tools are you using to build your corporate structure?

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