Startups and Financial Audits

Annual financial audits are a cost of doing business for many tech startups. While they aren’t the most fun, they do provide great third-party validation of the books and oversight for how the business is being managed financially. Most entrepreneurs should not spend the $10k – $30k on an annual audit. Here’s when an annual…

The Learning and Earning Phases of an Entrepreneur

Most entrepreneurs I know that have been successful tell me that their real success came on at least their second venture, and well after their learning phase. Phase one is learning from another successful entrepreneur or business leader and gaining serious domain expertise. This could be in the form of starting a company that doesn’t…

How Would the Ideal Startup Village Building Work?

Recently I’ve been exploring different buildings and areas for an Atlanta Startup Village (see Physical Atlanta Startup Village Idea and Physical Atlanta Startup Village Components). This is a nice-to-have type project that would be great to do but would have to be a no-brainer financially (e.g. a really good deal). So, assuming the area and building…

Getting Started as an Entrepreneur

Recently I was talking to a successful professional who’s looking to make a transition and wants to be an entrepreneur. Of course, as a person thinking about being an entrepreneur, the best thing to do is to just do it (see JFDI). In reality, most people are measured and won’t jump in unless they feel…

Thinking About Startups and Competitors

One area that I don’t spend too much time worrying about is competitors. Most markets are not winner take all or winner take most such that there’s the opportunity for several successful companies to emerge. Email marketing is a great example of a market without winner take all/most (see email marketing companies with 100+ employees).…

Common Questions After a Startup Exit

A little over two weeks ago ExactTarget acquired Pardot (see ExactTarget and Pardot Join Forces) and things have been a blur ever since with congratulatory phone calls, in-person meetings to tell the back story, and kind email notes. Throughout it all there have been a number of common questions that have repeatedly come up. Here…

Operating Agreements and Startups

One of the most common, and tax efficient, entity types for startups is a Limited Liability Corporation (LLC). LLCs don’t have double taxation on profits and have much less paperwork when compared to standard C Corporations. Now, institutional investors will want to invest in a C Corp (or setup a blocker C Corp that then…

Salary and Equity Trade-Off in a Startup

One of the challenges for cash-strapped startups is paying market rate salaries. In lieu of standard salaries, equity is often a strong component for alignment of interests, upside in the event of an exit, and to compensate for lower salaries. Only, in areas outside of Silicon Valley, equity is often not viewed as being worth…