Recipe For a Successful Startup

2. PRESENTS
RECIPE FOR A SUCCESSFUL
STARTUP
Anil Advani
Managing Partner
anil@inventuslaw.com

3. FIND YOUR NORTH STAR

4. Lifecycle of a Startup
Team; IP Protection
EXIT:
ACQUISITION
Incorporation Debt vs. Equity Strategic Partnerships
ANGEL ROUND
SERIESA
SMALL
CUSTOMER
SERIESB
BIG
CUSTOMER
SERIESC
BRIDGE
ROUND
SERIESD
OFFERING
INITIAL
PUBLIC
Stock Incentive Plan Selecting and Negotiating with VCs
Founders Stock; IP Protection
The big
question: when
and how to
exit????

5. GETTING STARTED
Step 1 : Validate the Idea
• Research, Research, Research!
• Identify the problem you are looking to solve
• Is the problem worth solving?
• Is the technology feasible?
• Create a Minimum Viable Product [MVP]
• Sign up Beta Customers: Friends & Family
Step 2: Build the Team
• Identify Founders
• Identify Key Initial Employees
• Titles are Important! Who will be the CEO?
There can only be 1 Leader. Are you the
one?
• Don’t forget Sales team!
• IP ownership issues
• Watch out for fake mentors!

6. LEGAL ISSUES
When to Incorporate
· Not too early, and certainly not too late!
Where to Incorporate
· Local Jurisdiction or U.S.
· Where are the: (a) customers, (b) investors; and/or (c) Exit options.
Dividing up Initial Equity; IP Ownership
· Founders: Identify who the founders are. Difference from the “founding team”!
· Key Employees: Structure the arrangements carefully, in writing, and early on.
· Investors: They are experienced professionals; Learn how to negotiate.
Protecting Intellectual Property
· Patents, Trademarks, Copyrights
· Third Party Claims

7. RAISING MONEY
Whether to Raise
· Do you NEED the money?
· What’s the plan to spend the money?
How Much to Raise?
· How much do you need to get to the next stage?
· Raise 25% more, but not too much more. Understand how dilution works.
Where to Raise from?
· Angel Investors – there are “Good” angels and there are “Bad” Angels
· Venture Capital Investors – Make them your friends and you will win!
· Understand how the Cap table works; how to keep control of the company!
· Strategic Investors – Best kind of investors, but watch out for key terms.

8. CREATING A BUSINESS
YOU NEED TO BE SELLING ALL THE TIME!
• Build a “Solid” Sales Team
• Know your customer; Know your product
• Build Metrics to measure success
BUSINESS NEEDS TO MAKE MONEY!
• Need to price the Product appropriately
• Need to Invoice on time
• Need to collect on time
• If revenues are not increasing with sales, then re-evaluate the process

9. EXITING THE BUSINESS
When to Exit
• Plan to Exit should be built into the business plan from Day 1
• Main FINANCIAL goal of a founder should be to exit at the highest valuation
• All efforts on fund raising, team building, sales, and growth should focus on
achieving the end goal of EXIT
• The trap of a “lifestyle” business
How to Exit?
• Sale to a Larger Strategic Company
• Sale to a Private Equity Player
• Going Public!
How much to sell for?
• Sell for the Best offer at the Best Time
• Not too early, not too late!

10. THE END
NOW THAT YOU HAVE EXITED, TAKE A
BREAK, GET BACK AND START AGAIN
GO TO SLIDE 1