Tools for Setting up a Startup
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What are the Best Tools for Startup Formation
Startups are unique types of business. They are often mentioned in the same vein as typical small businesses that provide any number of product or service offerings. In reality, a startup is more akin to project management than starting a small business. The reason is because of the startup’s objectives. Startups are growth-based. That is, the company seeks to use all available resources to grow as quickly as possible. The end objective is to achieve performance metrics (revenue, users, etc.) that result in a high valuation for the company. The company’s value is generally based upon some industry or market multiple for the value metric in focus. As such, startups make use of a wide variety of tools to make the growth management process easier.
In this article, we discuss some of the common startup tools used during the formation stage.
Formation and Governance Tools
The nature of the startup requires extensive legal and accounting assistance during the startup phase. The business needs to track various aspects of the startup process including:
• Organizational Documents (Articles, Bylaws, Shareholder Agreements)
• Director Meetings and Voting
• Shareholder Meetings and Voting
• Initial Capitalization (Cap Tables)
• Equity (or equity equivalent) Issuances and Vesting
• Equity Valuations (IRC 409A and FSC 728)
• Reporting Requirements (Company Changes, Financials, Securities Regulations, etc.)
There are a number of companies in the market that seek to provide holistic platforms where startups can connect with their attorneys and accountants in a virtual project management environment. Both parties log-in to manage all of the governance and reporting matters for the company. All parties receive real-time updates in the platform. The most prominent companies are Clerky, Shoebox, SeedLegals, and Rocket Matter.
Finance and Accounting Tools
With growth comes revenues and costs. An someone has to figure out how to pay for all of these things. Establishing early a system for developing budgets, tracking expenditures, and monitoring revenue, and compiling performance metrics is extremely important. Some of the top competitors in the market are QuickBooks, Sage PeachTree, Freshbooks, and Expensify.
Marketing is the lifeblood of startup ventures. The business must track marketing efforts (such as traditional and social media campaigns, in-bound and out-bound links, search engine optimization, direct mail or email, customer website use, etc.,) and customer relationships and contacts (customer relationship management). There are countless companies that assist with startup marketing. The major player in the field, without question, is SalesForce.com. There are other rapidly growing marketing and CRM companies that now have a substantial presence in the startup space, such as MailChimp.com. Another company worth mentioning is HubSpot.com.
Operations Tools for Startups
Operations management and communication is extremely demanding in the growth-based startup. These companies need tools at their disposal that can streamline the operations process and add efficiency. Some notably companies taking on startup operations management include: BaseCamp, Asana, Trello, and the host of Google Apps available through G-Suite.
Knowledge Tools for Startups
Some of the best knowledge sites for startups are actually private blogs. Here is a list of the best startup information sites that can provide all sorts of information relevant to startup operations: Linda.com, Udacity.com, Youtube.com, TheBusinessProfessor.com, QuickSprout.com, 500 Startups.com.