When you first start working on your startup there will be 1001 things you need to focus on -building a product, getting users to use the product or your first sales, hiring the first employees, etc.
In this mad rush to build a company, there are certain foundational things that people often don't learn about until it is too late. Here is a list of some things I see entrepreneurs often miss:
- Get a *great* lawyer. Just as not all engineers are created equal, not all lawyers are created equal. Even within a great law firm, the individual partners vary in quality. Having a good lawyer impacts many things you do in the future e.g.:
- Fundraising. A great lawyer will know on a per partner basis what each venture capitalist has/does not have in term sheets or legal docs. This increases your negotiating leverage significantly, since you know what really is "standard" for the firm (biggest argument people make is "oh, that is not standard - we do not do that here".)
- Deals & other stuff. Deal hacks are the specialty of a great deal lawyer. What terms can screw you down the line in non-obvious ways? Lots of other key stuff will be driven by your lawyers - financings, acquisitions, etc.
- Most lawyers will defer enough legal fees to cover incorporation and first financing event. Some lawyers will ask for a small amount of equity for this deferral. Do not give this to them, as this is currently non-standard.
- Our lawyers from Mixer Labs were Daniel Friedland and Mitch Zucklie - I could not recommend them more highly.
Any other things one should do when setting up a startup? Let me know what I missed!