Sometimes there isn’t an easy answer to any question, and as lawyers often like to say, “It depends on the circumstances.” But, here are some short-hand answers to the frequently asked start-up questions, which hopefully will be right 95% of the time.
1. How much should I capitalize my business with at the beginning?
As much as you can reasonably afford, and in an amount to at least carry you for 6-9 months with no income. What you will find is that it always takes you longer to get revenues, and that you will experience more expenses than you anticipated.
2. How can I get a venture capitalist to pay attention to me?
Any of the following:
- Get a ton of traction in the marketplace
- Have meaningful growing revenues
- Have a world-class management team
- Have truly innovative technology with a big market opportunity
- Get a personal introduction to one of the VC firm partners from a respected colleague
3.How can I come up with a great name for my business?
This is difficult. First brainstorm with a bunch of different names. Then do a Google search to see what is already taken, and that will eliminate 95% of your choices. Make it easy to spell. Make it interesting. Don’t pick a nonsensical name where people won’t have a clue as to what you do (with all due consideration to names like “Google,” “Yahoo,” and the like). Do a trademark/tradename search on the name.
4. What are the biggest challenges to starting a business?
- Shortage of capital and cash flow
- Having a good business plan
- Coming up with a great product or service
- Working more than you expected
- Getting through the frustrations of being constantly rejected by customers
- Hiring good employees
- Knowing when to fire bad employees
- Having to wear so many hats
- Managing your time
- Maintaining some kind of work/life balance
5. What kind of business should I start?
A business that:
- You are passionate about
- Doesn’t take a kazillion dollars to fund
- Has the potential to grow into something big in a reasonable time frame
- You have some experience in (avoiding the problem of “you don’t know what you don’t know”)
- You would enjoy doing (don’t build a business that you will dread going to everyday)
- One that can cause meaningful improvement in users’ lives
Legal advertisement, not legal advice.