The Startup Checklist: Guru Highlights
Launching a business is complex – and costly if you get off to a bad start. Learn the practical steps that will get your new venture up and running properly.
David Rose, CEO of Gust, hosted our recent Guru broadcast, The Startup Checklist. He presented key lessons from his latest best-selling book 25 Steps to a Scalable, High-Growth Business. He also answered viewer questions during the Q&A session.
Watch the Recording
Below are highlights from his presentation.
What’s the difference between a small business and high-growth statup?
A high-growth startup will have:
- a co-founder
- employees with equity/part ownership in the company
- a big vision – you plan to grow globally
- a site optimized for mobile
- a focus on the company, not just a role (CEO, VP, etc.)
- a smart exit strategy
What are the key steps to starting a high-growth business?
- You have to create some type of corporate entity that separates you from the business.
- That corporate entity will offer shares of stock. They will likely have different types of stock: common and preferred stock.
- You will have a stock option plan for your employees.
- You have detailed employee agreements that often include non-disclosure and non-compete clauses.
- You have a managed cap table.
- You have a robust web presence.
- You accept electronic payments.
- You have an online accounting program.
- You will have a corporate attorney.
- You have equity/employee separation.
- You will perform due diligence at every step during the process.
What makes an ideal entrepreneurial mentor?
A real mentor works with a protégé over a long period of time and serves as their guide throughout a career. That type of mentor is very rare – even in the United States. If you spend too much time seeking out mentors, you'll have less time to develop your startup. Let mentorships form naturally. If the student is ready, the teacher will appear.
What questions should entrepreneurs ask mentors or advisors as they embark on their journey?
It’s best to be aware of what not to ask. Seek out answers to more generic questions on your own. Use the opportunities to engage with experts by asking tougher, personal questions to gain insights you won't find on blogs or in books.
How can entrepreneurs seek out expert advice or pitch investors without having their idea stolen?
There’s always that risk. But the good news is: having a great idea is not enough. How well you execute an idea matters most.
What are angel investors looking for in a presentation?
What advice can you give foreign entrepreneurs seeking U.S. investors?
Cross-border investing is still in its early stages. Your competition is also much greater. You’re going up against U.S. entrepreneurs. Your best bet is to look for venture capital opportunities in your own country. You have a better chance if your company has scale and success in your country and you're looking to expand in the U.S. You might consider moving your office or headquarters to the U.S. to further increase the likelihood of securing a stateside investor.
Which is better for small businesses: bootstrapping or seeking investors?
Bootstrapping! Why? It’s faster. You can start immediately. You also retain control and ownership of your company. Funding your own company forces you to be tighter with your plan, which always makes for a better business in the long run. Also, if you’re at the idea stage, investors don’t just invest in ideas. They invest in a company.
What benchmarks can you hit to know you’re on track for success?
Investors look for traction. Have you found your product-market fit? Are people buying your products? That’s the best benchmark.