Start Up 101!
Start up 101 : from incorporation to IPO By Pankaj Jain and Sophia – I knew this would be nothing short of awesome as I heard Pankaj talk on the Pecha Kucha night the day before.
And well I was right. It started off with the disclaimer: You are not going to be a lawyer after the session!
But definitely will know the legal liabilities and nuances to be aware of on the legal platform when venturing into start up set up. (Fair enough)
So if you have an idea; the key considerations:
- Go for a 10 day Vipassana.
2. It gives you the capability to pivot.
3. After that you realize, well only 30% of your entire idea comes true!
(Disclaimer: worked for Pankaj; no promises made to other folks! )
Well here are 3 pointers that would work for all entrepreneurs:
1. Don’t RUN out of cash
2. Don’t run OUT of cash
3. Don’t run out of CASH!
Have thorough idea of what you are getting into .Have enough conversations to be able to tell a vulture capitalist from a venture capitalist and similarly an angel from a devil.
We skimmed through the crux of a start up:
1. An idea- A must have !
2. MVP (minimum viable product)- A minimum viable product (MVP) is a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users.
3. Business plan/model-The skeletal structure with which to work with.
4. Co-founders- The bro’s who need to stick through it all.
5. Informal advisors- The ones who have been there done that or atleast seen enough to be giving you gyan.
6. NDA- Non disclosure agreement – A seal to keep idea within the four walls of the discussion room.
Well apparently when talking about your start up its always safe to sign an NDA just to ensure that the listener does not run away with your idea and you are left stranded, thinking where did I go wrong. *psst* But few rules don’t really apply in India! So moving on, an entrepreneurial idea is 1%inspiration and 99% perspiration. And when starting, it is always better to take the road less travelled by.
Then we had a brush with few terms like “reps and warranties” and “due diligence” (which is sort of like a blind date but someone you can Google up );)
We had run through through:
- Legal entity- An individual or organization which is legally permitted to enter into a contract, and be sued if it fails to meet its contractual obligations.
And also peeked into:
3. Tax and accounting
4. For profit
5. Non profit
6. Government fillings
7. Initial board
8. Books and record
9. Bank accounts
Now why do you become a VC (on a lighter tone): If you can- you do, if you can’t- you invest!
A new term added to my vocabulary was “fiduciary” –which translates to be driven by trust and run by care. Speaking loud that ethics do intertwine and stretch its tentacles into business practises.
They also introduced us to concept of ESOP, sweat equity etc .
We were then escorted to an array of pillars that hold the start up-“up”.
Ending with the different ways one could shield their idea from being embezzled.
1. Copy rights
In the afternoon we explored the different legal entities, section 80-G, section 12A exemption, TDS returns; literally swimming in a pool of the nitty gritty of law and taxation.
It was well seasoned with the occasional sprinkling of sarcasm and witty quotes.
Our session ended with us exchanging our start up ideas and moulding a pitch. A powerful insight to the Do’s and Don’ts.
A start up is a serious challenge , but with enough passion , drive and dexterity there is no turning back .
Concluding with a closing quote “the more you sweat in peace, the less you bleed in war”!!