The first hundred days in the life of a startup come with a range of important decisions. You need to get the idea and the team right first but then there are some very important financial and legal jobs to get done if you are to set yourself on the fast track to long-term success.
Here is some advice from legal and financial experts, as well as founders, investors and mentors that have seen it and done it before.
How to start a startup: The idea
Alice Bentinck is the cofounder of Entrepreneur First - a pre-seed investment programme focused on building startups from the ground up. She has helped hundreds of founders start companies before they even have a fixed idea of what they want to build.
That core idea is undoubtedly important, but it's not the be-all and end-all. Just ask Slack cofounder Stewart Butterfield, who pivoted Slack away from a multiplayer game twice before he turned it into one of the best enterprise apps in the market.
Writing for Techworld, Bentinck says: "Input from your customers and increased understanding of the problem and market will force you to iterate and change your idea. Ideas are just the starting point, so don’t sweat it too hard. The most important thing is to get started."
Martin Alderson - cofounder of mobile cybersecurity startup Codified Security - says finding the cost of customer acquisition early on is also important.
"Get a grip on SEO, paid search, content marketing and PR - testing the most effective ways of driving customers to you," Alderson said. "We didn't test enough price points or collect enough data, a significant oversight. We needed to ask how much people would pay, not just if they would pay."
How to start a startup: Founding team
Bentinck wants to debunk the myth that finding a cofounder is like dating, outlining mutual respect as the best foundation to build a startup on: "Team building is not painting by numbers, but by working seriously on something you care about, with someone you respect, is a pretty good start."
Matt Robinson cofounded the fintech startup GoCardless alongside Tom Blomfield and current CEO Hiroki Takeuchi, and he says agreeing who is the boss is an important early step. "This will only get harder with time," he says. "Until we decided who was CEO the underlying uncertainty over who was really in charge affected everything the company did to some extent."
You don't want a Social Network-style breakup on your hands, so it is important to be up-front with your cofounder(s) to avoid issues further down the line. Get a solid founders agreement down on paper so that everyone knows where they stand.
How to start a startup: Registering a name and domain
Before you get attached to a name make sure it is available. Tom Blomfield, CEO at Monzo Bank will be able to vouch for this piece of advice after he had to change the name of his digital challenger bank from Mondo following a legal challenge. He even decided to crowdsource new name ideas in a bid to make a positive from a negative situation.
Andrew Griffin, CEO of consultancy Oakhall Advisors, has some handy advice for securing your name for the future: "Check that your preferred domain and company name, and trademark name are available using a domain name registrar, Companies House, and the UK’s Intellectual Property Office trademark register respectively."
Registering a domain will cost around £30 and setting up the company with Companies House another £15. Next "you will need to give a registered office," Griffin says. "If you don’t have one, use your home address, or you can spend £40-50 with an agency to give you a virtual registered office. You can be a sole director, and to start with give yourself a single share. You can change the share capital later."
It's important to note that neither registering the domain or company name gives you rights to the brand, "so spend money with a trademark lawyer to get your name registered for specific business activities. It can avoid huge problems later," Griffin warns. This will set you back around £600-1200 and gives you a six month window to also register overseas.
How to start a startup: Legal
As a startup your intellectual property is your most important asset. Andy Moseby, corporate partner at the technology and digital media law firm Kemp Little advises: “Before discussing opportunities with suppliers/customers, consider a confidentiality agreement.
"It obliges parties to keep discussions confidential. When you’ve lined up some prospects, use terms and conditions to govern the sale of your product/service. It sets clear rights and obligations, allocates liability and covers for when things go wrong."
Digital startups will always want to have control of the data they generate, and will need to stay on the right side of the law when it comes to holding proprietary data. Luckily this is a quick and cheap job: "By law you have to register your business with the Information Commissioners Office (ICO). This costs £35 a year and again takes just 10 minutes or so," says Griffin.
How to start a startup: Financials
Griffin's first piece of financial advice is a simple one, and will make your life a lot easier: Get an accountant. "They will perhaps save you money but certainly save you from making mistakes with your corporation tax or VAT. You should be able to get one for around £1000 a year as a startup," he says.
Even with a good accountant you will have to do a few things to stay on the right side of the government.
"If you are making money from the start, you will want to register for fixed rate VAT, which means you pay a lower VAT rate on your sales, but cannot claim VAT back on input costs," Griffin explains. "If you are losing money to start with, and especially if you are outsourcing, say, website development, then register for full VAT, and monthly VAT returns, and then you can claim back VAT paid to suppliers each month."
You will also need to register for corporation tax and, if you employ anyone, PAYE. You can pay your accountant to do this but if you are only a small team the HMRC offers free payroll software that should make things more manageable.
Lastly make sure you have some form of liability and employee insurance, and be sure to shop around for a good rate.
How to start a startup: Funding
Most startups will bootstrap their first hundred days. You could get approached with some outside funding options though, so it is good to be prepared.
Taking venture capital money can be hugely tempting early on as you look to grow rapidly. David Hickson, head of corporate development at startup accelerator Founders Factory, says if you want to be taken seriously by investors, a well put together slide deck remains the most important piece of kit in your locker.
"Tell the story as a narrative arc through problem, solution, product, size of opportunity, go-to-market and demographic, how it differentiates from the competition, how it create a sustainable competitive advantage against the competition and new entrants, and which informs (and is informed by) the financial plan, the use of raise funds and the unit economics," Hickson says.
Of course accepting venture capital this early in the process is risky. It brings new pressures and investor intentions might be quite different to your own. Venture capitalist at Partech Ventures Boris Golden told Techworld: "Only a very small percentage of companies are suitable [for VC funding]. They need to match two main things: they need to have huge potential – say, to become a unicorn [a company worth over a billion dollars]. The second is they need to have the ambition to do that."
How to start a startup: The next 100 days
Matt Robinson is working on his second venture with proptech startup Nested, and he says 100 days isn't enough time to truly get started. "You need at least one year full-time to get anywhere," he says, "particularly if you're working on something new or groundbreaking. Commit the time to reach an inflection point or don't bother."