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Startup Due Diligence Checklist
The document is a comprehensive startup due diligence checklist designed for entrepreneurs in the pre-money phase of building a venture capital-backed startup. It outlines necessary administrative and operational measures, including organizational documentation, intellectual property registration, and tools for financial management. The checklist is supplemented with hyperlinks to additional resources and guides to assist in the startup formation process.
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Startup Due Diligence Checklist
- 1. Incorporated Protections PI Startup dueDiligence Checklist
- 2. Incorporated Protections, professionalservices for individuals & teams looking to turn side projects into formal entities Enterprise Establishment, the organization and structure necessary to grow budding ideas into seed investments
- 3. Idea Validation Lean BusinessModels Trade Agreements Custom Letters, Contracts, Agreements Book & Record Keeping Cloud Based Back-Office Business Formation C-Corp (Del., Nev., Home State) Compliance & Minutes Compliance Calendar & Minute Book IP Registration Trademarks, Copyrights, Patents +Administrative Operational Startup due Diligence Checklist for pre-money High Growth Technology Companies
- 4. Advocate-for-hire Allow me tointroduce myself: In "real life" and LinkedIn I'm Benny L. Walk, II. On Twitter and Instagram I'm @lavvocato. I run The Campaign on Tumblr and I'm a co-founder @ VeerGordon. I'm also a graduate of Morehouse College, the London School of Economics and NYU Law. Startup Due Diligence Checklist is a guide for entrepreneurs looking to help themselves during the pre-money phase of building a VC backed startup. The Checklist provides an outline of administrative and operational measures meant to satisfy seed round due diligence. Throughout, hyperlinks to tools, articles and thought leaders are included for reference and further instruction. IP hyperlinks
- 5. Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Customer Segment Channels RevenueStreamsCost Structure Lean Canvas: “1-page business model that takes under 20 minutes to create” Top 3 problems Top 3 features Single, clear, c o m p e l l i n g message that states why you are different & worth buying Can’t be easily copied or bought Target Customers Path to customersActivity that drives retention/revenue Customer Acquisition Costs Distribution Costs Hosting People, ect Revenue Model Lifetime Value Revenue Gross Margin Idea Validation hyperlinks
- 6. •File Certificate ofIncorporation •Secure Registered Agent •Register as Foreign Entity in Home State •Draft Bylaws •Obtain Tax ID Number (EIN) •Draft Resolution to Open Bank Account •Obtain State and Local Licenses + Formation & Compliance DocumentationApplication •Certificate of Incorporation •Bylaws •Action By Incorporator •Founder IP Assignment Agreement **critical** •Initial Organizational Resolutions of the Board of Directors •Organizational Board Consents •Minute Book •Annual Reports/Franchise Tax •Qualification to Do Business in Home State •Certificate of Adoption of Bylaws hyperlinks
- 7. •(Restricted) Common StockPurchase Agreement (with Vesting) •Employee Offer Letter •Employee Agreement •Consulting Agreement •Nondisclosure Agreement (One Way- Disclosing, One Way-Receiving, Mutual) •Indemnification Agreement •Terms of Service & Privacy Policy •Regulatory Certifications (Industry Specific) + Shareholder DocumentsFounding Documents •Subscription Letter •Common Stock Certificate •Notice of Issuance of Uncertified Stock •Stock Ledger/Capitalization Table •Equity Incentive Plan •Stock Option Agreement •State Securities Law filings •83(b) Election Form (within 30 days of purchase of unvested stock) •409A Valuation (before issuance of any options) Trade Agreements
- 8. •Trademarks, brand andproduct names, graphic logos, slogans, taglines, •Company name (“Twitter”), company logo (The Blue Bird) and company name written in specific script (“Twitter” in bubble type) •Copyright, original works of authorship fixed in tangible forms of expression. •Software, songs, movies, photos, graphics and any writings you post on your website •Patents, new, useful and non-obvious inventions of method or process, described in enough detail that it can be "reduced to practice" by a person with the relevant technical expertise. •Electrical and mechanical innovations, nonfunctional designs, software, hardware, e-commerce processes, accessories and devices Intellectual Property + RegistrationComprehensive Search hyperlinks
- 9. •Import bank account,credit card, PayPal and Square transactions •Create customized recurring invoices, schedule bill payments and process payments online •View bank balances, recent sales, upcoming bills and expense claims •Calculate payroll, pay staff and file tax returns •Upload receipts by forwarding emails, trip itineraries and attachments •Enroll, renew and onboard employee benefit programs •Employ tools to start and manage jobs + ToolsTasks •Xero for bookkeeping •Bill.Com for receivables/payables •Expensify for expense reporting •ZenPayroll for payroll •Zenefits for HR and benefits •WorkflowMax for job management •Handshake for order management •Google apps for work •PayPal, Square, Stripe for payments •Dropbox, Box for data storage Back Office In The Cloud hyperlinks
- 10. •Why Lean Canvasvs Business Model Canvas?, Ash Maurya •Questions you and your co-founder need to have answered before you start (or ASAP), Charlie O’Donnell •If I Launched a Startup in 2014, Ryan Roberts •8 Legal To-Dos Before Your First Investment, Craig Jacoby •Why So Many Companies Incorporate in Delaware, Alex Lipton •Most Common Early Start-up Mistakes, Mark Suster •...Avoid the Most Common IP Mistakes, Steve Charkoudian •MBA Mondays: Accounting From The Archives, Fred Wilson •Startup Tax Filings: Get Them Done Efficienctly, José Ancer Lean, Business Model, Value Proposition •Experiments & Validation Legal Zoom, Clerky, CT Corporation •Business Formation WSGR, Orrick, Cooley, Goodwin Procter •Formation/Agreements U.S. Patent & Trademark Office, U.S. Copyright Office •Intellectual Property Shake, Docracy, RocketLawyer •Trade Agreements TechStars, 500 Startups, Y Combinator •Finance Agreements Xero, Quickbooks, Bench •Bookkeeping Incorporated Protections •Validation, Formation, Compliance, IP, Agreements, Back Office +Help Yourself Thought Leadership Resources & References hyperlinkshyperlinks
- 11. bwalk@incorporatedprotections.com Builders Build. CreatorsCreate. We Protect. Est. Ent.