What lawyer do you use? Who’s your accountant?
I’ve been getting these questions a lot lately. Enough that I thought I should write this post. And the reason is, is that most of the people asking me don’t need these services. Yet.
When I started my last company, I couldn’t wait to start having conversations with lawyers and accountants. It made me feel important. Like I had something real. Like I was a real CEO. And they loved me too. They always answered my calls, they even took me out to lunch. And then I got the bill.
Most new entrepreneurs I’ve spoken to lately, are doing the same thing. Rushing to set up complex legal structures and financial models before they have any idea whether their idea is going to sink or swim.
Businesses need lawyers and accountants, but unless you have money flowing through the company (either in the form of paying customers or investment)…..you don’t really have a business. You have a theory.
A much better use of your time would be to go out and prove your theory to be correct, rather than lunching with your lawyers. If you’re right, and cash is coming at you faster than you know what to do with it, that’s when you bring in the suits. Champagne problems.
Execute like a monkey humping a coconut, on your product and getting customers, and the rest will fall into place when it needs to. Howard Lindzon put’s it nicely.
Having setup companies in a couple places now, I will say that Silicon Valley has this nailed. More so than most places, the firms that operate here understand volatility of the startup ecosystem and have morphed to fit the environment. Many firms will defer payments, or take small equity stakes to cover their initial fees. Ping me (paul [at] skyscrpr [dot] com) if you’d like to chat about this a little more. I have a killer team with me on Skyscrpr that have already been worth their weight in gold. But we only brought them on when we really needed them.
As always, the phone lines are open, so hit us up if you want to chat.
Also, this is an awesome article on how to check the boxes when the time comes to officially start your company.