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Spring Cleaning for Startups: Sprucing up your Corporate House

05/11/2021

Spring cleaning your home is an annual tradition across many cultures. It should not be overlooked for your growing business. With distributed teams on multiple devices, it is all too easy to become disorganized.

Being disorganized is costly. In my First Time Founders Series with Galvanize, I highlighted the pitfalls of disorganization for raising outside capital. Whether a large venture fund or an individual angel, most investors will expect access to an online data room to do their due diligence before investing.. If you are unable to quickly populate that data room or, worse, cannot populate that data room because you cannot find your documents, your deal value may suffer.

Being organized is also critical for running your business. You need to have ready access to your latest development notes, your sales pipeline, and your final agreements. When someone asks, “what did we agree to again?” you should be able to quickly find the final contract and not find yourself reviewing drafts to figure out which is final by comparing comments across chat, text, or email. 

The best way to get organized is to just start organizing. We are inundated with tips on how to start in our personal lives, so here are a few tips on how to begin for your startup:

Tip 1 – Everything in its place and a place for everything
Decide where you and your team will keep your documents. This can be as simple as a shared network folder or as complicated as an enterprise-grade document management system. Once you have identified where you will keep your key information, actually keep it there. Move documents from email. Memorialize key discussions from chat. Settle on a naming convention and stick with it. Make sure final documents are final – one copy signed by all parties, with all dates and final terms filled in. 

Tip 2 – Assign responsibility
Be explicit about who is responsible for maintaining your document repository. Do not just assume that everything will magically appear in the shared drive or that the right documents are saved.

Tip 3 – Have a running checklist
Get your hands on a sample due diligence checklist. These checklists will help you organize your documents for the day-to-day and for your strategic deals.

Here is a simplified checklist:

  • Corporate Documents (your charter, operating agreement, bylaws)
  • Capitalization Records (capitalization table, purchase agreements, investor agreements)
  • Employment Documents (offer letters, contractor agreements, 401(k) plan)
  • Intellectual Property Records (patents, trademarks, copyrights, licensing agreements)
  • Material Agreements (customer contracts, vendor agreements)
  • Regulatory Compliance (filings and correspondence with governmental agencies)
  • Property Documents (lease)
  • Financial Records (financial statements, loan documents)
  • Litigation (any documents related to past or pending lawsuits)

Set aside time to check in with your advisors and ask them to review your list. Ask them to check if you have the right documents and if your documents are correct. Dedicate time for a scheduled spring cleaning to get organized outside the rush of a key sales closing or strategic deal. Just as with spring cleaning your house or other areas of your life, a good spring cleaning for your startup sets you up for a more productive year ahead.

ABOUT THE AUTHOR

Rose Standifer

Co-Chair, Business Section