Tuesday May 16, 2017 0 comments
BOULDER -- The first day of Boulder Startup Week 2017 on Monday paid homage to the things that startups must do first to have a shot at success.
That included a panel discussion on “Where Do I Start--Turning Your Idea Into a Business” featuring two attorneys who specialize in helping startups and a startup founder who emphasized seeking out expert legal help as one of the first steps to take when creating a business.
“It’s really a good idea to consider an attorney with startup experience,” said Neil Smith, Symbia Allergy Solutions founder and CEO. “It’s very important to get some good legal advice.”
David Kerr and Shannon Meyer, both attorneys, echoed Smith’s sentiments and offered some specific tips on a variety of legal-related issues.
Kerr, a partner with Berg Hill Greenleaf Ruscitti, said startup founders must be diligent in keeping their intellectual property (IP) guarded while working at their day job.
“You have to be careful because it may be in violation of your (company’s) moonlighting agreement,” Kerr said. “If you are creating something, and if you do that on company time, in company space and with company equipment, there’s a very good argument that the company either owns it or can use it.”
Kerr said anyone considering doing some moonlighting on company time should first become fully aware of how the company views such conduct.
“Gather all your employee documents, non-disclosure agreements, employee handbooks and get all your paper in order,” he said.
“Always create a layer of separation.”
Meyer, an attorney with Sage Law Group, said forming an LLC (limited liability corporation) or a business corporation are the two most common ways to found a startup.
“A lot of people start as an LLC and you can always convert to a corporation later,” she said. “Investors like corporations because investors like certainty.”
Kerr said investors want the assurance that the startup has a strong foundation.
“If you want to take on any significant investment, you have to be a Delaware corporation,” he said.
"(Investors) want real financials that are grounded in the real world as much as possible. They want to see a real financial model.”
Smith, who said he bootstrapped his company with his own money rather than seeking investors, cautioned anyone thinking about doing the same should be ready to live without an income for awhile.
Smith said he gave up a full-time job to focus on starting his business, but was able to survive until it became profitable by having some money saved and -- in his case -- a working spouse.
“You need to figure out how you’re going to pay the rent because it can be pretty lean,” he said.
Kerr said one thing startup founders should remember is that – at some point – they might not be the best CEO for their own company.
“There are people who are brilliant scientists and inventors but they’re terrible CEOs,” he said. “Find someone who has the skill set to be CEO.”
Smith echoed that view: “As a company changes and grows, the management changes. A founder is great starting out,” he said.
“But when the company moves from being driven by tech knowledge to business knowledge is when it makes sense to switch the CEO.”
Meyer emphasized the need to get everything regarding how the company is managed down in writing.
“There’s change, things happen, especially if (the startup) is really successful,” she said.
“I don’t care if it’s your best friend, your brother or your mother – write it down.”
Kerr said startup founders should always remember there are many resources in their community -- banks, investors, established companies, government and others -- who want to help them.
“Understand the power of startups,” he said. “You are the economic engines of your community and people want to help you.
“You just have to ask, but sometimes people are afraid to ask.”
Monday’s sessions also included a panel Q&A on the advisability of first getting a patent on a startup’s IP or focusing first on the business creation.
Panel members Russ Krajec, Seth Miller and Yoriko Morita said startup founders should remember that “everything is patentable” but added that patents should only be sought if the IP can be protected while the patent is being reviewed.
“Everything is patentable, but the question is: Is it worth getting patented,” said Krajec, a patent attorney. “Must I tell the public everything I know and in return I get this little bit of exclusivity?”
Miller said it’s important to remember that “patents are just one of the tools to protect against market entry” by a competitor.
Krajec said he hoped Boulder Startup Week attendees engage with each other as the week unfolds to gain insight beyond the formal presentations.
“The magic at Boulder Startup Week is the 15 minutes before the talk starts and the 15 minutes after when you network with each other," he said.
“We’re just kind of the filler.”
Boulder’s Startup Week is the state’s original Startup Week, founded in 2010. More than 200 free panels, workshops, presentations and networking opportunities are set for the week, which concludes Friday.
To view a full schedule, click here.
This year’s Startup Week sponsors include Zayo, 10/4, 11 Dollar Bill, Applied Trust, BHGR, Boomtown, Boulder Engineering Studio, Brandzooka, BSW Wealth Partners, City of Boulder, CodeCraft, eGauge, gloo, Google, Matter Communications, name.com, Occipital, Pivotal, Sage Law Group, Sphero, CU-Boulder, theTradeDesk and Up Ramp.