25 Steps to Found and Scale a High-Growth Business The Startup Checklist is the entrepreneur's essential companion. While most entrepreneurship books focus on strategy, this invaluable guide provides the concrete steps that will get your new business off to a strong start.

Foreword Bill Gross xi Preface Why Every Entrepreneur Needs This Book Instead of the other 93,210 Books on Entrepreneurship xiii Introduction 25 Key Action Steps (Plus One) for Every Entrepreneur 1 Part I Prepare to Launch 15 1. Translate Your Idea into a Compelling Business Model 17 2. Craft a Lean Business Plan to Serve as Your Venture’s Road Map 25 3. Find and Know Your Competitors 35 4. Build Your Dream Team 45 5. Allocate the Equity in Your Startup 55 6. Build a Minimum Viable Product and Validate Your Plan with Customers 63 7. Establish Your Brand with Online Public Profiles 69 8. Network Effectively within the Entrepreneurial Ecosystem 77 Part II Launch and Build Your Company 85 9. Incorporate Your Company for Protection and Investment 87 10. “Lawyer Up” the Right Way 95 11. Recruit Your Boards of Directors and Advisors 105 12. Select an Accountant and an Accounting System 113 13. Establish and Manage Your Credit Profile 123 14. Open Bank, Credit Card, and Merchant Accounts 131 15. Choosing Your Key Technologies, Platforms, and Vendors 139 16. Measure Your Business with Data Analytics 149 17. Round out Your Team with Employees and Freelancers 163 18. Establish a Stock Option Plan to Incentivize Your Team 175 Part III Raise Funds; Collaborate with Investors; Plan for Your Exit 183 19. Understand The Funding Process and What Investors Want to See 185 20. Nurture Your Investor Pipeline 197 21. Crowdfunding and Online Platforms 207 22. Survive the Term Sheet Negotiation and Investor Due Diligence 215 23. Get the Most from Your Investors, Now and in the Future 225 24. Understand Your Company’s Valuation 233 25. Keep Your Eye on the Exit and Reap the Benefits of Success 243 The Startup Checklist Online: Gust.com/Checklist 251 Appendices Appendix A The Startup Reading List 253 Appendix B Sample Due Diligence Request 257 Appendix C Starting a U.S. Corporation from a Foreign Country 265 Appendix D Sample Convertible Preferred Stock Term Sheet 269 Appendix E Sample Convertible Note Term Sheet 285 Appendix F Sample Founder Accord 291 Acknowledgments 295 Index 299

This book is designed for a very specific type of business starter: the entrepreneur who is deliberately setting out to create a scalable, high-growth business designed for the twenty- first century; a business that will hire employees, issue stock options, raise money from outside investors, grow rapidly, and eventually either be acquired by a larger company or “go public” through an initial public offering. Starting that kind of business gets very complicated, very quickly, and making even small mistakes at the beginning can cause problems at every later step along the way. These mistakes include the fundamental (starting a business that just doesn’t make sense) to the painful (hooking up with people whose interests are divergent from yours) to the tragic (getting equity allocations wrong at the beginning and never being able to recover), all the way to the really, really expensive (making simple mistakes at the incorporation level that result in five- and six-figure clean-up costs the first time a serious investor is thinking of supporting you). This book is your one-stop checklist to starting off right. It assumes no prior knowledge about business—just a strong desire to create something seriously big, and to do so in the most effective, most efficient, and least expensive way possible. David S. Rose, a serial entrepreneur who is one of the world’s leading startup investors, walks beside you throughout the process, providing the background you need to understand the whys in addition to the whats and the hows. He takes you step-by-step through the nitty gritty practical tasks of starting up a high-growth venture, introduces you to the latest online tools that will save you time and money, points you to the standard books that should be in every entrepreneur’s library, and gives you a peek behind the curtains of the angel investor and venture worlds. Among the concrete steps covered are: Translating your idea into a compelling business modelAllocating equity among your startup teamIncorporating as a Delaware “C” corporationRecruiting your boards of Directors and AdvisorsMeasuring your business with data analyticsEstablishing a stock option planUnderstanding the funding processCrowdfunding with online platformsNegotiating investment term sheetsReaping the benefits of success through acquisition