The Stages of a Startup
Ideation is the first step in any startup journey. You cannot start without an idea and whilst many entrepreneurs start with many ideas, not all ideas can get off the ground.
Setting up your business right from the start can save you both time and money as you go along your startup journey. Whilst there are a number of options for business structures in Australia, incorporating a company is the most common structure.
A company needs to be incorporated through the Australian Securities and Investments Commission (ASIC) along with registration of an Australian Business Number (ABN) and Tax File Number (TFN). Running your business through a company structure will help protect your assets, allow you to grow and obtain future investment in the business.
Minimum Viable Product
How do you know if your product or service is what people want? Going to market with a Minimum Viable Product is an effective and sometimes brutally honest way of finding out if your current product offering provides sufficient value.
When you bring a product or service to market, even if it’s not complete, you are guaranteed instant feedback. This is rarely all roses, but you're bound to get something to work with. Your goal here is to create value for a small number of loyal followers and then leverage this new knowledge to refine your product or service.
Finally, after months (sometimes years), you are now ready to launch your business! Opening your business to general consumers is both a scary and exhilarating exercise and milestone which you should celebrate!
Launching your business also comes with risks and as consumers or customers begin to utilise your service and/or products, protecting your business is critical. This is the most critical and important stage of your startup journey and getting the legal essentials in place.
Family, Friends & 'Fools'
So you've got a product, you've launched to the market and now you want to take it to the next level. Some money might help, right? Friends and family (and some may say 'fools') could be a valuable source of capital early on in your businesses life cycle. Down the track, sophisticated investors may look to see if your friends and family have taken a chance on you.
There is a risk in any investment and understanding your options on seeking investment from friends and family is important along with having an honest discussion as to any risks associated. There are a number of ways in which funds can be raised from your friends and family, and we are happy to help guide you through the options.
Seed to Series A
Congratulations! Your startup has made it through the early stages of the startup life cycle. Now there's only one thing left to do: grow. For most startups, this means generating additional cash for product development and increased overheads such as wages and office space.
Investment is often broken down into rounds, in which investors contribute capital for the business usually in exchange for equity. A Seed round is often a series of related investments in which a handful of investors invest anywhere from $50,000 to $2 million. A Series A round often involves a smaller number of investors contributing anywhere from $2 million to $10 million.
Expansion and Beyond
At this point, your business should be looking for comprehensive legal support.
We recommend that you get in touch with our lawyers directly through the Law Squared website to discuss how we can best assist you.