So once you are over the 'I've-finally-closed-my-round' hangover, and sufficiently rehydrated, you will be pleased to know there is yet more admin coming up. Lucky you, right?
Being a founder means being scrappy and getting help when needed - we'll help signpost you with things to do (and the MVP of each of course) and things you should outsource.
Having been there and done that, we know all too well that putting a little effort into housekeeping straight after the round helps ensure you stay focused on your priorities and avoid having to fight unnecessary fires.
Every company will have its own specific requirements too (ours is reporting to our regulators), but here's our general checklist:
Depending on which market and industry you are operating in, you will need a different level of coverage. Remember if you don't already employ staff, but plan too soon (with the help of the newly boosted bank balance) you will need to get cover in that case, so tell your insurance broker about it now. Be honest with your insurance provider and tell them exactly what you are planning to do. This way, if the worst happens, you have full coverage. That's not to say you shouldn't shop around for the best price too.
It may seem silly to create a spreadsheet for you, your co-founder, and 2 angels, but it's easy to do while you have all the numbers to hand. You will need this info in the future, so it saves time digging it out. It also helps when you want to issue share options to staff, so you can add the total option pool and grant details and track as you go. Yes, jazzy tools exist here, but do you need the expense right now. Whilst we are on the topic - word of caution, you need to get a valuation for any options that you issue. These need to be approved by the tax authority. In the UK you could have a go yourself (or ask your accountant to do it cheaply), but in the US you definitely can not. A little advice I shared with a newly funded founder this week was to wait on issuing options. If staff are newly hired, you can agree the number of shares (avoid %) and the vesting schedule, but there's not much hurry if you are still pre-revenue and a year away from anyone vesting.
You now have money - and the people who gave it to you will want to know what you are doing with it - and how it's being spent. You will also have reporting needs to the tax authorities. Choose an accounting software, we see Xero and Quickbooks as being the most popular amongst startups. They are fairly user-friendly and accountants love them, not to mention both allow you to run payroll in one click. In an ideal world, you will have this up to date each month, but in reality, it rarely happens and gets updated late or not until year-end. Keeping a close eye on your bank statement can be a good substitute here. Categorising spend will help ease friction with your accountant and your investors so if possible, try to do it either in your accounting software, bank account, or at least on excel.
My advice is to keep grouping simple - revenue, cost of sales, salaries, legal, software, etc. No more than 10 is needed as a first pass.
Things like reporting deadlines, tax dates, and even payroll. Schedule them in your calendar, you would be surprised how time flies, and fines can quickly roll in. With the raise complete, you will be doing more and more product building and with that comes added excitement + distractions.
More money = more spend. Now you can afford to pay for things, you need to be careful how you do that. Almost certainly you will have some level of international payments, be they single currency but international (maybe you pay USD to your team member who is currently remote) or you need a different currency (GBP, EUR, +). Our advice - your bank is going to be the worst route. Take a moment to think about the amounts you need to send, where to, and how frequently and see if 2-4% of that as a fee will hurt you. If it will, find a lower-cost solution. You can send funds for as little as 0.35% and less if you do your homework.
If it's infrequent and low volume, move on and don't waste time reviewing this.
You almost certainly have a bank account (to accept that fundraising round), but now is a good time to check it still meets your needs. We wrote a few articles on bank accounts, so check out our blog for more.
This will apply to you if you have more than one company, and you need to move money between them. An example of this is having a holding company to accept investment, and then needing to move that to an overseas company to pay your staff. We wrote about it in-depth in our blog post here. You can plan this yourself and have a chat with your accountant.
Now that you actually have investors, you will want to keep them up to date. Otherwise, they might start chasing you and demanding answers at just the exact moment you were mid-flow solving a super big problem.
Schedule time each month to write this. Include some key metrics, both financial (cash spent, cash remaining, revenue, etc) and non-financial (key milestones and achievements, asks for support/intros). Try to keep it high-level but specific, and if your investors ask for something, just add it to the template. It avoids you having to dig out that number when they call you on a Sunday morning.
Whatever you are doing, you can not afford not to take free money. Many governments offer free cash under a scheme called R & D tax credits. They give you back a cash lump sum (or a deduction from your tax bill) based on the money you spend doing something innovative. There are other schemes, grants, and programs in each market. They can take a little time to apply for but more worth going for. You can apply yourself, but you probably want to get your accountant to do it the first time at least, so you can see what is required. Push for a fixed fee, but most will tell you they want a %.
Bootstrapping is all about getting as far as you can to get to the round, but now that you have done that, you're into a new phase that includes corporate housekeeping. Keep the mindset of doing what's needed and postpone what can be postponed. With each funding round, revisit those priorities.
Finally - context switching is a killer. Avoid it where possible and get into routines with non-value add stuff. Hopefully, we have highlighted the obvious here but if not, get on top of it.
Could or should you hold money in different currencies? Probably yes. If so, this article will help you find the solution for you.
Yes, it's possible to open a business bank account without a credit check. Getting a loan is trickier, but it doesn't have to be.
How to calculate the price when you have multiple entities producing goods or services