Thinking of things necessary to get the company off the ground in the right way: incorporation, founder's agreements, terms of service, privacy policy, contractor agreement, employment agreement, intellectual property assignment. Thanks!
For everything you've listed above, I'd spend no more than $5k. Most of the docs you've described above exist in many places over the web in template form that you can modify.
You can spend your equity anyway you like, but I like to spend equity thinking of it being valued at the IPO or exit price. In other words, don't think about it as your current valuation, (let's call it $3m) but rather $300m valuation.
In that scenario, you gave away $500,000 of value to pay a $5,000 bill. Now of course, the odds for all of us are slim that that's going to happen, but I think being disciplined about how you spend your equity is crucial to building a big enterprise.
In the early days, the most important docs of what you describe above are the founders (shareholders & employee) agreements.
As a fellow SaaS entrepreneur and investor in other SaaS companies, I'm happy to talk to you about this or any part of the startup process.
Answered 11 years ago
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