6 steps for scaling a startup

1 Summary

Establishing a startup’s business infrastructure early — that is, establishing support in the areas of legal, accounting, tax, insurance, and human resources (HR) — provides a number of critical benefits, including:

  • Minimizing risk
  • Increasing efficiency
  • Standardizing contracts
  • Quickly processing one-off contracts and special circumstances
  • Safe harbors
  • Advice on new business practices and new jurisdictions
  • Providing a sounding board
  • Facilitating tax benefits and avoiding tax problems
  • Building wealth (e.g., founders’ ownership and intellectual property rights)
  • Smoother financings
  • Effective employee management (i.e., avoiding employment-law issues)

Sections of this paper discuss each of the above benefits and provide suggestions for management teams that will facilitate establishment of an appropriate infrastructure.

Note: The situations described in this note are given only to illustrate concepts and should not be taken as providing legal, tax, or accounting advice.