David J. Muchow - The 7 Secret Keys to Startup Success: What You Need to Know to Win

Copyright 2022 by David J. Muchow

All rights reserved. No part of this book may be reproduced in any manner without the express written consent of the publisher, except in the case of brief excerpts in critical reviews or articles. All inquiries should be addressed to Skyhorse Publishing, 307 West 36th Street, 11th Floor, New York, NY 10018.

Skyhorse Publishing books may be purchased in bulk at special discounts for sales promotion, corporate gifts, fund-raising, or educational purposes. Special editions can also be created to specifications. For details, contact the Special Sales Department, Skyhorse Publishing, 307 West 36th Street, 11th Floor, New York, NY 10018 or .

Skyhorse and Skyhorse Publishing are registered trademarks of Skyhorse Publishing, Inc., a Delaware corporation.

Visit our website at www.skyhorsepublishing.com.

10 9 8 7 6 5 4 3 2 1

Library of Congress Cataloging-in-Publication Data is available on file.

Cover design by Kai Texel

Cover image: Getty Images

Print ISBN: 978-1-5107-7064-5

Ebook ISBN: 978-1-5107-7065-2

Printed in the United States of America

To Marilee, my amazing wife, and my rock for over fifty great years. A wonderful friend, mother, and grandmother. Simply the best!

CONTENTS

ACKNOWLEDGMENTS

T his book was a team effort. Thanks to my clients over the years who have given me the experiences that have inspired the business, legal, and other stories in the book; Georgetown Universitys Walsh School of Foreign Service, especially Dean Hellman, Rosie ONeil, Ted Moran, and Rodney Ludema, who gave me the opportunity to teach Law, Business, and Entrepreneurship there, and the amazing students who make it so fulfilling; my expert literary agent and kind advisor, Nancy Cushing-Jones, who was so helpful in finding the great publishing team at Skyhorse Publishing Caroline Russomanno, my editor there, whose brilliant insights and attention to detail have been so helpful; and Tony Lyons and Mark Gompertz at Skyhorse who supported this book; US Senator Byron Dorgan (ret.) for taking the time to write the Foreword; Carol Stevens, whose enjoyable fiction classes and comments were so helpful; Carole Sargent, PhD, director, Office of Scholarly Publications, Georgetown University, who guided me with my book proposal; Mike Masucci, film producer, with great story structure skills; Maureen Hirsch of Clydes Restaurant Group for pictures of The TOMBS Restaurant (and just for the record, the CIA never hired waiters at The TOMBSat least as far as I know)! And Dennis Welch, president of Articulate PR and Communications, for his insights on publicity campaigns; Roland McAndrews, Partner, Bookoff McAndrews for patent advice; Lynn Jordan, Partner, Kelly IP, for trademark advice; and Elizabeth Jia of Arc Moon for her design work.

To my wife Marilee, who patiently put up with me while I was writing; our son Scott Muchow, a great sounding board and source for ideas who always encouraged me; our daughter Heather Schwager; grandchildren Zoe and Zadie Schwager, who helped with graphics and proofreading; and our granddaughter, Lily Catherine, who inspires our extended family with her endless energy and joy. To all of you, thanks!

FOREWORD

M uch of the economic success the United States enjoys has come from the innovative work of entrepreneurs from Henry Ford to Bill Gates. And our continued success will come from the new and exciting entrepreneurs and innovative companies that will keep us competitive in this rapidly changing world.

Serving as a US senator, I had the opportunity to know many men and women who dreamed of starting their own business. I watched some succeed and build large, profitable businesses, and saw some fail. And I wondered, what was the difference? It seemed to me it was having the knowledge you needed to build the business. That is exactly what this book is about.

I also understood the connection between private sector businesses risking their capital to create jobs, building products, and providing services and the public sector establishing the rules to help guide those businesses. I know the public and private sectors must work as partners to continue building the American economic engine and our standard of living. Businesses also need help understanding the tools they need to succeed.

This book provides those tools. While most business executives have expertise in some areas, it takes much more to grow a successful company. They need to create a team, understand marketing, hire personnel, and raise capitalall while re-engineering their product. And they face a barrage of basic questions such as:

How to divide equity among partners?

How to compensate workers; and

How to raise capital within the SECs rules?

Thats where this book comes in. This is not your uncles or aunts business book. The 7 Secret Keys to Startup Success makes a unique contribution. It breaks the mold by providing more of the essential, practical, legal, and business information that growing businesses need to succeed.

It covers the basics like incorporating and raising money. Then it shows you step-by-step what, when, and how to do each task. Its like having a seasoned lawyer and business consultant by your side all the way from concept to commercialization and beyond.

As many as eight-out-of-ten new companies fail in the first year. So its amazing that so little attention has been paid to why companies fail. David Muchow has worked with hundreds of startups and other companies over decades and unlocked the major reasons for these failures. These include mistakes that CEOs dont even know theyre making, like giving away too much equity and not putting agreements in writing. So, this book also tells you what not to do as well as what to do. In short, it helps you to avoid what David calls Startup Suicide.

It also contains new, useful information you wont get in business school, law school, or anywhere else; and is packed with charts, model legal forms, and other information, such as how to calculate rate of return and reduce legal fees.

At the policy level, it discusses the need for a national dialogue to better support new businesses. Its a call to action so they can go from a concept to commercialization in months, not years.

The 7 Secret Keys to Startup Success covers more ground than other books because the author has worked in every area of business development, from the shop floor to being an inventor, a serial CEO, attorney, and teaching law, business, and entrepreneurship at Georgetown University.

Finally, business books should be fun to read. So, at the end of each chapter there are fictional stories inspired by actual cases, illustrating the principles in the chapter. These involve the adventures of Professor Scooter Magee, a business expert who travels around fixing failing companies.

I enjoyed this trailblazing book thats packed with the critical business and legal information you need to succeedand is lots of fun as well!

US Senator Byron Dorgan (ret.)

Sen. Byron Dorgan (ret.), served in the US House and Senate for three decades. He is a New York Times bestselling author of five books, has been a visiting professor at Georgetown University, and is a senior policy advisor at a premier Washington, DC law firm.