David S. Rose - The Startup Checklist: 25 Steps to a Scalable, High-Growth Business

Cover image: David Noles
Cover design: Dejan Jovanovic

Copyright 2016 by David S. Rose. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Names: Rose, David S., 1957- author.

Title: The startup checklist : 25 steps to a scalable, high-growth business / David S. Rose.

Description: Hoboken : Wiley, 2016. | Includes index. | Description based on print version record and CIP data provided by publisher; resource not viewed.

Identifiers: LCCN 2016013847 (print) | LCCN 2016008684 (ebook) |ISBN 9781119163794 (hardback) | ISBN 9781119164050 (pdf) | ISBN 9781119164043 (epub)

Subjects: LCSH: Entrepreneurship. | New business enterprisesManagement. | Investments. | BISAC: BUSINESS & ECONOMICS / Entrepreneurship.

Classification: LCC HB615 (print) | LCC HB615 .R656 2016 (ebook) | DDC 658.1/1dc23

LC record available at http://lccn.loc.gov/2016013847

To Daniel and Joanna Semel Rose,

my unwavering supporters throughout a half

century of entrepreneurship.

BEING AN ENTREPRENEUR is one of the greatest ways to make the world a better place. Building a company the right way with a great product, mission, and structure, unlocks human potential and allows you to have enormous impact in your immediate and extended community.

This book is priceless in helping you do just that. It is a step-by-step guide to taking an idea and turning it into a business.

I have been starting businesses all my life, since I was 12 years old in Junior High School. Since founding Idealab as a technology incubator in 1996, I have started more than 100 companies. The steps shared in this book are so clear and logical, it's painful to think about how wildly useful it would have been to have in my hands 20 years ago.

This book will help you avoid mistakes and make you 1,000 percent smarter in your approach to building a business. I guarantee that there will be at least one chapter in this book which could dramatically change the trajectory of your success and happiness. David describes how to approach your business when it's just a kernel of an idea, how to develop a plan and test your product in the market, how and when to hire the right talent (and importantly, how to think about equity splits and compensation), and takes you through the various administrative tasks that can be seen as tedious but are critical to avoiding expensive mistakes in the future. He outlines how to approach raising money and investors and the different sources of money available for a startup.

Starting a great company is so much more than just a great idea. There are a thousand things you can do to unwittingly undermine your success. This book will help you navigate some of the critical junctures that will make or break your progress. In addition to the actual checklist, David provides a wealth of online resources that will allow you to become fully educated on every aspect of building your company. This book outlines that process betterand all in one placethan any other thing I have ever read.

David S. Rose has seen it all, over many years and across thousands of companies, and then, to the great benefit of the rest of us, has distilled the essence of what it takes to succeed. I can't say strongly enough how much I feel following the checklist David has created will help you make your company more successful.

Bill Gross

To open a business is easy, to keep it open is an art.

Chinese proverb

ENTREPRENEURS HAVE BEEN STARTING COMPANIES without reading instruction books since the first Phoenician trader bought his first ship over 5,000 years ago. And for those who do want some guidance, Amazon would be pleased to sell you any of the 93,210 books listed in its start a business category, many of which are quite good. So why is there a need for yet another startup book?

Because this book is designed for a very specific type of business starter: the entrepreneur who is deliberately setting out to create a scalable, high-growth business designed for the twenty-first century, a business that will likely hire employees, issue stock options, raise money from outside investors, grow rapidly, and eventually either be acquired by a larger company or go public through an initial public offering. It turns out that starting that kind of business gets very complicated, very quickly. Making even small mistakes at the beginning can cause problems at every later step along the way.

I've been starting companies myself for over 45 years as a serial entrepreneur (more than half a dozen of them), and as an active business angel investor I have personally funded and advised over 100 others. I've founded, taught in, or advised many of the country's leading entrepreneurship training programs, and, as the founder and CEO of Gust, I've learned from the aggregate experience of providing the tools used by more than half a million startups around the world. I've also answered over 4,000 questions from aspiring entrepreneurs on Quora, the online question-and-answer site, and heard of just about every variety of problem in the playbook.

Along the way, I have learned firsthand the problems that can quickly arise from starting off on the wrong foot. They range from the fundamental (charging off to start a business that just doesn't make sense) to the painful (hooking up with people whose interests are divergent from yours) to the tragic (getting equity allocations wrong at the beginning and never being able to recover), all the way to the really, really expensive (making simple mistakes at the incorporation level that result in five- and six-figure cleanup costs the first time a serious investor is thinking of supporting you).