Attitudes (need to) change when money is on the table
Every entrepreneur, no matter what type, operates within a large business ecosystem. The key to entrepreneurial success is to create a smaller ecosystem that allows you to connect to and better navigate the larger one.
Too often, though, startups have limited knowledge of the ways in which key players and networks operate. However, as your startup gains value, it’s important to learn how to navigate the ecosystem. Why? Because according to Tony Redpath, senior fellow at MaRS, “attitudes change when money is on the table.” There is more to be gained or lost at this stage.
That said, here are 10 ways to better navigate your startup’s ecosystem.
1. Recognize that you operate within a smaller ecosystem (a subsystem, if you prefer).
2. Incorporate your company.
- This protects you from personal liability.
- It also provides room to take on partners who can be paid with more than cash.
- Note that incorporation also initiates taxation, no matter which side of the border you are registered.
3. Do it right and get professional help.
- Hire professionals to manage the incorporation, legal and accounting interface between your business and the government.
- Many of the processes related to government are complex and errors can be difficult to correct.
- This will free up time and energy to focus on what you are actually good at doing.
4. Become a known entity.
- Network and join professional trade associations.
- Go where your customers are. (Don’t spend all of your time at trade shows.)
- Take your banker or account manager for coffee and get to know him or her. You don’t want to be rushing through explaining your business on the same day that you want a loan.
5. Create a shareholders’ agreement.
- A shareholders’ agreement outlines allowances for decision-making and anticipates for several standard (and non-standard) situations and challenges.
6. Protect your intellectual property (IP).
- Create non-disclosure agreements between your startup and your partners and prospective partners.
- Register your IP and get information on trademarks and patents via the Canadian Intellectual Property Office.
7. Hire new employees.
8. Register your enterprise’s name.
- This can be done via the Canada Business Network.
9. Earn tax credits through the Scientific Research and Experimental Development Tax Incentive Program.
10. Do not:
- hire relatives or old friends unless you are absolutely sure that they will add value to your company and produce something;
- commit to fancy and expensive furniture (Ikea is your best friend … for now); or
- assume that understandings you have with colleagues are in fact clearly understood on both sides.
Many of these steps can be done after incorporation because startups that are fresh out of the block don’t have any value (in venture capital terms), so the ecosystem is much smaller and navigation is less complicated. Your objective as an entrepreneur, however, is to create value for your company. So, once you begin to do so and there’s a bit of green on the table, shift gears.
Of course, there is much more to navigating the ecosystem, but don’t be overwhelmed or intimidated by it. The process is part of building a structure for success. MaRS offers a variety of programs and services to help you through the process, including our Entrepreneurship Programs and online resources.
In case you missed it, check out the video of Tony’s lecture below.
Produced by MaRS Media.
Next lecture: Introduction to Entrepreneurial Management on Wednesday, October 23, 2013.
- Speaker slides: Entrepreneurial Ecosystem and Legal Fundamentals
- Video: Operating as a Canadian Business Under the New “User-Focused” Copyright Act – MaRS Best Practices
- Article: Getting legal advice
- Article: Entrepreneurs and intellectual property
- Article: Co-founder agreements
- Workbook: Identifying Your Intellectual Property
Want to connect?
- Join the Entrepreneurship 101 LinkedIn Group.
- Follow the conversation on Twitter: #ent101
- Get updates on Vimeo.
- Download the course schedule.
- Download the course syllabus.
- Email us at email@example.com.
Gina was the interim manager of MaRS’ Entrepreneurship & Innovation Series. Prior to joining MaRS, Gina worked in the small business and startup space in a variety of roles, with a focus on business development, project management and communications. She recently completed her MBA at the Rotman School of Management. See more…