The Support Players

Abstract

Lawyers, tax consultants, and accountants, who have experience with startups and their needs, are important support players. An entrepreneur should not underestimate the importance of these support players, and always try to get only excellent players in this field, too. Always think big, and pick accounting and law firms which might be too “big” for your company at the time. Because they will provide you with credibility and professionalise your business from the very start on. If you want to compete with the big companies, you need to be on an even playing field. In whatever you do, you should therefore surround yourself with the best. Do not compromise on excellence, only because you are small and have little money. Instead you should try to attract these big and prestigious law and accounting firms and get them to postpone their fees until you get funded by pointing out to them the chance that they will get their money when you get funded and that they will continue to be your law or accounting firm when you grow and go public. Thus these firms will continue to bill you, but will not expect you to pay them until you get funded. When you get funded, they want to be paid. But if you do not get funded they have to write off their time. In return for that downside risk, you have to offer them some upside potential. Often these firms will be prepared to take the small downside risk of not being paid for the upside potential of continuing to be your accounting or law firm when you have become a large company. Sometimes you could also think about selling your lawyer or tax consultant a percent of the company at the initial stage which will be diluted down to half a percent or a quarter of a percent or less by the time you go public. But if it turns out to be a 150 million dollar company, that quarter of a percent could be worth 350.000 dollars or more.