Thinking about leaving the law to start your own Internet company? Learn about the basics and how best to get started.
Learning the Basics of a New Internet Start-Up Company
Q: Where does one go to learn the basics of starting a new Internet venture? I've heard about business plans, but have no idea what one actually looks like. Would you recommend that I go to business school, or at least try to take some MBA classes, before leaving my secure (but boring) law firm job to try to start my own company?
A: Don't make a move until you've fully educated yourself about the business environment you want to enter and have researched the potential market for your product or service. As one former practicing lawyer who started two successful business ventures advises, Research, research, and research some more.
He also suggests building your business little by little. You don't have to shut down your practice and devote all your time to the new. You can see what happens with a smaller effort, then make some hard decisions.
For low cost, easily accessible business advice, I'd start with the Small Business Administration, and its Service Corps of Retired Executives (SCORE). You probably won't find much information specific to Internet ventures, but you'll receive sound personal advice just the same. Both resources offer sample business plans and input about how to satisfy government regulations and licensing requirements. Volunteers with SCORE will even coach you through the business development process in a series of face-to-face meetings.
I would also read magazines like Inc., Fast Company and Business 2.0 for well-written, in-depth articles about the dot.com environment, and announcements of online and live educational seminars.
Do this kind of informal research rather than looking into MBA programs. You're already well-credentialed. Earning another degree won't get you any closer to being a successful entrepreneur. Only well-thought-out action will.
What Are the First Steps in Starting My Own Internet Start-Up Company?
Q: If I am interested in starting my own Internet start-up company, what are the first steps I should take? At what point do I begin to raise money, and how do I go about doing so? Also, once I do raise money, what are my obligations to investors?
A: Well, I've started and run one for 3 years. First step, write a business plan. Investors will demand to see it, as will others. Get some help, and seek examples from others (particularly those who have successfully raised money). Begin to raise money immediately and never stop. I can't stress too much how important it is to have sufficient capital in the pipeline to achieve you goals. First step is usually angels (wealthy individuals), then institutions (Venture firms). Other sources are corporate strategic investors (i.e., Coca-Cola might be interested in investing in your company if you were developing a new way to bottle liquids).
Once you've raised the money, the securities laws and the local state statutes are pretty clear on how to handle your investors. Your law firm will be helpful here. Basically, they want to see you succeed. Best rule here is to keep them informed, treat them like you would like to be treated if you were an investor. Tell them how the company is doing (both good and bad)...and remember, nobody likes a negative surprise. If there are problems, get them out front early and ask for help with them...you'd be surprised who might be in a position to help. Don't be bashful about the good news either.
Get a good law firm and accounting firm hired and keep them informed.