Organization for Founders: Here’s How to Achieve It

There are so many moving parts for founders, so we often see early stage businesses fall behind on their organization. Handshake agreements aren’t formalized, employee IP assignments are signed in counterparts but never collated, the list goes on. While getting your documents in order might not always seem like a priority, it should be. 

Consequences of Poor Organization for Founders

Falling behind on your admin can lead to significant delays in your financing or your exit. In the absence of a well organized data room, founders might find themselves in the unenviable position of needing to pull together a data room and organize hundreds, if not thousands, of documents after receiving a term sheet or letter of intent. 

In some cases, it can also result in financial losses – as issues present themselves later in negotiations – and, worst case, may result in deals falling through. It can even prevent you from attracting the attention of investors, since your disorganization isn’t likely to inspire confidence.

Founders, Here’s How To Get Organized

Getting organized does require a significant investment of time to begin, but will ultimately result in many benefits once your system is set up. We recommend creating a folder stored on a secure cloud server which can only be accessed by senior management. Within this folder, you should generate additional folders for categories of documents you will need to produce for investors undertaking due diligence. This includes, but isn’t limited to:

• Minutes for board and shareholder meetings. 
• Corporate charter documents, including your company’s Articles of Incorporation and Bylaws. 
• Agreements relating to stock and shareholder rights. 
• Intellectual property agreements, including NDAs, IP assignments, and a list of confidential information, trade secrets, and registered patents, copyrights and trademarks. 
• Employment agreements and employee policies. 
• Details of previous financing rounds. 
• Business planning, including market research, marketing, and growth strategy.
• Financial statements, including details of debt and liabilities. 
• Property, plant, and equipment documentation, including technology planning and inventory. 
• Commercial agreements, including property or equipment rental agreements, joint venture and/or partnership agreements, and agreements with third-party vendors.
• Environmental, social and governance documentation, if any. 
• Insurance policies.

Keeping your records in order will ensure you’re ready for any business opportunities that come your way, while also helping to mitigate your legal risk and identify issues as early as possible. 

If you need assistance identifying the corporate documents you’re missing or getting organized in advance of a financing round or exit, reach out! We’re here to help!

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