Everywhere you look, startups are springing up all over the map. Everywhere you go, tech people are lounging around discussing ideas and making them come to life.
According to the Phoenix Business Journal, investments for U.S. startups are on the rise to nearly pre-recession investment levels. In fact, they may be our secret solution to getting out of the recession.
We spoke with Allen Steigman, co-founder of Soletron — a social network and e-commerce platform for retail — and Gauri Manglik, co-founder of Fondu — a social network for reviews — about what not to do when launching your startup. These rules apply whether you're still brainstorming business ideas, or you're already pitching investors.
Don't think that things will just come naturally to you because you're an entrepreneur: Think of ideas, pick up the phone and do the work
Don't put off the legal groundwork
Allen Steigman told us:
Aspiring entrepreneurs need to understand the implications of all the different kinds of legal structures (LLC, S Corp etc), and also to make sure that all formation docs are created properly (operating agreements etc). A lot of individuals put this off when I believe it should be one of the first actions taken by an entrepreneur.
As opposed to jumping head first into the business, it is important to have these groundwork discussions on Day 1 with all stakeholders (partners, investors etc), because a lot of times there is a disconnect between them, and these details need to be worked out from the get go. It is better to have these discussions earlier than later in the company's lifecycle.
Don't be afraid to learn faster than anyone else — which means it's OK to make mistakes early in the game
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