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business formation & planning Archives

The basics of choosing to become a limited liability company

From hiring the right employees to attracting customers, new business owners in California typically have an assortment of things on their to-do lists. Another important consideration for entrepreneurs just launching a new enterprise is how they'll opt to classify their business for legal purposes. While there are several options available, one of the least complicated is to establish a business as a limited liability company, or LLC.

Startups grow through funding rounds

Many entrepreneurs in California attempt to use investment capital in an effort to scale up their companies. Typically, a startup company will go through multiple funding rounds to meet its capital needs. In exchange for funding, investors will receive an equity stake in the business. It can take anywhere from three to nine months to complete a funding round, and later rounds generally take longer to complete because of increased due diligence.

Considerations for attracting startup investors

Which new California businesses qualify as startups is a common question in entrepreneurial circles. Typically, the term "startup company" refers to a new organization that has little or no history and little or no sales. This lack of history makes a comparison with other businesses or time periods difficult or unduly speculative. Because they lack a track record of success, startups are often seen as high-risk. Investors are often more interested in a startup's core idea or technology than they are in immediate revenues or other numbers.

Choosing incubators or accelerators for startups

California entrepreneurs may find that establishing their startup can be difficult. However, there are planning options, such as incubators and accelerators, that they can pursue in order to be able to properly launch their startup. It is important that entrepreneurs know exactly what these programs are and which one is appropriate for their situation.

Top tips on creating a startup business

Starting a business in California is relatively easy, but actually being successful tends to be more difficult. Those who are looking to start a company should look for inefficiencies in the market that they can remedy. By looking for a niche, it can be easier for a new company to compete with established players in a given industry. A business plan can help an individual create a list of potential niches.

How angel investors help new businesses

Entrepreneurs in California and throughout the country could benefit from what is known as angel investing. An angel investor is generally a friend, family member or professional connection who is more interested in potential than profit. Of course, such an investor is hoping to get a return on his or her investment. However, a business owner may not be on the hook for repaying the investment should the company fail.

The importance of protecting intellectual property

There are many factors to consider when creating a new company, and protecting intellectual property is one of the most important. While not every startup has information that seems as secret as a famous recipe or formula, almost all companies in California have some kind of proprietary data that is worth protecting. A variety of legal tools are available to shield IP.

Getting SBA loans

The United States Small Business Administration backs loans that entrepreneurs in California and the rest of the country can use for almost any type of business purpose. The loans have competitive terms and rates, longer times for repayment, smaller down payments, guardrails for going through the loan process and a wide selection of loan options. Almost any small business that is in operation and is providing a service or product is able to apply for SBA loan. However, it is important that small business owners who apply for the loans understand how they work.

Steps to creating a successful startup venture

Almost anyone can start a company in California. The first step in creating a successful venture is to come up with an idea that works. Usually, this happens by creating a unique solution to a problem that consumers can latch onto. It is important to understand that the idea only has to be better than what currently exists.

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