Everyone who's been down the startup road has made a mistake or two -- and we don't just mean the sandals-with-socks kind of mistake... Nope, we're talking real mistakes, some of which can even be fatal. The good news? Many of these same mistakes are also avoidable. Key topics include: - Financial forecasting - IP protection strategy - Setting appropriate funding objectives - Issues with resource allocation - Understanding and monitoring your cash burn - Getting your best valuation - Building the essential infrastructure your business needs to scale - and more...!

1. Startup Mistakes:
What to avoid, and how to succeed
Starting up the right way – by avoiding the
most common legal, financial, banking, & HR mistakes
Gadiel Morantes Ryan Johnson Emily Levin Ashley Bennett

2. About Early Growth Financial Services
• Outsourced financial services firm providing small to mid-sized
companies with an integrated financial solution
• Three platforms of services and support: transactional
accounting, CFO, compliance
• Services include: AP/AR, financial forecasts, cash management,
financial statements, monthly close, 409a valuations, taxes
• 200+ successfully funded clients nationwide
• #5 Silicon Valley Business Journal Fastest Growing Private
Company Award 2013
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3. About SBL Counsel
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• Boutique transactional practice that caters to small and middle
market in three practice groups: Silicon Beach Legal, Business
Law & Strategy & Lifestyle Brands & Services
• Services range from advising emerging businesses to facilitating
complex business transactions
• Our Silicon Beach Legal group offers assistance with respect to
structure, capitalization and operation
• “Big firm" understanding with “small firm” personal dedication
and responsiveness
• Managing attorney has 10 years of deal transaction experience

4. Presentation Overview
Understanding the most common startup mistakes can help
improve your chances of startup success
• Mistakes happen, but…
• Common startup predicaments
• Lack of preparation
• Fundraising blunders
• Financial issues
• Lack of infrastructure
• Hiring mistakes
• Final thoughts
• Q&A
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5. Resource Allocation, Financing, and Personal
Attention
Common startup predicaments
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Problem Solution
Allocation of Resources: You need
resources to provide for development
and marketing; you also need resources
to protect your IP and position yourself
for investment.
Carefully gradate each stage of legal
protection that you need at each stage
of your development so you can budget
your resources accordingly.
Financing: You need to raise capital to
fund your efforts, and the proper
documentation to show your
sophistication
Find trusted legal and financial advisors
who can identify your current needs and
provide the right time-tested tools to
navigate the fundraising process.
Personal Attention: You appreciate the
contract templates that some firms
provide you, but you need a reliable
contact that is willing to answer your
many questions about how they are to
be implemented.
Establish your need for personal
attention and take the firm for a test
drive to make sure it is the right fit by
sitting down face to face, to see how
well you are able to communicate.

6. Lack of Preparation
With proper planning, you can easily avoid the most common
mistakes startups encounter during the early stages
• Business planning
• Legal formation and
founders’ equity grants
• Forecasting and expenses
• Selecting business
partners
• Intellectual property (IP)
protection strategy
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7. Fundraising Blunders
VC, angels, bank debt, crowdfunding…when you’re ready to
raise funds, clarity is key
• Valuation
• Funding structure
• Funding objectives
• Negotiating terms
• Investor management
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8. Financial Issues
Business is money – so careful financial management and
accurate financials are essential
• Cash management
• Checks and balances
• Cash burn
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9. Lack of Infrastructure
To build a thriving startup, start with a solid foundation
comprised of practical and flexible systems and processes
• Legal infrastructure
• Accounting and finance
infrastructure
• Banking infrastructure
• HR infrastructure
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10. Hiring Mistakes
Building the right team and keeping them motivated is crucial
for success – not to mention it’s probably your largest expense
• Hiring slowly – identify,
interview, accept
• Firing quickly – manage,
evaluate, terminate
• Compensation
Equity Ranges for Non-Founders
COO 2% - 5%
CXX 1% - 3%
VP of Engineering 2% - 4%
Other VPs 1% - 3%
Directors 0.75% - 1.50%
Key Engineering Roles 0.25% - 1.50%

11. Final Thoughts
“It may seem counterintuitive to think that something as
disruptive, innovative, and chaotic as a startup can be
managed or, to be accurate, must be managed.
Most people think of process and management as boring
and dull, whereas startups are dynamic and exciting.
But what is actually exciting is to see startups succeed
and change the world.”
-Eric Ries, The Lean Startup

12. Q&A and Contact Us!
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Gadiel Morantes
gmorantes@egfs.co
415.234.3437
Ryan Johnson
rjohnson@earlygrowthfinancialservices.com
617.869.2541
@EarlyGrowthFS
Ashley Bennett
ashley@sblcounsel.com
Emily Levin
emily@sblcounsel.com
310.409.1006