How Long To Keep Business Records After Closing Company

You've pitched your product, networked with investors, and even closed your financing round. So, what happens after the fundraising procedure?

Here's a hint: It's not a long vacation

Subsequently months of intense prepping, back-to-dorsum investor meetings, and tense fiscal negotiations, closing a funding circular is cause for celebration. Endmost one affiliate of the startup journeying, it starts another focused on accelerating growth.

Yet transitioning back to "business-as-usual" afterwards fundraising is no longer "as-usual" for founders who now need to classify funding beyond their business operations. With more than greenbacks on hand, yous take pressure to spend it: Rent more than people, discover a new office, redesign your product, get a COO, and the list goes on.

In this post, I offer outset-time founders five practice's and don'ts to consider later closing their start round. I've also shared how nosotros approached these dissimilar decisions at DocSend after endmost our beginning round of existent funding in belatedly 2013*.

Do: Get your finances in society

Getting finances in lodge is one of the first priorities for founders after closing a funding round. Partnering with the right financial services institution is important for future-proofing business concern strategies and revenue growth.

Option the right banking company for your needs. When because dissimilar banks, await for those with experience helping small-scale businesses like yours grow. Reasonable fees and online user experiences are considerations to keep in mind hither as well.Explore their customer service offerings and whether they'll discuss your growth plans and ways to support them. For case, some banks may offering options to plan your automatic payments co-ordinate to cash menstruum.
- What nosotros did at DocSend:
  Before raising money, we put our shared, founder-contributed money into a US Bank account. Nosotros initially tried to use the brand in the financial district, but I gave upward afterwards trying to explain to them why our business was incorporated in Delaware when we're located in San Francisco. (They demanded to talk to our headquarters in Delaware, which showed they hadn't worked with startups before.)After raising, we decided to employ a depository financial institution that caters more to startups. While nosotros liked the people we worked with at US Bank, it was clear we weren't their typical clientele. So nosotros decided to switch to Silicon Valley Depository financial institution.
Choose a corporate credit bill of fare. Picking a corporate credit menu is similar to choosing your personal credit card. Look at its perks and benefits, such every bit travel rewards, insurance, or cashback programs, and whether they utilize to your business.Don't forget to expect into miscellaneous fees, such as foreign transaction and greenbacks advance fees, as well as applicable interest rates. Yous tin also consider a card that doesn't crave a personal guarantee, such as those specifically designed for startups.

Don't: Overlook your accounting and insurance needs

Unorganized records and scant insurance coverage can quickly snowball into hereafter financial headaches. Be mindful of how you need to organize records for tax purposes and options to best protect your visitor.

Fix bookkeeping and revenue enhancement services right away. Updated, organized fiscal records are important for filing taxes, also every bit providing investors, landlords, and business partners with timely, accurate financial statements.Setting up a proper organization, in the start, saves you a ton of fourth dimension and money. Utilise a bookkeeping service that tin can do this for you lot rather than cleaning upwardly messy records downwardly the road.
- What we did at DocSend:
  The start bookkeeping firm I hired was a referral, and information technology lasted about 3 weeks until it immediately became clear they were used to working with traditional SMBs. They didn't understand how we were spending our money, what our business did, or what our investors cared most. They were too very slow to respond.
  Simplexity understands how high-growth, tech-startups operate, which makes them easy to work with. Especially relative to our first choice, we've been thrilled to work with them. They deliver on what they promise, aid with a wide range of requests, respond quickly, and proactively go ahead of whatever potential issues.We pay them a fixed monthly fee, which also makes me experience free to reach out when I demand their help.
Exist thoughtful about your company insurance. Be mindful of the coverage types and amounts yous need rather than focusing on specific insurance providers. Consider the following coverage types:
- Directors and officers liability insurance . Since company directors and officers can exist personally sued for company dealings, this coverage protects them in litigation. (It may also exist required as part of your financing.)
- Business organisation owners insurance . This is standard coverage that covers your business organisation and assets.
- Workers' bounty . This is also standard coverage and generally doesn't cost a lot to roll in.

Do: Re-evaluate your legal needs

Now's the time to recall near your legal needs for the foreseeable future. Figure out where you need legal support, where you don't, and which services and tools are worth investing in.

Re-evaluate your legal counsel needs. You likely had legal counsel to help you negotiate financing documents during your fundraising round. How did you similar working with them? If it wasn't the all-time experience, this is a cracking time to consider switching firms.If you only need assistance for one-off activities like terms of service changes, less-expensive services like UpCounsel could be a good option to consider. For bigger, more than of import things such as financing, you want to invest in an experienced business firm with the right connections.
- What we did at DocSend:
  Nosotros ended up switching firms later our raise. I accept bang-up respect for the first firm we worked with, but working alongside a firm with more relevant experience in our space was a better fit for our longer-term legal needs. For example, upon switching to our new house, Goodwin, their team was bang-up at helping usa think through our IP strategy.
Find a respected house for your 409a valuation. Since company metrics don't always exist for early financing, 409a valuations are ordinarily made up of comparables, complex calculations, and firm intuition. Find a respected evaluating house with a reputation for responsiveness since this valuation has to exist done before you can distribute stock grants.Getting this valuation washed is also really important earlier you give out whatever stock grants, and then do it early on. If you don't—and your stock goes up a lot—you could exist in trouble. (But get information technology done!)
- What we did at DocSend:
  Scalar Analytics has a skilful reputation and has been efficient with quick turnaround times. We also found their cost to exist reasonable relative to other options we considered (some were cheaper; some were far more expensive).
Don't stress over managing cap tables yourself. Managing cap tables can speedily plow complicated and time-consuming. If you're hiring more people and offer stock options to new hires, implementing cap tabular array management software is a bang-up style to continue this organized and authentic. (It also gives you one less thing to stress over getting correct.)

Don't: Make hasty human being resources decisions

Your employees reflect your company'south brand and culture. Robust health and benefits packages will aid you attract and retain the talent you need to bring your business into its next stage of growth.

Pair the right benefits with the all-time platform. Consider everything you'd like to offering your employees earlier choosing a benefits platform. Yous want a tool that will provide both you and your employees with exceptional client service.Wait for a simple, piece of cake user feel that also minimizes any demand for your directly oversight and direction. Consider providers with potent benefits compliance back up as well.
- What we did at DocSend:
  We initially started off using a total-service 60 minutes and accounting firm. While they were quite responsive, everything was nevertheless manual and nosotros paid them a not-insignificant fee. Zenefits automates near everything, and you can get things washed in one identify. They have a fantastic business concern model in that they act equally your insurance broker (for which they are paid) without charging anything extra.For reference, a typical insurance broker does zip other than collect a paycheck in perpetuity (a pct of your insurance spend). Zenefits gives you a keen software platform for your broker fee and you never know the difference, other than having a useful ongoing software platform to use. I recommend using them from the outset.
Don't skimp on health insurance. Taking care of your team (and yous!) is the all-time investment you tin can make. Become for the highest coverage tier yous can without likewise much compromise. While you don't want to break the bank, you do want to give your employees the best wellness coverage you tin.PPOs and EPOs tend to be the most pop programme types and, unlike HMOs, don't require a visit to chief intendance providers earlier seeing specialists. If you can, use your team's healthcare provider preferences to influence your decision.

Exercise: Invest in the right technologies and tools

Improve your operations by investing in the right tools. Await for unlike technologies that not only automate processes but give you greater visibility into them so you lot tin brand more informed decisions.

Select a flexible expense reporting program. Managing expense reporting is easier to do with a software program than using spreadsheets. You can as well employ these tools to customize expense policies and define how and when employees become reimbursed.Here, yous desire something relatively inexpensive with flexible customization options. Consider tools that integrate easily with any bookkeeping tools you're using, such as QuickBooks Online.
- What we did at DocSend:
  While Expensify has its usability quirks, it'southward been a reliable and easy enough system for our team to submit expenses to. (SmartScan is surprisingly not useful.) Nosotros cover everyone's telephone and internet bills, which they submit for monthly reimbursements. Our accountant sets up our policies based on our rules so handles the reimbursements. (I take care of approvals.)Similarly, QuickBooks Online has been everything we've needed information technology to be. Hither, it's most important that your accountant is comfortable using it. The system makes it easy to put authentic financial statements together that go along us in squeaky-make clean compliance.Information technology'south easy for me to look for unusual expenses ahead of each investor update, besides as see how much we spend in each expense category. It likewise integrates with our expense and bill payment systems.
Recollect virtually the employee experience when choosing a payroll tool. Expect for payroll software designed to support startups, especially those with services to assist small businesses stay on top of changing regulations and impacts.Go for something with an easy-to-use user interface that'south simple for employees to use. Remember, a good payroll tool is one that makes the entire procedure simple and piece of cake for all parties.
- What we did at DocSend:
  Before implementing ZenPayroll, we used another payroll provider that felt like it was made in the 1990s. (Which it was—information technology just shouldn't feel like it!) While I was apprehensive about transitioning tools, the CEO of ZenPayroll, Josh Reeves, is a friend from Stanford and I knew it simply had to be better than what we were working with.I'm incredibly happy we switched, especially since it turned out to be an piece of cake switch (our accountant was quite helpful). I've frequently had to see what's actually happening in the payroll organisation or make personal cost calculations, and I dearest how easy it is to use the tool. I highly recommend using them from the starting time.
Investor updates and board management software. Investors want to know how you're doing later your heighten. Use a tool like DocSend to securely share documents with your investors and the board. You lot can also update documents in DocSend whenever you lot need to.DocSend as well shows you exactly who is looking at your updates then you can nudge investors who aren't staying on top of what's going on. (This likewise gives you a great signal into which investors yous want to let into futurity rounds.)
- What we did at DocSend:
  After taking a bunch of money from people, they volition undoubtedly desire to know how you're doing. We accept board meetings every 2 months. Alee of board meetings, I create an updated document and send DocSend links to our board members and observers.Afterwards the board meeting, I ship a separate document with the board meeting updates to our other investors via DocSend links (even those who don't have contractual information rights).Using DocSend shows me which investors look at my updates, who they frontwards them to, and what they spend time looking at. Information technology's prissy to know that if we spend a bunch of time on a product roadmap, people actually wait at it. Our investors are awesome, and they keep upwardly to date on our progress. Information technology lets me know that when I reach out for help or advice, they actually know what our condition is.I've heard from other companies that they oasis't been as lucky. Knowing that investors don't expect at updates is a bang-up indicate; information technology lets you conceptualize who will be helpful and who you should let into futurity rounds.
Keep bill payment software in mind for the time to come. Unless you're generating large numbers of invoices, y'all may exist able to concur off on a tool for this. When you do demand automated bill payment software, a tool like Bill.com can significantly amend your accounts payable process.
- What we did at DocSend:
  Nib.com was recommended by our accounting business firm, and it's really meant to make their life easier. Information technology's mainly used for things like hire, legal, and contracting bills. I forrard our bills as I receive them (or they are automatically submitted), and so approve them once they're in there. It doesn't take much time, but it does optimize making payments for accounting.

Bonus do: Consider your office space needs

Consider working with a real manor broker—or a remote-friendly working model. Before fundraising, lots of founding teams work out of their own apartments. All the same, this doesn't calibration very well one time you offset hiring (although some people make it terminal a surprisingly long time). Discover a great broker who can assistance you lot secure a space that not merely meets your current team's needs but also supports your immediate growth plans.Alternatively, you can consider different remote-friendly models to maximize your real estate options.
- Remote-friendly companies give teams the flexibility to piece of work from home or at the office. Fewer people in the office cutting down how much space y'all demand while keeping a common spot for teams to work together.
- Likewise, remote-offset models, such as working out of your apartment, are becoming more popular and sustainable. While not having a physical office tin can exist challenging when you're growing your visitor, remote-first companies report enhanced productivity and larger candidate pools to recruit from.

Whether your team works entirely in the function, in a virtual setting, or somewhere in betwixt all depends on how you want your company to operate and what y'all want to achieve.

What we did at DocSend:
The first identify we moved was into a co-working space called the Hatch at Harrison and 2nd. We looked at a bunch of options, and this space was the best combination of location, price, natural light, and availability of food and beverages.After a few months, we upgraded to our own office. Co-working spaces are neat for a while, but they can exist distracting. Nosotros got a converted loft space that'due south 1,450 sq feet in a fantastic building. And while we've loved having our ain quiet area to code abroad in, we'll need to effigy out something new in one case we start hiring a sales squad.

In decision

The post-close period is the best time for founders to charter the right path forwards. By investing thoughtfully in best-fit business organisation strategies and tools, founders can build a foundation for growth that strengthens aslope every circular of funding.

*In late 2013, nosotros closed $i.7m from a fantastic group of investors that included SoftTech, Cowboy, Lerer, and angels.