Co-founder disputes are cited as the reason for around 65% of startup failures, according to research by Harvard Business Review. This makes the division of equity between co-founders a key decision that can make or break a startup.

Everything feels possible when you’re starting up a new business. You have a great idea, trusted co-founders, and everyone is cheering you on. Slowing down to make sure all the legal documents are signed and sorted can feel like an unwelcome delay, but it’s a vital part of making sure you, your co-founders and your business are protected for the future.  

The principal benefit of having an early-stage fund in your capitalisation table is that it can help your startup to raise investment. An early-stage fund investor represents an important vote of confidence in your business. It tells other potential investors that your early-stage startup has been successfully vetted and qualified by a specialised fund. This encourages both existing and potential equity holders to invest more because they perceive less risk. 

Having a long-running technical position in your start-up might sound like something that’s only necessary for more established companies. Why hire a member of staff when you can outsource software development? In reality, there’s much more to start-up tech roles than just coding. The right person will provide a range of essential skills that will grow and evolve alongside your company. 

Building a business around monthly recurring revenue (MRR) makes growth more predictable, and provides investors with a useful metric for understanding trends in profitability and cash flow. This makes the MRR business model popular with technology startups that offer software as a service (SaaS).