Operating Roadmap

Launching Your Startup: From Product to a Formal Company

You’ve built your product, but to operate as a real company you need formal legal and financial structures. Incorporation not only limits personal liability – shielding founders’ assets from business debts – but also signals readiness to investors[1]. In practice, most tech startups form a Delaware C-Corporation, which is the standard for raising venture capital. Delaware law provides predictability and flexibility (e.g. flexible share classes), and VCs generally require C-Corps for investment[2][3]. By contrast, an LLC offers simpler governance and pass-through taxation, but can deter institutional investors[2]. A hybrid S-Corporation is rarely suitable for venture-backed startups due to strict ownership limits (max 100 U.S. shareholders and single class of stock)[3].

Startup lawyers recommend incorporating early – essentially before sharing IP, adding co-founders, or seeking funding – to establish clear ownership and liability protection[1]. Incorporation is straightforward: pick a state (often Delaware for startups), then file the required paperwork (Articles of Organization for an LLC or Certificate of Incorporation for a C-Corp) with the Secretary of State. Filing fees vary by state (typically $50–$500[4]) and often a registered agent fee (~$100/yr) is required. You will also obtain a free Employer Identification Number (EIN) from the IRS to identify your company for banking and taxes. After filing, draft your governance documents: an Operating Agreement (for an LLC) or Bylaws (for a C-Corp), and if you have co-founders, sign Founders’ Stock Purchase Agreements outlining each founder’s share and vesting[5]. For C-Corps, the initial board issues founder stock certificates under those agreements.

Practical tip: Use online formation services to streamline this process. Platforms like Stripe Atlas or Clerky automate filings, EIN issuance, and generate legal documents[6]. For example, Clerky’s startup package (Delaware C-Corp formation + documents) is about $819[7]. In general, budget roughly $500–$1,000 for properly incorporating your startup (including state fees and basic legal templates). If your situation is complex (multiple founders in different countries, etc.), consider having a startup attorney review or handle the paperwork.

2. Setting Up Banking and Accounting

Once incorporated, open a business bank account under the company name immediately. This preserves the legal separation between your personal finances and the company. U.S. banks (especially venture-friendly ones) typically require your EIN and formation documents to open an account[8]. Consider fintech banks tailored for startups – for example, Mercury, Brex, or Rho – which offer no monthly fees, easy online setup, and free domestic wires. (These are specifically designed for tech startups and often integrate with business tools[9].) Under no circumstances use personal accounts, Venmo, or PayPal for business transactions: commingling funds “pierces the corporate veil”, exposing founders to personal liability, complicating taxes, and undermining credibility[10][11].

For accounting, adopt a bookkeeping system early. You can use cloud tools like Xero, QuickBooks Online, or Zoho Books, possibly coupled with a managed service (e.g. Pilot, Bench or Bookkeeper.com) that syncs to your bank. Automate expense tracking and invoicing. Always record every business expense with a receipt, and categorize transactions consistently. At tax time, inaccurate records cause audits and lost deductions[12][11], so setting up clean books now is crucial.

Finally, hire a startup CPA or accountant. While you can do DIY bookkeeping, corporate tax filings (especially for C-Corps) are complex. A startup-savvy accountant (firms like Kruze Consulting, FounderCPA, or local startup-focused CPAs) can handle quarterly filings, payroll taxes, and annual returns correctly. C-Corporations face double taxation (corporate profit tax plus taxed dividends), so expert advice is warranted. A CPA will also help you collect documents for a future 409A valuation (see Section 6) and advise on structuring any founder or investor transactions.

3. Paying People Properly

When you start compensating anyone – co-founders, employees, or contractors – do it through formal payroll or contractor systems:

Employees (U.S.): Use a payroll provider like Gusto. Gusto will run payroll, withhold taxes, and automatically file W-2s for W-2 employees. (Gusto is highly rated and designed for small businesses.)
Contractors (U.S.): Also through Gusto (or alternatives like QuickBooks Payroll) so it tracks payments and generates 1099-NEC forms. Each U.S. contractor must complete a Form W-9 so you have their tax ID on file for year-end reporting.
International team: Use an “employer of record” service like Deel or Remote to legally hire/pay non-U.S. workers. They handle local compliance (issuing W-8BEN forms, local tax withholdings, etc.).
Co-founders and Friends: If co-founders or early helpers are receiving pay or reimbursements, treat them officially. Do not mix “founder sweat” with erratic payments; document any cash compensation or loans properly.

For equity, issue stock or options via proper agreements. Grant co-founders equity through Founder Stock Purchase Agreements with vesting (commonly a 4-year schedule with a 1-year cliff)[5][13]. Record all equity grants in a cap table tool (Carta, Pulley or Capshare)[14]. Use these same tools to track any SAFEs or convertible notes you issue (see Section 5). Ensure that all equity paperwork includes IP assignment clauses, and have every equity recipient sign an IP assignment agreement committing any work or inventions to the company[15].

Finally, formalize contractor relationships: every external developer or consultant should sign an Independent Contractor Agreement. This document clarifies deliverables, payment terms, and confirms independent-contractor status[16]. It should also include an NDA and IP assignment: without an IP assignment, your contractor might retain rights to the work product. (NDA stands for Non-Disclosure Agreement – use a Mutual NDA before discussing confidential ideas.) Likewise, have new employees and advisors sign employment/IP agreements and NDAs at hire to protect your technology and trade secrets from day one[16][15].

4. Signing Contracts

As you engage partners, contractors, and early customers, document everything in writing. Key contracts include:

Mutual NDA – Use this before sharing proprietary info with anyone outside your team. It protects your confidential information in preliminary discussions[16].
Independent Contractor Agreement – Formalizes work-for-hire relationships. It should specify scope, milestones, payment, and explicitly assign any IP the contractor creates to the company[16].
IP Assignment Agreement – Every co-founder, advisor, and contractor must sign an IP assignment. This ensures all code, designs or inventions automatically belong to the company[15].
Design Partner or Pilot Agreement – If working closely with an early customer (design partner), outline expectations: development collaboration, discounts, feedback loops, confidentiality, etc. Contracts with design partners create mutual commitments rather than vague promises[17].
SAFE or Investment Agreement – When taking money from investors (including design partners who invest), use the appropriate funding contract (e.g. a SAFE – see Section 5).
Customer Contracts (MSA/Order Form) – For any pilot or paying customer, sign a Master Services Agreement (MSA) plus an order form or subscription agreement. The MSA covers general terms (payment, service levels, liability caps) and the order form specifies the exact service, fees and duration. Use templates from a startup’s legal advisor or services like Clerky; do not sell on handshake or email terms alone.

Standard templates are available from startup resources and legal platforms. For example, up-to-date NDA, contractor, and IP assignment forms can be generated via tools like Clerky or Harvard’s CoLab. (We strongly recommend having an attorney review any template you rely on.) Contracts need to be customized to your situation, but these safeguards – NDAs, assignment clauses, and clear work agreements – are essential legal hygiene.

5. Fundraising — SAFEs and Design Partner Investors

If your early customers (design partners) want to invest in the company, use a SAFE (Simple Agreement for Future Equity). A SAFE is an “unpriced” convertible instrument: the investor gives you money now in exchange for the right to get stock later (typically in your next priced round)[18]. Because no valuation is set upfront, early SAFEs usually include a valuation cap and/or discount so investors get extra shares if your next round’s valuation is higher[19]. For example, a $100K SAFE might have a $5M cap and a 20% discount.

SAFEs (and convertible notes) were pioneered by Y Combinator for seed-stage startups. They do not accrue interest or have a maturity date[20], making them simpler than debt. (The SAFE just converts to preferred stock at the agreed terms when a qualifying round happens.) To execute SAFEs, use a clean template (there are widely used ones, e.g. the YC SAFE), then have each investor sign it and wire the funds. You can manage SAFEs through platforms like Carta or even Clerky, which handles issuance and signature tracking.

Important: Keep roles distinct. If a design partner is also investing, use two documents: one for the design partnership (feedback/development) and one for the investment (SAFE). Do not promise additional product discounts or equity outside normal terms without thinking it through – you want to treat investors equitably. All SAFE investors should have the same cap/discount terms unless there is a strategic reason for an exception.

6. Hiring and Equity

As your team grows beyond the founders, use the same formalities:

Hiring Payroll: For full-time employees in the U.S., process payroll through Gusto (or an equivalent payroll provider). They will handle W-2 tax filings, benefits administration, and statutory withholdings. Never treat U.S. full-time employees as 1099 contractors – misclassification can lead to tax penalties. For international hires or fractional help, use Deel or similar to ensure compliance with foreign labor laws.
409A Valuation: Before granting any employee stock options, obtain a 409A valuation from a qualified firm. U.S. tax law requires you to set the strike price at fair market value (the 409A) of your common stock. In practice, companies do a 409A appraisal right after a priced financing round or when they have significant milestones. By law it must be updated at least annually or upon major changes (like a new funding round)[21]. This protects employees from unexpected tax liabilities.
Stock Option Plan: Establish an employee stock plan (typically 10-20% of equity set aside). Issue options under a standard schedule: 4 years total with a 1-year cliff. This means nothing vests until one year, then 25% vests at 12 months, and the remainder vests monthly (or quarterly) over the next 3 years[13]. This “4+1” model is market standard to incentivize employees over time. Use your cap table software (Carta/Pulley) to grant and manage all options.
Founder Vesting and Agreements: Ensure founders’ equity vests too (if not already) to motivate long-term commitment. Use formal Founder Stock Purchase Agreements with vesting clauses[5]. These should include an 83(b) election clause so founders pre-pay taxes on future income value. All equity grants – for founders, employees, or advisors – should be issued through your cap table system to maintain clear records[14].

7. B2B Go-To-Market and Marketing

For enterprise or B2B SaaS, your early customers can double as “co-builders.” Treat design partners as product collaborators: give them free or heavily discounted access in exchange for deep feedback, referenceable case studies, and a structured buy-in schedule[22]. Enter each design partnership with clear contracts and regular check-ins; this helps iterate your product quickly and builds advocacy. (A handshake or informal promise is risky — you’ll want written agreements as noted above.)

When you start charging, base pricing on value and ROI. Enterprise buyers care about the business impact (e.g. “This saves you $X per user per year” or “increases your efficiency by Y%”). Pilot or trial pricing can be low initially, with a roadmap to a higher standard price in a year. Always document the transition to paid terms in your contract.

B2B sales channels include direct outreach (LinkedIn networking, targeted email sequences), attending industry events/webinars, and leveraging referrals or partnerships (e.g. resellers, VCs’ portfolio introductions). Marketing tools recommended for startups include a lightweight CRM (HubSpot’s free tier is popular) and email campaign software (Mailchimp or Customer.io). Use analytics platforms like PostHog or Mixpanel to instrument usage and funnel metrics on your site and product. Your website itself can be built on an easy CMS (Webflow or Framer) to allow quick updates without engineering cycles.

As you pilot customers, gather testimonials and case studies to use in sales and marketing. Each closed deal, even if initially at a discount, should be invoiced through your system (Stripe or a bookkeeping system like Bill.com) to start building financial and usage metrics.

8. Other Legal and Compliance To-Dos

Beyond formation and contracts, remember these critical items:

IP Assignment for All Contributors: Enforce that any co-founder, developer or contractor signs an Invention Assignment Agreement. This is non-negotiable because investors and acquirers will insist on proof that all IP was formally assigned to the company[15].
Website Policies: If you have a website or app, publish a Terms of Service and Privacy Policy. These govern user behavior and disclose how you handle data[23]. Many startups use generators like Termly or Iubenda to create compliant policies (especially if you have users in the EU or California, which have strict privacy laws). Even if not legally required, having clear terms protects against liability and builds user trust.
Business Insurance: As you start engaging customers, obtain appropriate insurance. At minimum, get General Liability Insurance to cover accidents or customer injuries (e.g. a visitor trips at your office)[24]. If you provide a professional service/product, add Errors & Omissions (Professional Liability) Insurance, which covers client losses from software errors or missed deliverables[25]. Additionally, once you have a board or investors, Directors & Officers (D&O) Insurance is recommended to protect company leaders against lawsuits alleging mismanagement[26].
State Compliance: If your company will do business outside its incorporation state, register it as a foreign entity there. For example, a Delaware C-Corp with an office in New York must register with New York State and may pay state taxes there. Failing to register can lead to penalties or inability to enforce contracts.
Annual Filings: Finally, maintain corporate hygiene. File your annual report and franchise tax on time in your incorporation state (Delaware requires this by March 1 each year). Hold yearly board/shareholder meetings and record minutes. Staying current on filings preserves limited liability and avoids fines during fundraising or exit.

9. Tooling Stack

The right tools make everything easier. Below is a non-exhaustive list of recommended platforms:

Purpose	Recommended Tools
Company Formation	Stripe Atlas, Clerky, Firstbase
Business Banking	Mercury, Brex, Rho
Accounting/Bookkeeping	Pilot, Bench, Xero, QuickBooks
Cap Table & Equity	Carta, Pulley
HR/Payroll	Gusto (US), Deel (Global)
Legal Docs & Agreements	Clerky, CommonPaper templates, Carta legal docs
CRM/Marketing	HubSpot CRM, Mailchimp, Customer.io
Product Analytics	PostHog (open-source), Mixpanel
Web/Dev	Webflow or Framer (website builders)
Fundraising Docs	Y Combinator SAFE templates, Clerky for signature

(Note: These are examples; evaluate what fits your needs.)

10. Operating Roadmap (First 90 Days)

Week	Key Tasks
1–2	Incorporate (e.g. file Delaware C-Corp), obtain EIN; open business bank account; draft and sign founders’ stock agreements.
3–4	Set up accounting and payroll (Gusto), launch bookkeeping system; establish cap table (Carta) and option pool; prepare legal templates (NDA, contractor agreement).
5–6	Finalize design partner contracts; run initial pilots with value-based pricing; collect feedback; integrate metrics tracking.
7–8	If raising funds, issue SAFEs with interested investors; start formal marketing outreach (LinkedIn/email); develop marketing collateral (pitch deck, case studies).
9–12	Close pilot customers and convert to paid (invoice via Stripe or accounting system); report monthly metrics (MRR, churn, burn); refine growth plan.

By completing these steps, you’ll transform “just a product” into a legally compliant, scalable business entity ready for growth. Each element – from incorporation to contract templates to billing – builds credibility with investors, partners, and customers. A CEO with 40 years’ experience will recognize that this operational discipline is what separates a hobby from a high-growth startup.

Sources: Authoritative startup and legal guides were used to compile this plan[1][2][3][8][10][9][16][15][17][18][19][21][13][24][25][26]. Each recommendation is grounded in current U.S. startup best practices.