Concept Stage – Startup Funding Life Cycle

Starting a business begins with an idea. It must focus on solving a problem in the market. At the concept stage, you have an idea and are exploring the feasibility of building a product or service based on that idea. Once you have a basic concept, the focus is on determining whether it solves a meaningful problem and whether there anyone would theoretically be interested in the solution. Your idea should reduce someone else’s pain or give them a of concrete benefit or improvement over the existing situation. You will also need to determine how you will build the product or deliver the service, and to identify the target customers, partners, distributors and competitors in your market. Along the way you must refine and develop the product. The more data you collect, the better your analysis, the more refined your idea, the greater the likelihood of success. You must validate the market and potential demand for your product, particularly whether they will pay for the solution. Once you have your idea refined, you can begin to think about organizing a business.

Patents are exclusive rights provided to inventors of innovative new, useful, non-obvious machines, processes, industrial designs, articles of manufacture or compositions of matter.  Patent protection typically includes provisions of these exclusive rights for a specified period of time, related specifically to the invention.

Trademarks, like patents, provide the holder exclusive rights.  They protect signs, designs and expressions which identify properties of a company’s products and services.   When the sign, design or expression identifies a company’s services, it is known as a service mark.

Patents and trademarks are both forms of intellectual property.

Background Information

Patents

Sovereign nations typically grant patents to inventors or their assignees for a specified period of time in exchange for the inventor providing a detailed disclosure to the public.  Generally, patent protection is available for a minimum of twenty years.  However, the duration of exclusive rights related to usage of patented intellectual property does vary by country. Typically, under the rights granted, third parties are prohibited from commercially producing, selling, using or distributing a patented invention without their having obtained specific rights to do so.  In the United States, individual inventors must apply for patents but the patent may ultimately be assigned to corporate entities.  Outside the United States, it is more typical for patent applications to be filed by either individuals or corporate entities.  Typically, a formal written application to the nation’s patent office is required and the concept is reviewed by a patent examiner to insure it qualifies and that there are no precedents to the concepts under consideration.

If a patent is infringed upon, the holder must generally enforce their rights through the legal system.  Typically, monetary compensation is sought as a remedy to the infringement.  In some cases injunctions prohibiting future acts of infringement are also pursued.

Trademarks

Trademarks and Service marks are utilized to claim exclusive properties of products and services by the owner.  Like patents, trademark use can be based on both ownership and license agreement.  In some jurisdictions, trademark rights can be established through use in the marketplace or by registration through the trademark office or similar jurisdiction.  However, some only recognize registration as the appropriate process.   Rights typically expire if trademarks are not actively utilized over time.

Trademark infringement can result from intentional acts or occur unintentionally.  However, intentional infringement typically results in greater damages to the infringing party.

Resources

IP Australia: IP Australia is the Australian agency that administers intellectual property rights and related legislation associated with patents, trademarks and designs.

Canadian Intellectual Property Office: The Canadian Intellectual Property Office is the Canadian agency which grants Canadian patents and registers trademarks.

European Patent Organisation, (EPO): The European Patent Organisation is an intergovernmental organization established in 1977 based upon the European Patent Convention signed in Munich, Germany in 1973.

Office for Harmonization in the Internal Market, (OHIM): The Office for Harmonization in the Internal Market is the European Agency responsible for managing creativity and innovation in the community trade mark and the registered community design offices.

United States Patent and Trademark Office, (USPTO): The United States Patent and Trademark Office is the Federal Agency which grants U.S. Patents and registers trademarks.

Small businesses are subject to a significant number of regulatory requirements. The Federal government does control some items, but individual states are the primary regulatory entities when it comes to organizing and controlling small business. They establish approved organizational structures, licensing requirements and tax policy. State agencies also interpret and implement Federal statues like environmental regulations.

Areas covered by Legal or Regulatory Requirements:

Advertising laws: Generally these are covered by both State and Federal consumer protection laws. You need to be truthful and not misleading in your advertising efforts. They generally apply regardless of the advertising medium whether print, on billboards or over the Internet. There are also laws concerning online marketing such as spamming, telemarketing laws, and what you can and can’t say on a product label.

This link gives an overview of compliance concerns.

Employment and labor laws: There are a wide range of Federal, State and even local laws pertaining to employee rights such as discrimination and harassment, termination, safe and drug-free work environments, benefits, and wages. Of particular note to small business is the distinctions between salaried and hourly employee classifications as well as rules for subcontractors.

This link gives a summary of Federal Department of Labor Laws.

Finance law: Finance laws require businesses to follow certain guidelines when it comes to antitrust regulations, bankruptcy, and securities.

This link gives an overview of compliance concerns.

Intellectual property: These laws protect trademark, patent, or trade secrets. Learn the correct procedures to take to safeguard your company’s property.

This link gives an overview of the issues involved and has links to give more in-depth information.

Online business law: Now that almost every business is online, companies needs to be in compliance with laws dealing with online privacy, security, copyright, and taxation issues.

This link gives an overview of compliance concerns.

This link addresses the issue of on-line sales and sales tax.

Environment: The Environmental Protection Agency (EPA) and your state government have very specific laws when it comes to regulating the impact of business on the environment. Depending on the area of business, companies must deal with disposal of toxic materials, your responsibilities for air pollution control, and more.

This link gives an overview of compliance concerns.

Privacy laws: The government (and your customers) want to know you’re doing everything you can to protect the personal information your business obtains.

This link gives an overview of compliance concerns.

Foreign workers, immigration, and employee eligibility: Immigration status is now an important consideration when hiring employees. Companies must vet employees for legal status.

This link gives information on the top immigration law issues that affect business.

Workplace safety and health: These laws protect employees from a multitude of hazardous work environments. The fines for failing to comply with these laws can be substantial and ignorance of the law is not excuse.  The Occupational Safety and Health Administration (OSHA) has many outreach programs in place to help small business owners comply with workplace safety regulations.

This link gives an overview of business OSHA compliance concerns.

Disclaimer: The content presented on this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

WEBSITES – SMALL BUSINESS REGULATION

General Business Regulation:

The SBA has a good introduction and reference to General Business Law and Regulations.

State Regulations

State laws, taxes and licensing regimes vary widely.

This link to a July 2014 article in the Economist magazine gives a brief description of the issues involved in small business regulation and has an interesting tool that gives an overall ranking for each state’s environment for small business and a rating for Taxes, Regulations and Licensing requirements.

General information about State Business Laws and Regulations:

  1. Link to every State’s Listing of Laws. May require searching through several levels of links, but is very comprehensive.
  2. Information about specific Business Law in each State.

The SBA has a number of searchable data bases that allow you to reference State regulations, permitting and licensing. Useful links:

  1. State Licenses and Permits
  2. State Tax Obligations
  3. State Business Registration

Links to State Resources

The following links give a more in-depth information about State Regulations, Permit and License Requirements, and Business Taxes. Below is listing of links to each state’s websites.:

  1. Alabama
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  2. Alaska
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  3. Arizona
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  4. Arkansas
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  5. California
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  6. Colorado
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  7. Connecticut
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  8. Delaware
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  9. Florida
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  10. Georgia
    1. Business Portal
    2. Licenses and Permits
    3. Tax
  11. Hawaii
    1. Business Portal
    2. Registration and Fees
    3. Business Taxes
  12. Idaho
    1. Business Portal-Search Wizard
    2. Licenses and Permits
    3. Taxes
  13. Illinois
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  14. Indiana
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  15. Iowa
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  16. Kansas
    1. Business Portal *This site provides links to assist in organizing, registering and compliance for small businesses.
    2. Licenses and Permits
    3. Taxes
  17. Kentucky
    1. Business Portal-“One Stop” Center
    2. Licenses and Permits
    3. Taxes
  18. Louisiana
    1. Business Portal
    2. Licensing and Fees
    3. Tax
  19.  Maine
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  20.  Maryland
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  21.  Massachusetts
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  22.  Michigan
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  23.  Minnesota
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  24.  Mississippi
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  25.  Missouri
    1. Business Portal
    2. Code of State Regulations
    3. Taxes
  26.  Montana
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  27.  Nebraska
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  28.  Nevada
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  29. New Hampshire
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  30. New Jersey
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  31. New Mexico
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  32. New York
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  33. North Carolina
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  34. North Dakota
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  35.  Ohio
    1. Licenses, Permits, and Inspections
    2. Regulations and Labor Laws
    3. Filings and Payments
  36.  Oklahoma
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  37.  Oregon
    1. Business Portal-Business Wizard
    2. Licenses and Permits
    3. Taxes
  38.  Pennsylvania
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  39. Rhode Island
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  40. South Carolina
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  41. South Dakota
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
    4. Business Tax Forms
  42.  Tennessee
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  43.  Texas
    1. Business Portal
    2. Licenses and Permits
    3. Sales Tax
    4. Employment Taxes
  44.  Utah
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  45.  Vermont
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  46.  Virginia
    1. Business Portal – “OneStop” Service Center
    2. Licenses and Permits
    3. Taxes
  47. Washington (state)
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  48. West Virginia
    1. Business Portal
    2. Licensing and Permits
    3. Taxes
  49.  Wisconsin
    1. Business Portal
    2. License and Permits
    3. Tax
  50.  Wyoming
    1. Business Portal
    2. Licenses and Permits
    3. Taxes
  51. Washington, District of Colombia
    1. Business Portal
    2. Licenses and Permits
    3. Tax

OTHER RESOURCES:

FEDERAL GOVERNMENT

  1. Federal Government Regulation: Search for small business – can refine for specific category or functional area
  2. Small Business Administration (SBA):
    1. Small Business Resource Listing
    2. Business Law and Regulation
    3. Business Guides by Industry/Sector
    4. Code for Regulations (CFR) The Code of Federal Regulations *(CFR) is the codification of the general and permanent rules published in the Federal Register.
  3. Office of Information and Regulatory Affairs: *This website give information about regulations that are under review or pending by Federal Government Executive Agencies.
    1. Actions Currently under Review
  4. Occupational Safety & Health Administration
    1. Small Business Site

TRADE ORGANIZATIONS:

  1. National Federation of Independent Businesses
    1. Sensible Regulations for Small Business: *Overview of quick facts
    2. Regulatory News Letter: *Discusses new and pending regulations
  2. National Association for the Self-Employed: *This site includes discussion of the regulatory environment and the impact on Small Business.
  3. U.S. Chamber of Commerce: *This site includes discussion of the regulatory environment and the impact on Small Business.

WEB SITES:

  1. NOLO – Law for All Website
    1. NOLO – Small Business Legal Requirements: *Comprehensive listing of legal requirements for Small Business as well as other legal issues that might be of use.
    2. NOLO – State Start-up Requirements for Small Business
    3. NOLO – Federal Start-up Requirements for Small Business
    4. NOLO – Small Business Resource Page: *Has many business/start-up software offerings
  2. SmallBusiness.com: *This website has a series of articles related to small business. While this is a valuable resource, it is not very friendly and lacks a good search tool.

MAGAZINE ARTICLES:

  1. Money Magazine:
    1. Stealth IRS changes mean millions of new tax forms
    2. Healthcare Law’s Massive Hidden Tax Change
  2. Entrepreneur Magazine:
    1. Listing of articles on Regulation
  3. Forbes Magazine:
    1. Small Business Regulations Surge under Obama
  4. The Economist Magazine:
    1. Small Businesses Fret Less…: *This gives a brief description of the issues involved in small business regulation and has an interesting tool that gives an overall ranking for each state’s regulatory/tax environment for small business

VIDEOS:

  1. Videos of State Regulations

Accelerators, also known as seed accelerators for startup purposes, are organizations which support seed and early stage startups through a formal, defined mentoring program from experts with experience across the functional and startup spectrum.    Typically organized as cohort-based programs, lasting twelve to sixteen weeks, the programs culminate in a public pitch event or demo day presentation to investors.    Following are additional information, resources  and tools, related to these programs. 

Background Information

Accelerators provide highly defined cohort programs, (classes) for entrepreneurs and startups.  The programs typically last twelve to sixteen weeks, although the duration may vary.  They generally occur on-site, at locations provided by the accelerator and include continuing mentorship during the program related to the startup of scalable companies by multiple experienced mentors who have been trained specifically for this purpose.

Most accelerators require attendees to be on-site and a few require the attendees to relocate their companies to the region in order to be accepted in the program.  Most require a full time effort by the entrepreneurial teams, which is the focus as opposed to the individual entrepreneur.

In addition to the mentorship and guidance provided, which are designed to address all the key issues from identification of the idea or concept, to building a prototype, conducting market surveys / tests / validating the market, building teams, creating and documenting the company infrastructure and ultimately  obtaining third party financing, accelerators generally provide multiple other resources including:

  • Startup stipends which range from $10K – $100K, depending on the accelerator
  • Office space for the startup during the program
  • Special events and / or dinners with guest speakers
  • Occasional entertainment events
  • Specified professional services from accounting, legal, marketing and other professionals are provided to participants free of charge by some accelerators and their professional partners
  • Free access for defined periods to select web-hosting, software and SAAS tools supporting the development, growth and operations of the startup
  • A few accelerators provide housing for the cohort participants but this is usually the exception
  • Post Demo-day mentoring

The culminating event is usually a Demo-day in which the entrepreneurs pitch their companies to the public and investors such as angel and VC groups.

The value of the process for the entrepreneur, in addition to those referenced above include a network of connections, the experience of participating in the cohort with peer companies from which they can learn and recognition for having been chosen and participated in the program.

It is not typical for entrepreneurs or startups to be charged fees for these programs.  Instead, the accelerators typically require equity in the startup, ranging from 6% – 10% depending on the accelerator.

Resources 

Accelerator Assembly:  A European based industry led network that connects accelerators, entrepreneurs and policy makers to strengthen the support afforded to internet based startups on the continent.

Business Innovation & Incubation AustraliaBusiness Innovation & Incubation Australia, (BIIA) is an association of Australian business incubators which sets the practice standards for the incubator industry in Australia.

Canadian Association of Business IncubationThe Canadian Association of Business Incubation, (CABI) is a Canadian association dedicated to supporting the growth of new and early-stage businesses in Canada.  Their mission is “to advance the success of business incubators and accelerators across Canada while enhancing the knowledge and skills of incubator and accelerator professionals and promoting a better understanding of business incubation/ acceleration’s role in economic development.” 

National Business Incubation AssociationThe National Business Incubation Association, (NBIA) was established to advance business incubation and entrepreneurship in the United States.  It is a provider of information, education, advocacy and networking resources to its members and partners to bring excellence to the process of assisting early stage companies.

Accelerator Listing

500 Startups

Accelerate Baltimore

Accelerprise

AccelNow

AgLaunch

AlphaLab

Arizona Furnace

autoxlr8r

Betaspring

Bisite Accelerator

Bizdom Cleveland

Bizdom Detroit

Blue Startups

Blueprint Health

Boom Startup

Capital Factory

Capital Innovators

Cherokee McDonough Challenge

Co Lab Gig Tank

Collider

Coolhouse Labs

Dream It Ventures

Spending Valuable Time Researching Which Accelerator to Attend?  Streamline the Effort with our Accelerator Search Tool!

Elmspring Accelerator

Entrepreneurs Roundtable

Excelerate Labs

Fintech Innovation Lab

FlashStarts

Fledge

FounderFuel

gener8tor

Groundwork Labs

Hatch

Health Wildcatters

Healthbox

Healthbox Studios

Imagine K12

Impact Engine

Jaarvis Accelerator

Jumpstart foundry

Knoxville Entrepreneur Center

Launch Chapel Hill

LaunchPad LA

Lightspeed Innovations

MuckerLab

FundingSage’s Startup Accelerator Spotlight Series features interviews with managers of accelerator from around the world.  Check it out now!

NEST’up

NYC Seedstart

Orion Startups

Oxygen

Portland Incubator Experiment

Portland Seed Fund

Project Music

Prosper Women Entrepreneurs

RetailXelerator

RevTech Labs

Rock Health

SaltMines Group

Seamless Accelerator

Is Your Startup Investable?  Take Our Investability Test and Find Out.

Seed Hatchery

SeedSumo

SEKLAB

Sparkgap

Start Co.

Startfast Accelerator

StartPlanetNI

Startup Chilie

Startup Health

Startup Studio Monterrey

Startup Yard

Straight Shot

Surge Accelerator

Swiss Startup Factory

Tech Ranch

Tech Wildcatters

TechStars

Telluride Venture Accelerator

TETUAN VALLEY

The ARK Challenge

The Biz Foundry

The Brandery

The Hive

The Idea Village

The Startup Factory

Thrive AgTech

UpTech, Inc.

VentureHive

XLerateHealth

Y Combinator

Zeroto510

 

Many of these accelerators are spotlighted on our FundingSage Startup Accelerator Spotlight.  Learn more about your favorite accelerator there!

 

Tools

Entrepreneurs spend far too much time researching options and far too little time with the decisions related to building and growing their companies.    The Find My Accelerator Search Tool developed by the Sages permits you to utilize our research and algorithms resulting in a substantial reduction in your valuable personal time.  Freed from the chains of research, you, the entrepreneur are able to expend greater time and a higher level of focus on issues directly related to your company’s development.

Go to Find My Accelerator now and preserve your time for more productive efforts.  It’s FREE so you have nothing to lose.

Is Your Startup Investable?  Take Our Investability Test and Find Out.

 

The Small Business Administration (SBA) site is a comprehensive source for information on starting and operating a small business. However, it can be difficult to navigate. There are multiple links that seem to address the same issue, but don’t always take you where you need to go. You could spend hours looking through this site, some productive, some wasteful.

Resources

SBA FINANCING:

Here are some useful links if you are looking at SBA Loan financing:

  • Information Site*This site gives a brief outline of different financing options. It is very general and does not give detailed information or useful links to specific financing options.
  • SBA Loan Site: *This is a useful site for understanding SBA Loan Programs. It is just a broad overview. The link below is much more helpful in understanding the specifics of the loan programs.
  • SBA Loan Programs: *This is an extremely useful site for understanding SBA Loans. It gives links to the different loan programs. These pages explain how the loans work, give eligibility criteria, fees, rates and terms.

Loan Checklists:

  • Business Loan Checklist: *This link provides general information about the documentation needed to apply for Small Business Loan Applications. It is applicable to other traditional loan applications as well. It is general in nature and does not really assist in the actual preparation of the documentation.
  • SBA Loan Application Checklist: *This link is a specific checklist for filling out the General 7(a) Loan Application. It includes links to several other required pieces of documentation needed.

SBA Lending Information:

  • Lender Documentation Tool: *On this page, you identify the type of loan you want and it will identify the documentation you will need and provides links to those documents. For the “do it yourselfer,” this is a pretty useful site.
  • Find an SBA Lender: *The Small Business Administration does actually lend money. The program is administered through commercial banks in your area. This is a link to the SBA search engine that may assist in finding a lender in your area.
  • Top SBA Lenders: *This link shows you the top 100 most active SBA 7(a) lenders in the country.

Be sure to talk with your local banks to see if they are an SBA lender. They will be able to give you specific information about your local options.