After the “who” of the “First who, then what”, let’s have a look at the “what” ;-) And let’s start with what I would like to call the “prerequisites”
Prerequisites
The prerequisites are quite “simple”! You have a business and the right people to address it ;-)
In other words: you have a business plan with clear ideas about:
- the status quo (current situation where you are in the founding, acquisition from customers, productizing, financing, etc.)
- you product and services
- the market you would like to address
- the competitors (no competitor, no market)
- marketing and sales
- administration & organization
- productizing
- management
- risk analysis
- finances
At the end, all this should be translated in a clear “values, vision, mission, industry and markets targeted, capabilities”.
As others, I like to speak about differentiation and customers’ pains, as from product positioning.
The best is still to confront your perception of the market with…the market itself! And to correct, iterate, improve, learn, make failures, learn, improve, etc.
We had the chance to start with a big customer contract with a well-known and established company, for quite a long duration. On top, we had also a huge asset, the IP (Intellectual Property) of our software product, coming from a 7 years development and big former investment.
Founding
Pfffuu, not so easy. Quite a lot of steps to do, and the first steps are extremely important!
- First you need to fix the name of the company. The name is representing your new venture. It is central for your identity, your marketing and communication future activities. If you have already tried to find a name for a product or a company, you should know that it is very difficult to find a name which is not already used or reserved. As everybody, you then try to combine names, to use Latin or Greek names, etc. We were lucky because after a lot of tries, Nick found the name INNOVEO. At this time, 34 results on Google! And no company registered in Switzerland under this name. Furthermore, Innoveo is a great combination between INNOvation and VEO which means “to see” in Latin. At the end, we decided also to add “Solutions” to our company name because we are delivering software solutions. The domain-name was already reserved. So we had to buy the different main domains (for “innoveo”) and to transfer them. The name is also usable internationally and doesn’t seem to mean something in another language.
- For the office location, it was clear that we wanted to stay in the Zurich/Switzerland area. As we are coming from different places, Zurich remains central and very attractive for hiring A-level international employees. Zurich is designated since years as one of the best place to live. On top, Zurich is a well-know financial place internationally. Concerning the office itself, we wanted to stay near a train-station. The building we were in before was ok. So after having evaluating other opportunities, we decided not to move.
- Our Team was fully integrated in the evaluation and decision process for the choice of the name, as for the office location.
- So, you have the name and the location, you need to choose the form of the company. This is also impacting a lot your venture! Accounting, Corporate Governance, legal obligations, etc. are very depending from this form. We mainly had two possibilities: “GmbH” (limited liability) or AG (Incorporated). As we have started with more than 14 people and we have very big companies as customers, it was quite clear that we need an “AG” form (incorporated). As for liabilities reasons (we deliver a software product).
- Then you need to work on the statutes of the company.
- You have to structure and define your Board of Directors. It was clear that Nick and myself will be members of the Board of Directors. We wanted to enlarge our Board with two external members, very qualified and experienced in different fields: strategic management, sales, software product marketing, product positioning, accompanying start-ups in their development, etc. We had the chance to be able to gain Bruno and Pancho. The organization of the regulations between the Shareholders’ Assembly, the Board of Directors and the Executive Management of the company should be also fixed and documented.
- Ok, then you need to find the shareholders, to define the level of equity requested, the investment of each shareholder, and to define the Shareholders’ Agreement.
- In the statutes, you have also to determine the signature rights of the Board and of the Management, and to authenticate them by a trustee.
- At this point, you have also to open a corporate bank account, to be able to transfer the capital … and pay your first bills due to the founding process ;-)
- The statutes, name and form of the company, office location, member of the Board of Directors, level of Equity, and the signature rights have to be registered (and partly published) at the Commercial Register.
- For all these steps, you need absolutely the support of a attorney at law and a trustee. And, it is not the last time that you will need them ;-) We are working with Peter Neuenschwander (attorney) and Oliver Götz (trustee). since more than 18 months now. These two persons are extremely important for our company.
- A picture below taken from the office of the notary in Walliseller – Switzerland, where Innoveo Solutions was founded on Monday, June 25, 2007 (Nick, Lorenz, Philippe and myself).
That is, more or less (I have surely forgotten some stuff!), the founding process. At the same time, you need to define quite a lot of administrative processes. These, for the next post!
