Top FAQs for Tech Startups

Despite the huge amount of tech startups that get launched every year, it is still a daunting task to get one off the ground. Success is never guaranteed and the general advice is always to start small and build up gradually. 

Here are some of the most frequently asked questions founders will have when contemplating their tech startup.

Do I Need To Have A Business Plan?

​Yes, of course! Even if your tech startup was once a side project that you worked quietly on in your spare time, it is vital to have a business plan. You may think you have a great idea, but given the sheer number of tech startups springing up all the time, you need to map out where you want to go.

A solid business plan is key to attracting potential investors beyond supportive friends and family who helped you get started. Investors will want to know that you have a clear idea of how you want to grow your business year over year. They’ll also be looking for any structural deficiencies which may hinder the development of your start-up.

As part of your business plan, you also need to factor in a worst-case scenario. Many tech start-ups involve a group of like-minded people and although you may feel passionate about the project, it’s a good idea to have an exit strategy.

Should I Take Money From Friends And Family For The Initial Capital Raise?

In most cases, aspiring tech entrepreneurs have very little choice but to rely on the people closest to them. In many ways, it makes sense. You need to raise a significant amount of capital in the space of a few months and even if a bank or angel investor believes you have the greatest idea on earth, they aren’t going to part with funds that quickly or easily.

While an investment round from friends and family is often essential to getting things off the ground, it does come with its difficulties which could lead to problems down the line. Therefore, if you are able to “bootstrap” and self-fund the startup, that’s certainly a possible route to success. What is critical is the allotment of the capital for the venture that is reasonable, and feasible to the business plan you’ve outlined.

It’s also important to set the legal parameters from the outset, which can be difficult with people you share an emotional bond with. Nevertheless, it is vital that when you are effectively selling a share of your company, you and the founder, be it a family member or friend, should know about the risk and liability which comes with it.

Who Should Form My Core Business Team?

Technology startups typically don’t have enough money to employ accountants, lawyers, and/or tax advisers, so you may have to rely on friends and family. You may be lucky to have someone close to you who has some business experience and you should certainly try and rely on their expertise as much as possible. 

Tech startups are usually the brainchild of people with a passion for the business solution in question. Knowledge with regard to computing and software can be supplemented with a strong Technical Partner such as DivNotes. It is possible to hire a fraction or virtual Chief Technical Officer (CTO) via a partnership with a technical agency. One thing is certain, gathering as much free and valuable expertise as you can at the start and throughout your venture’s journey is always welcomed and encouraged.

How Do I Establish And Protect My Company?

The first thing you need to do is consult with a lawyer. You may wish to consider patenting some of your ideas or filing trademarks and copyright through a legal service professional. This can protect you if you believe your idea is particularly unique and needs to be protected. Tech startups don’t have much clout or power, but protecting your idea at the outset can be very beneficial in the long run. It’s best to consult a specialist in these matters and discuss your copyright risk with a lawyer.

The second thing you might be interested in doing is purchasing a web domain to protect your idea and brand. These domains are relatively inexpensive but may have to be renewed periodically. You may have to strike a balance between what your domain is and what is available to you. This is important from a marketing point of view. It can harm your brand if you keep skipping between different domain names, so make sure to settle on one you are happy with as it could be with you for a long time.

How Do I Work Out What I Want And How Do I Get It?

To find out what you want from your tech startup, you need to first establish a list of features and lay the groundwork for your project’s build requirements. This is when you will need to consult with an agency about your requirements and work out what is feasible. What you start off wanting may not be possible to implement initially.

As resources are limited for a startup, the primary focus should be on delivering an “MVP” or Minimum Viable Product. This will be what you bring to market and getting there involves looking at what minimum requirements are necessary to launch. You can gradually build on this over time and as you get more resources, you will most likely discover more information obtained from the feedback from your users. In a future iteration, you can then apply the newly obtained information and adapt or innovate on top of your platform in accordance with your product roadmap strategy.

Getting an MVP ready for launch involves looking at design wireframes for your website and choosing the right tools or stack that will fit your requirements.

Speak to a DivNotes representative today and let’s build your project’s strategic roadmap plan together!