David Colligan is a founding partner of Colligan Law, LLP, which helps high growth start-ups form entities, organize the founders, and develop pitches for venture capital and angel investors. They also represent starts-ups in the investment of those funds and through an exit or merger where the founders make money.
(Photo courtesy of David Colligan)
Colligan Law’s considerable experience is in representing high growth start-up companies. These entrepreneurs could be digital software app companies, high-tech solutions or new inventions or concepts like Google or Uber. For these companies to grow, they need outside capital, which comes from angel investors and venture capitalists. Colligan’s firm facilitates those meetings. The goal is for a company to have a successful exit where both founders and the investors make a significant return on their investment.
This niche is different from traditional lifestyle businesses that usually grow much slower. These businesses do not need outside capital to grow. These entrepreneurs reinvest profit into the business if and when they make it in order to grow the business. Examples would be a restaurant, a family-owned business and auto repair shop.
New businesses should consider the following:
- High growth start-up entrepreneurs should think of the choice of entity and where it should be formed. Should it be founded in Delaware, even if the business itself operates in another state?
- Should the founders have an agreement among themselves? Many start-ups are done on a handshake, but Colligan recommends getting it in writing.
- Colligan recommends the founders participate in entrepreneurial programs that accelerate the development of the company.
- Negotiating a fair deal between the founders and the investors is an important part of keeping the founders motivated and on task.
- The goal is an exit, but many serial entrepreneurs have found that out of failure, success follows, and sometimes a second or third try turns out to be the big winner.
This article was written by Robin D. Everson for Small Business Pulse