While most SaaS startups are focused on raising funds and optimizing growth, there’s an equally important area that many entrepreneurs often overlook: choosing key professional service providers. Choosing the right people and understanding the value they bring can make a huge difference to your company.
After all, it’s not just employees and investors that help guide and grow your company. There are also lawyers, bankers, accountants, and human resource professionals. All of these people do more than just provide a necessary service; in actuality, they serve more like informal partners, providing guidance, connections, and support. Teaming up with the right professionals can have a huge impact on your long-term success.
Here are the four providers you need to survive—and thrive—as an early-stage SaaS startup.
Legal help is invaluable in navigating these common issues that startups face.
When you’re incorporating
How you structure your business will have important tax, investment, and financial implications going forward. Getting legal advice about these decisions will help you make the right choice for your company—and ensure that you get the details of the complex paperwork right.
Protecting your Intellectual Property
Without a proper Intellectual Property strategy, you may fail to protect your own hard-earned developments—or inadvertently infringe on someone else’s. Either way, it’s a huge mistake. Instead of simply relying on NDAs and boilerplate templates you download online, seek appropriate legal assistance. A good IP lawyer can help you file patents, register trademarks, and develop meaningful documentation to protect your most valuable assets.
Raising investment money
Although it seems that a DIY approach to negotiating investor term sheets or drafts convertible notes would be a cost savings, you risk missing something that could be far more costly to you and your company later on. A good investment lawyer, especially one who is experienced with startup fundraising in a high-growth environment, can help ensure that your convertible debt and equity terms with investors are clear—and fair to everyone.
Banks are often overlooked as a source of assistance for early-stage startups. But that mistake downplays the value that a savvy banker can bring, particularly when they have experience working with early-stage SaaS startups. Building a relationship with a trusted banker can help you now, since every business needs basic banking services. And by focusing on these relationships early, you can increase your chances of getting help down the road with:
Introductions to potential investors
A banker who’s familiar with the startup world can connect you with potential investors—and it never hurts to widen your circle of contacts as you seek new sources of funds.
Cultivating a relationship with a banker now, before you’re ready for debt financing, can help pave the way for future A/R lines of credit later on.
Early-stage startups typically lack the need—and the funds—for a CFO. However, this doesn’t mean you don’t need financial guidance. Bookkeeping still needs to get done, taxes need to be filed, and proper financial records and projections need to be prepared. You need to secure accounting help that will:
Manage daily accounting needs and ensure regulatory compliance
Don’t try to do this yourself. It will take you much longer than an expert, and you’ll risk making serious mistakes. Instead, outsource these tasks to a professional—and keep your focus on growing your business.
Track key financial data and create accurate projections
This will help you forecast your cash position, create a realistic operating budget, and yield insight into where your company’s key strengths and weaknesses are. It will also ensure that you have the data and reports you need when it’s time to seek investment money.
Serve as a source of referrals to investors
Accountants at financial services firms typically have a broad professional network and can be invaluable in connecting you with potential investors when the time comes.
Human Resources Professionals
As a SaaS startup, payroll is likely your biggest expense. However, you shouldn’t immediately get into the business of performing key payroll tasks in-house. While you are focused on growing your business, stay focused on what you do best and outsource non-critical functions for as long as possible.
HR professionals can assist you in growing and managing your staff by helping you with the following:
Savvy HR professionals can help you develop a hiring strategy, locate potential talent, and understand the market dynamics so you can create competitive compensation packages.
Drafting policies and procedures
A good HR professional will ensure that you stay up-to-date with the myriad policies and procedures that are needed to protect your company.
Managing payroll and benefits
Besides cutting regular paychecks and getting employees enrolled in benefits plans, you need to make sure you’re in compliance with applicable state and federal payroll and benefits laws. Making sense of it all is a full-time job—and one you shouldn’t be taking on. It’s just not taking the risk of making a costly mistake—and your time is better spent focusing on growing your business.
Teaming up with the right professionals can have a huge impact on your long-term success. Teaming up with the right service providers will help you focus on what you do best—growing your business.