7/29/2005

The Process of Forming a Company

"John Nesheim, in his best-selling book High Tech Start Up: The Complete Handbook for Creating Successful New High Tech Companies, concludes from his research that there are 14 stages in taking a venture from idea to IPO, as follows:

Stage 1: Getting the Idea
Stage 2: Meeting Around the Kitchen Table
Stage 3: Getting the Founders' Commitments
Stage 4: Pullout from Employer
Stage 5: Creating the Business Plan
Stage 6: Filling the Management Team
Stage 7: Raising Seed Capital
Stage 8: Incorporating and Cash in the Bank
Stage 9: Finding a Home
Stage 10: Starting Up
Stage 11: Raising Secondary Rounds of Capital
Stage 12: Launching the First Product
Stage 13: Raising Working Capital
Stage 14: Initial Public Offering

Chapter 3 of High Tech Start Up, reprinted in this startupventuretoolbox.com article, describes the main focus activity, time required, typical participants, help needed, major costs, main risks, output and ROI for each of these stages. Although written for a hi-tech company, this discussion is also generally applicable to most other new ventures."