I had a long conversation with Niall Larkin today in the Digital Depot. We ranged over a bunch of topics and as part of it I found myself talking a little about the PutPlace journey. Some of this may be useful to people starting their own companies so I repeat it here (at the risk of boring Niall ;-)). I’m pretty sure I’ve said most of this before I one place or another still it bears repeating:
- Incorporate: Create a limited Liability company at the earliest possible opportunity. It gives you the opportunity to write of a bunch of costs against future tax payments, allows you to claim back VAT easily and gives your a track record. People much prefer a 2 year old company to a 3 month old company for all kinds of good reasons. There are plenty of companies who can do grunt work of CRO filings so shop around.
- Get on an Incubator Program : Anybody who tries to start a new company these days without joining one of the many excellent incubator programs has rocks in his head the size of Gibraltar. In Dublin I know of two, the M50 program at Tallaght and the HotHouse program at DIT. Both are excellent. (Please add a comment if you know of others, I came across this list via Google). What does an incubator give you? A space to think in the company of like minded individuals, training, sometimes money and a fast track to HPSU status with Enterprise Ireland.
- Get a CORD Grant: Most incubator programs have access to CORD (Commercialisation Of Research and Development) grants via Enterprise Ireland. If you can tick the “I plan to generate exports and employment” boxes for EI CORD funding should be straightforward. Its important to get CORD early as it is essentially a refund of tax paid in the previous tax year. If you wait you may end up trying to claim for a year you spent navel gazing without any tax payments to claim against.
- Get Seed Capital Relief: If you are investing your own money and you fit the EI profile for a HPSU then you can claim back 40% of what you invest from the Revenue Comissioners, tax free under the Seed Capital Scheme. The other key stipulation is this is a refund of tax, so you have to have paid the equivalent amount of tax in the previous 5 years and have the evidence, i.e. your P60 to prove it.
- Get Your Own EI Development Advisor: I can’t begin to tell you how important it is to engage with EI early and often. Within 8 months of kicking of PutPlace I was asking for my own DA as opposed to the group DA assigned to my incubator program. It took another 12 months before we recieved EI grant approval. EI learns by omosis so you need to meet and pitch them several times before your idea will stick. Top tip: Go and meet EI rather than listening to the Blogosphere, everybodys experience is different and people are ten times more likely to complain than praise on the web.
- Find a Co-Founder: Yeah, its cool to be the man, I own my own company, I’m the CEO and CTO… Well actually it isn’t. All you one man bands out there need to find another person to complete your skill set. If you are an uber-techie, find a business development person, if you are in sales, find a geek to build your system (and make sure you don’t blindside him/her) etc. etc. I can’t tell you how frustrating it is to have every trip you make to the toilet be on the critical path.
- Ship Something Small: Build the smallest thing you can. No smaller than that, no even smaller. Have a big vision, write it down, put it in a box, put the box in a cupboard and think what can we build in 6 months, then aim to build it in three.
8 thoughts on “Startup Advice (Again)”
Powerful stuff Joe. Plain and simple. Thanks for posting this.
Good Post Joe,
We are enrolled on the EI Transformme program which is available for anyone along the border counties.
Great stuff. One-man-show critical-path point is killer. I think about this every time I run down the steep stairs outside my office.
May I add this tidbit: You need to insist on a CORD grant. State enterprise agencies sometimes constrain the flow of this money by tagging on cumbersome terms and conditions to the release of CORD funding. I do not believe that should be the advisor’s prerogative.
And I know it sounds obvious but don’t forget to have a plan in place for when the CORD grant runs out after the first year. Time moves very quickly and while you are focusing on the development, marketing and sales it is easy to forget about your cashflow and how much your own salary will add to your burn rate.
And remember the County Enterprise Board will provide up to â‚¬75k for working capital in redeemable preference shares and this could tide you over until you get your seed cash in. This is in addition to CORD. Once you have about three months done on your incubation program and a basic business plan in place you should go for this. EI will probably take these shares over eventually but CEB are used to that.
Do you know if CORD is taxable? No one seems to know or want to know.
To the best of my knowledge CORD is not taxable income. However I am not a tax consultant, nor do I work for revenue, so caveat emptor.
This is very useful information and thanks for being so succinct!