Previously the main worry for startups was the funding issue. But websites like Kickstarter has solved all such troubles by discovering ways for founders with brilliant ideas to set up their startup using proper funds. Generally banks and Venture Capitalists are something founders tend to avoid and many of them embrace Crowdsourced Funding. However it is important to know that crowdfunding comes with its own risks. Therefore what one needs to do before acquiring money through crowdfunding is researching on few practical details.
You, being the founder of your startup, are legally liable to it. You need to protect your property legally before you acquire investments from probable investors. Secure your personal assets, as founders are liable to both investors as well as IRS. Classify your idea as LLC (Limited Liability Company). This ensures that your enterprise has a legal liability and the entire profit amount goes only to you. You, as the founder, will be responsible solely for the taxes and not the debit of your company. You will be able to request for an Employer ID number with IRS and also create a Business account for your startup.
Taxes are the most crucial part that must not be ignored in any way. Although the funds attained by crowdsourced funding is considered mainly to be donations, a particular tax amount will still be applicable. Many websites provide information for accountants to solve their queries regarding paper submission to IRS. Whenever 20,000 dollars or more are sent, received or routed, 1099-K form needs to be filled and submitted. This standard procedure must be kept in mind all the time. The best you can do to save yourself worries is to hire a tax specialist.
If you were crowdfunding it would mean that your idea would come under the spotlight. Not only will the investors take note of it, but also the competitors in the market will observe and analyze your services. The Copyright Act protects your idea to the maximum extent. However, just to be on the safer side, appoint a lawyer who can take care of all the legal sides and protect your intellectual property.
Be in constant touch with your investors as communication is very important in building a healthy relationship. At every stage of your product development keep your investors informed. Let them know all that is happening in your enterprise. This will not only get them enthusiastic but also inform them of the problems you are facing and the reason why you are unable to deliver within the deadline. Making regular conversation with the investors will make them feel personally involved with the process.
Give minute attention to every nook and corner of your venture and get rid of all troubles points. In no time you will reach that spot where you will be enjoying the benefits and triumphs of your startup.