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๐—–๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ & ๐—ฅ๐—ฒ๐—ฝ๐—ผ๐—ฟ๐˜๐—ถ๐—ป๐—ด - ๐—ช๐—ต๐—ฎ๐˜ ๐˜๐—ผ ๐—ž๐—ป๐—ผ๐˜„ ๐—ถ๐—ป ๐˜๐—ต๐—ฒ ๐—™๐—ฎ๐˜€๐˜ ๐—Ÿ๐—ฎ๐—ป๐—ฒ



People watching races want to see the competitors go as fast as possible and eagerly await the winner.


Experts know to consider the course conditions, rules for the race, and safety gear to not only triumph but also to race again.


The winner of the race embraces the track to go fastest

While compliance and reporting may not be as exciting as a race, they support the larger interest of ongoing competition.


๐˜•๐˜ฐ๐˜ต๐˜ฆ: this post should not be used as legal advice. Seek expert advice to meet your specific needs.


๐—ช๐—ต๐˜† ๐—–๐—ฎ๐—ฟ๐—ฒ ๐—ฎ๐—ฏ๐—ผ๐˜‚๐˜ ๐—ฅ๐˜‚๐—น๐—ฒ๐˜€ ๐—ฎ๐—ป๐—ฑ ๐—ฅ๐—ฒ๐—ด๐˜‚๐—น๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐˜€?


At their best, rules and regulations serve to create a reasonable and safe environment for business growth. Keep in mind:


ยท Best Practices โ€“ Rely on strategy and efficiency to disrupt markets, and push on the rules to prompt innovation


ยท Client Requirements โ€“ Know how an industry works properly to focus on value proposition and negotiation


ยท Exit Preparation โ€“ Install the right policies and practices now to confidently approach investors and acquirers later


๐—ช๐—ต๐—ฎ๐˜ ๐—ฎ๐—ฟ๐—ฒ ๐˜๐—ต๐—ฒ ๐—–๐—ผ๐—ป๐˜€๐—ฒ๐—พ๐˜‚๐—ฒ๐—ป๐—ฐ๐—ฒ๐˜€?


Although enforcement can be burdensome, improper compliance and reporting leads to some severe consequences:


ยท May delay/derail a funding round, debt financing, or an exit plan


ยท In some cases, the lack of compliance is unfavorably factored into a funding round


ยท Fees and penalties can cost the business, and even can impact you personally


Compliance may require work but prevents major issues later.


๐—›๐—ผ๐˜„ ๐˜๐—ผ ๐—”๐—ฝ๐—ฝ๐—ฟ๐—ผ๐—ฎ๐—ฐ๐—ต ๐—–๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ?


๐™‚๐™ค๐™ก๐™™๐™ž๐™ก๐™ค๐™˜๐™ ๐™จ. Some people ignore these matters (e.g. first-time founders who have yet to see any consequences) and others become obsessed (e.g. people from a large corporate environment).


Find the middle road. Talk with attorneys, founders, investors, and advisors to understand the potential consequences. You may decide to tackle compliance in steps between now and future rounds.


๐˜ผ๐™ช๐™™๐™ž๐™ฉ๐™จ. They're draining but reconsider the process as a learning opportunity.


Having an outsider question your process, results, and impact can prepare you to reach the next level. For instance, a financial audit may reveal issues you can address before your next round.


๐™’๐™š๐™ก๐™ก-๐™ง๐™ค๐™ช๐™ฃ๐™™๐™š๐™™ ๐™๐™š๐™–๐™ข. To reach success, you surely need mavericks and creatives. You also need someone minding the business.


Minding rules and regulations now will establish trust and demonstrate competence benefitting your expansion.



With compliance, address whatโ€™s necessary now and carefully plan for building processes based on demands and resources.


Your startup will face many trials. Race cars have maintenance and equipment checks to ensure they speed away safely every time.

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