Formation
Formation
Create the legal entity and the minimum viable financial stack.
- Delaware C-corp + cap table
- Domain + Google Workspace / Microsoft 365
- Business bank account + payment processor
- Source control + project management
The operating system
Minimum infrastructure to operate
A company is more than an idea and a product. It is a legal entity, a bank account, a way to collect money, a payroll service, a hiring process, and a handful of systems that keep the team honest and the customers happy. This page lays out the minimum stack a startup needs from day zero through Series B, with the systems that matter most at each stage.
The examples are representative, not endorsements. Every company’s exact stack will differ by sector, geography, and buyer.
The order of operations
- Before you can sell anything, you must be able to invoice or charge a card.
- Before you can hire, you must be able to run payroll and pay taxes.
- Before you can raise a priced round, you must have clean books and a cap table.
- Before you can sell to enterprise, you must have security and legal terms.
- Before you can scale, you must have one trusted source of truth for metrics.
Stage-by-stage stack
The right time to adopt a system is usually one stage before the pain becomes an investor question. Add infrastructure too early and it slows you down; add it too late and it becomes a diligence finding.
Pre-seed
Pre-seed
Hire the first employees and collect the first dollars.
- Bookkeeping + payroll + benefits
- Invoicing or checkout flow
- CRM + help desk + applicant tracking
- Cloud hosting + CI/CD + secrets manager
Seed
Seed
Make the business repeatable and defensible.
- Subscription billing + revenue recognition
- Expense management + HRIS + equity platform
- Observability + product analytics + data warehouse
- Customer success + formal contracts
Series A
Series A
Build the executive and operational infrastructure to scale.
- FP&A model + board reporting package
- Sales ops / quote-to-cash
- SOC 2 Type II + privacy program
- Performance management + BI dashboards
Series B
Series B
Professionalize for institutional scale and scrutiny.
- Audit-ready GAAP financials + revenue controls
- Advanced security & compliance certifications
- Enterprise sales systems and integrated data stack
- Robust governance, compensation calibration, and planning
System-by-system detail
For every function of the company, there is a minimum viable system that becomes a real liability when it is missing.
Entity & Legal Infrastructure
The paper that makes the company real
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Incorporation & cap table | Formation | Create a legal entity, issue founder stock, and maintain a clean ownership ledger. | Clerky, Stripe Atlas, Pulley, Carta | Unclean IP ownership, delayed diligence, or founder disputes can kill a priced round. |
| Standard contracts & legal counsel | Pre-seed | Employment agreements, IP assignment, customer terms, and vendor contracts. | Ironclad, Common Paper, outside counsel | Verbal or copied terms create liability; investors will flag missing assignment agreements. |
| Board governance package | Seed | Board minutes, approvals, stock plan, and committee charters. | Goodcounsel, Cooley, Gunderson, internal corp dev | Informal governance leads to stale stock plans, unauthorized option grants, and audit findings. |
Money, Treasury & Accounting
Knowing what you have and where it goes
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Business bank account | Formation | Segregate company funds, issue cards, and manage cash balances. | Mercury, Brex, Silicon Valley Bank, First Republic | Commingled personal and company funds make accounting and tax filings impossible. |
| Accounting & bookkeeping | Pre-seed | Record every dollar in and out, close the books monthly, and prepare for tax filings. | QuickBooks Online, Xero, Pilot, Fondo | No books means no fundraising; investors require at least a P&L and balance sheet. |
| Payroll & benefits | Pre-seed | Pay employees and contractors on time, withhold taxes, and offer benefits. | Gusto, Justworks, Rippling, Deel | Missed payroll taxes or misclassified contractors trigger penalties and personal liability. |
| Expense management | Seed | Issue cards, enforce receipts, and categorize spend against the budget. | Ramp, Brex, Expensify, Airbase | Untracked spending blows the burn multiple and hides shadow vendors. |
| Financial planning & analysis (FP&A) | Series A | Model runway, headcount scenarios, and investor-facing plans. | Arc, Jirav, Mosaic, custom spreadsheets + finance hire | Without a model, the CEO cannot defend valuation or explain how the round buys milestones. |
| Audit-ready financials | Series B | GAAP-compliant revenue recognition, accruals, and controls for due diligence. | Armanino, Moss Adams, KPMG, Vanta/Drata for controls | Diligence delays, purchase-price adjustments, or lost deals in regulated buyer environments. |
Revenue, Billing & Payments
Turning a sale into collected cash
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Payment processor / merchant account | Formation | Charge credit cards and bank accounts for products and services. | Stripe, Square, Adyen, PayPal, Chargebee | A company that cannot accept money cannot validate its business model. |
| Invoicing & accounts receivable | Pre-seed | Generate invoices, track due dates, and follow up on overdue payments. | Stripe Invoicing, QuickBooks, Bill.com, Melio | Manual invoices and late collections destroy cash flow and burn runway. |
| Subscription billing & revenue recognition | Seed | Manage recurring plans, usage meters, upgrades, downgrades, and GAAP revenue. | Stripe Billing, Chargebee, Maxio, NetSuite | Revenue leakage and incorrect ASC 606 recognition become material issues at Series A. |
| Customer relationship management (CRM) | Pre-seed | Track pipeline, contacts, and deals from lead to close. | HubSpot, Salesforce, Pipedrive, Close | No CRM means no forecast, no repeatable sales motion, and no answer to ‘what’s your pipeline?’ |
| Sales ops & quote-to-cash | Series A | CPQ, contract execution, approval workflows, and handoff to finance. | Salesforce CPQ, PandaDoc, DocuSign CLM, DealHub | Pricing errors, rogue discounts, and unapproved terms erode unit economics. |
People, HR & Equity
Hiring, paying, and retaining the team
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Recruiting & applicant tracking | Pre-seed | Post jobs, manage candidates, and run a structured interview process. | Greenhouse, Lever, Ashby, Workable | Ad-hoc hiring yields inconsistent quality and increases the risk of bad early hires. |
| HR information system (HRIS) | Seed | Store employee records, time-off, org chart, and compliance documents. | Rippling, BambooHR, Gusto, HiBob | Missing I-9s, unsigned handbooks, and unrecorded PTO create compliance exposure. |
| Equity management | Pre-seed | Track option grants, vesting schedules, exercises, and 409A valuations. | Carta, Pulley, AngelList Equity, LTSE Equity | Messy cap tables and expired 409As can block a financing or trigger tax penalties. |
| Performance & engagement | Series A | Run reviews, 1:1s, feedback cycles, and compensation calibration. | Lattice, 15Five, Culture Amp, Pave | Without a system, promotions and raises feel arbitrary, and top performers leave. |
Engineering, Product & Data
The systems that build the systems
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Source control & project management | Formation | Store code, track tasks, and coordinate product and engineering work. | GitHub, GitLab, Linear, Jira, Notion | Code on one laptop or tasks in chat history is not a recoverable business. |
| Cloud hosting & infrastructure | Pre-seed | Run the product, store data, and scale with customer growth. | AWS, Vercel, Google Cloud, Render, Fly.io | Self-hosted or flaky hosting turns every outage into a customer-trust event. |
| CI/CD & developer tooling | Pre-seed | Automate tests, deploys, and environment management. | GitHub Actions, CircleCI, Vercel, Terraform | Manual deploys and untested releases cause outages and regressions. |
| Monitoring, logging & observability | Seed | Detect outages, debug failures, and measure system health. | Datadog, Sentry, PagerDuty, New Relic, Grafana | You cannot fix what you cannot see; customers notice before you do. |
| Product analytics & data warehouse | Seed | Understand user behavior, funnel conversion, and business metrics. | Amplitude, Mixpanel, Segment, Snowflake, BigQuery, Fivetran | Every board meeting becomes an argument about whose spreadsheet is right. |
Security & Compliance
Earning the right to handle customer data
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Identity, access & secrets management | Pre-seed | SSO, MFA, password manager, and secure handling of API keys and credentials. | 1Password, Okta, JumpCloud, HashiCorp Vault | Shared passwords and leaked API keys are the fastest way to a breach headline. |
| SOC 2 / ISO 27001 readiness | Series A | Document security controls and pass third-party audits required by enterprise buyers. | Vanta, Drata, Secureframe, Laika | Without a security story, large customers and investors pause deals. |
| Privacy & consent management | Series A | Handle GDPR, CCPA, cookie consent, and data processing agreements. | OneTrust, Transcend, Termly, GDPR-compliant data maps | Regulatory complaints and DPAs can block EU expansion and enterprise sales. |
Customer Operations & Support
Keeping customers happy after the sale
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Help desk & ticketing | Pre-seed | Receive, route, and resolve customer questions and issues. | Zendesk, Intercom, Front, Help Scout | Support in a shared inbox misses SLAs and burns out early team members. |
| Customer success & health scoring | Seed | Onboard, retain, and expand existing accounts. | Vitally, ChurnZero, Gainsight, Catalyst | Without a health score, churn surprises appear in the quarterly board deck. |
| Business intelligence & reporting | Series A | Unify data from CRM, product, finance, and support into dashboards. | Looker, Tableau, Metabase, Mode, Hex | Every function reports different numbers, and leadership decisions lag reality. |
Office, Productivity & Communication
The everyday tools that keep the team aligned
| System | Stage | Purpose | Examples | If you skip it |
|---|---|---|---|---|
| Domain, email & calendar | Formation | Professional addresses, shared calendars, and scheduling. | Google Workspace, Microsoft 365, Fastmail | Founder Gmail addresses look unprofessional and complicate IP ownership. |
| Team chat & meetings | Formation | Real-time communication, async updates, and all-hands meetings. | Slack, Discord, Microsoft Teams, Zoom | No shared channel means decisions live in private DMs and new hires lack context. |
| Docs, wiki & knowledge base | Pre-seed | Write down decisions, processes, onboarding, and the company handbook. | Notion, Confluence, GitBook, Coda | Tribal knowledge disappears when the first ten employees leave or scale past the founders. |
The revenue collection checklist
If the company sells a product or service, the following must be true before the first customer pays:
- A legal entity that can contract and receive funds.
- A business bank account separate from the founders’ personal accounts.
- A way to charge a card or issue an invoice — ideally both.
- Terms of service and a privacy policy appropriate for the jurisdiction and buyer.
- A contract or checkout flow that captures the customer’s agreement to those terms.
- A process to record the revenue and reconcile it in the accounting system.
Related guides
Educational overview only. Tool names are examples, not legal, financial, or tax advice. Choose providers based on your jurisdiction, buyer requirements, and budget.