By: Mike Lilly
Now that it is close to the midpoint of 2018, we’d like to direct our Founders and those considering starting their own business on ways to get a head start on maintaining compliance and planning for the remainder of the year.
If you weren’t able to file your taxes at the beginning of the year, keep in mind that most of the extension deadlines for 2017 tax returns are coming up. September 17, 2018 is the deadlines for LLC’s and S Corps and October 15, 2018 is the deadline for C-Corporations. (Here we have provided a link to the IRS’ tax calendar, which will inform you of either individual, corporate, and specific state extension deadlines.)
This is also an excellent time of year to think about strategic tax planning for the remainder of 2018 and beginning of 2019. What are your plans to expand? To hire? Your growth plans can have an impact on tax consequences and there are many variables to consider ahead of time. It’s important to speak with a tax professional on these matters before decisions are made.
This time of year can be tricky for fundraising, since the months of June, July, and August are traditionally harder for meaningful conversations with VCs and investors, since travel and vacation time usually hits its peak during these months. If you are targeting a fundraise later this year, we would recommend you start having these conversations now in order to ensure that you are getting close to closing your round in the months of September and October, when funding has resumed its more typical pace. Deals also drop off noticeably from Mid-Nov. through December due to the holidays. It’s not to say that you can’t close a round over the summer or at the end of the year, but it’s worth considering the timing of your fundraise and how that aligns with the timing of venture capital deployment.
In a similar vein to fundraising, the biggest months for hiring talent are January, September and October. In January, companies have new fiscal budgets and have targets to set for expansion and we see the highest increase in hiring then. Towards September and October is a secondary hiring peak where potential employees may be looking to move before the year ends. The timing of your hiring could be important for you if you are looking to either grow aggressively or to round out the rest of your team.
Arguably, the most important point (besides taxes of course) are milestone considerations for the year. It’s important to look back at how the first half of the year has gone and plan accordingly to ensure you are staying on track or making adjustments where necessary. Did you expect to be close to your beta test by now? Should you be launching an MVP soon? Have you billed your first customer? What are your investors expectations–what did you say you were going to accomplish this year with the money they gave you?
These are some important things to look at as we near the midpoint of the year. Most of the above considerations will be influenced by the milestones you’ve set which could impact your fundraising or hiring schedule. It’s important to take a moment to address how your plan is going and what needs to be changed in order to accommodate your milestone timeline.
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