ScaleFactor (Accounting Automation)

As an entrepreneur you should be focused on growing your business, not categorizing transactions or reconciling bank accounts!   

ScaleFactor automates complex bookkeeping tasks and translates financial information into usable business insights, enabling entrepreneurs to focus on what they love: running and growing their business. 

Save today with this exclusive offer to Newchip Accelerator Companies 

Exclusive Offer for Newchip Companies
Regular Price Getting Started Growing
$4,800/year $4,000/year $7,000/year
$800 Savings $1,400 Savings
Bookkeeping (Up to 2 connected financial accounts) Check Box Check Box Check Box
Investment includes your Xero or QucikBooks Online License Check Box Check Box Check Box
Cash or Accrual Modified Cash Modified Cash Modified Cash & Accrual
Bill Pay (up to 10 bills) Check Box Check Box Check Box
Quarterly Reporting Quarterly Reporting Quarterly Reporting Monthly Reporting
Cash Vision X Check Box Check Box
Payroll Management (For up to 10 ee’s) X X Check Box
State Sales Tax Filing (1 state) X X Check Box

 

**Includes additional product (Cash Vision) and ~17% discount from regular pricing. 

 

ScaleFactor will take all the back office work off of your plate

Daily Bookkeeping

Automatic daily transaction classification and expense tracking keeps your books clean, accurate, and reliable so you that you’re always in control of your business.

Bill Pay and Invoicing

Manage your money with one bank-grade secure login. Get paid faster, make outgoing payments on time, and seamlessly manage your cash flow.

Business Tax Prep and Filings

Expert CPAs prepare, review, and file your tax returns to keep you compliant and help you get the best refund. Plus, you’ll get automatic deadline reminders.

Cash Forecasting

Keep a clear view of your cash position, predict your cash flow up to 6 months out, and forecast for potential business decisions, such as hiring a new employee.

Microsoft for Startups (Business Tech Enablement)

Newchip is in partnership with Microsoft for Startups that qualify. Below are further details on the type of benefits and resources Microsoft can offer participating Newchip companies. 

Technical enablement

Microsoft technology to help your bottom line:

  • Up to $120k of free Azure cloud for two years
  • Visual Studio Enterprise cloud subscription
  • Office 365 Business Premium
  • Dynamics 365 for Customer Engagement and Talent
  • Enterprise grade Azure support

Access to engineers:

  • NDA roadmap briefings
  • 1:1 consultations
  • Architectural Design Sessions
  • 1:few coding events

Business enablement

Tools and resources to accelerate your Go-To-Market:

  • Customized 6-month Go-To-Market plan
  • Dedicated marketplace onboarding support desk
  • Marketplace listing optimization
  • Blog, evidence, event promotion
  • Joint marketing and demand generation campaign
  • Industry-focused campaigns and joint engagement
  • Access to additional premium Go-To-Market services

Sales enablement

A guided joint sales experience that includes:

  • A dedicated success manager
  • Bi-directional lead sharing with our sales teams
  • Targeted account planning
  • Facilitated introductions to reseller and services partners
  • International market expansion assistance
  • A worldwide network of Microsoft sellers paid to sell your solution into their enterprise accounts

Please go here to access further info on Microsoft for Startups

Amazon Web Services (AWS) – Pre-Seed Accelerator

Amazon Web Services provides startups with low cost, easy to use infrastructure needed to scale and grow any size business. AWS Activate is a program with resources designed to help startups get started on AWS. Join some of the fastest-growing startups in the world and build your business using AWS.

Instructions:

Visit the AWS Activate webpage https://aws.amazon.com/activate/portfolio-signup to apply.

  1. Use this Organization ID (case-sensitive) on your application form: 0aLSz (Note: This is not a promotional code that can be used in your Billing Console)
  2. Provide your AWS Account ID on the application. Promotional Credits will be added directly to this account, so please double check it – we cannot transfer credits in the future.
  3. Please provide your startup company name and email address associated with your AWS Account ID.

*Please note that this link and Org ID should not be shared.

To see your credit balance, applicable services, and expiration date, please go to your Billing and Cost Management Console
 
As a Newchip Pre-Seed Accelerator company, you will be eligible for:
  • $5,000 in AWS Promotional Credit valid for 2 years
  • 1 year of AWS Business Support (up to $5,000).
  • 80 credits for self-paced labs

 

AWS Promotional Credits expiration dates are based on your program start date or the date you received investment, regardless of when you actually submit the application, so please apply promptly. Companies may not be eligible for AWS Promotional Credits if they previously received a similar or greater amount of credit. Companies may be eligible to be “topped up” to a higher credit amount if they previously received a lower credit. For more information, please review the AWS Activate Terms & Conditions.

If you have additional questions please contact us.

Essential Reading for Entrepreneurs & Startups

Essential Reading for Startups

The following collection includes some of the most prized and timeless readings on the topic of startups and business. Although none of these books are required for your participation in the Newchip program, we encourage you to get in the habit of working through this list of books over the coming months and years. The knowledge, tools, and insight imparted by each of these books will add a wealth of value to your personal development and growth as an entrepreneur rising leader. 

To order any of the books in this collection, simply click on the front-cover. A new page will open with a direct link to a purchase site. 

General Startup Knowledge  

Marketing

Product

Sales/Business Development

Biography/Business History

Investor Expectations AFTER the Raise

Investor Expectations AFTER the Raise

After you have raised the funds and closed out the round, you need to understand what are the expectations of investors going forward. You cannot go into a silent mode. You cannot keep investors off in the distance, unaware of what is going on with the company. As we have stated over and over, this is a relationship between you and your investors. Communication is important every step of the way.

The following are five basic things that we recommend you do after the raise. They may seem simple, but it will take discipline for you to execute on them consistently. You should even schedule these actions on your calendar.

  1. Talk to your investors regularly.
  2. Proactively provide standardized, monthly updates and quarterly updates to your investors. (Ask your investors if they even want a weekly update, if it will make a difference)
  3. Update your investors about large milestones, as they happen.
  4. Keep your investors up to speed on all your metrics and KPIs.
  5. Limit your information-sharing to what makes sense (except when it comes to board members who are investors, as the board should have full transparency). You should work with your leadership team to determine what will be shared with investors on a regular basis.

Remember that after you close your fundraising round the real work begins. Now you have to deliver on your vision and keep your investors update on your progress. Proactivity is key here as it demonstrates a clear interest in the investor’s stake in your business. Never lose sight of the people who helped pave the way for your idea and vision to become a reality. Investors will likely play a major role in your long term success, so don’t leave them in the dark. By getting the fundamentals right, it makes everything else easier for you and them.

Why VCs and Accelerators Do Not Sign Non-Disclosure Agreements 

Why VCs and Accelerators Do Not Sign Non-Disclosure Agreements 

Founders of startup companies often ask why VCs and Accelerators do not sign Non-Disclosure Agreements (NDAs). Founders see NDAs as legal protection for their ideas that fuel their startups. They do not want a VC or an Accelerator to go off and tell competitors (or would-be competitors) about their idea. Sounds reasonable, right? Well, not to VCs and Accelerators. They do not want to sign an NDA.

The reality for VCs and Accelerators is different. For example, VCs are usually looking at any given time at multiple deals that are similar to each other. The founder/CEO of one startup does not know what the founder/CEO of another startup is saying. It could very well be very similar. However, if the VC chooses to invest in one company, but not the other, then the founder who was passed over will likely believe the VC stole his idea, even though it was not the case at all. As you can imagine, this misunderstanding can result in a big problem.

Simply put, a VC does not want to create a legal issue by signing an NDA. Neither does an Accelerator, which is hearing the ideas and pitches of many startups. VCs and Accelerators spend hours every day listening to new ideas and startup pitches. Many of these ideas can be somewhat similar to those of other applicants. To this end, while the founder of a startup may think his idea is so innovative and “no one else has ever thought of this,” it is entirely possible that someone else has thought of it and is already far more advanced with the idea.

In any case, a VC does not want to be held back by a legally-binding, enforceable contract that can hamper their ability to invest in new companies. Remember that VCs are in the business of making money for their investors by investing their money into promising startups. The last thing a VC want is a limited deal flow as a result of an NDA for this can negatively impact their business prospects.

This is not meant to be discouraging for you. It is just meant to point out that many startups can be similar, so what is ultimately important is what differentiates them. Yet, an NDA is not going to make a startup more differentiated. The quality of the pitch, the sound financials and the traction are what count. Moreover, ideas are cheap; they’re a dime in the dozen. Odds are that there are several other people or startups in the world that already thought of your idea. What always separates these companies chasing the same idea is execution!

If you are adamant in asking a VC to sign an NDA, it shows, unfortunately, that you are either clueless, stubborn or excessively paranoid. It also suggests to potential investors that you have not taken the time to actually know them and understand their interests. 

Another reason that VCs and Accelerators decline to sign NDAs is that the process to sign and fully execute an NDA is very involved and complicated. You have to go back and forth on changes to the NDA, involving lawyers, who charge by the hour. The VC puts something in the NDA that you don’t like; then the VC puts something in the NDA that you don’t like. The VC will end up spending more time working on the NDA than spending time talking to you as an entrepreneur. How productive is that?

The other thing about NDAs that many entrepreneurs don’t even consider is the managing of the NDAs. VCs and Accelerators would need to track all NDAs and be constantly up to date. It would create so much extra work for them. It would be difficult and time-consuming. Furthermore, even if an NDA were signed, there would be little chance that the NDA would be enforced if a VC ended up investing in a similar company. In large part, VCs and Accelerators view NDAs as a waste of time and paper. An NDA typically only makes sense when it involves a merger or acquisition. When the stakes are actually very high for all parties involved. 

The general rule of thumb is: If you think you have something that you think needs to be kept under lock and key so that no competitor finds out, then you do not tell the VC or Accelerator that part of your idea or your business. You can speak in more generic terms. However, in doing so you may lose the opportunity to articulate your differentiation. Even if sharing your idea will spark ideas in others, the way you implement your idea will be the thing to make you and your company standout. If you hide in imaginary “NDA land,” then no one will know you or your company.

So when a VC or an Accelerator turns down your request to sign an NDA, it’s not personal against you. It’s an opportunity for you to build trust with the VCs and the Accelerator. You will have an opportunity to get feedback and test your ideas. Don’t waste the paper that an NDA is printed on. The surviving trees will thank and so will your potential investors.

Contact the Investor Before Freaking Out 

Contact the Investor Before Freaking Out 

One day, you may look at the edits to a contract that the lawyer for the investor made and then you want to freak out. An investor’s lawyer may add provisions that seriously concern you. You may feel like they are blindsiding you with a prickly provision or trying to take advantage of you or injecting measures that seem excessive to you. When this happens, it’s easy to misinterpret certain legalese and imagine an infinity of negative scenarios that impact your end of the deal. However, you must clear any doubt before you freak out.

Before you lose your mind and cancel the deal completely, it is better for you to reach out directly to the investor and see if they care so much about the provision that bothers you – or not. Although the lawyer has added a certain provision, the investor may not care and may not agree with his own lawyer. Sometimes the investors are totally unaware of certain provisions that were placed on their behalf by their lawyers. This is why you must be clear and raise any concerns with your investor. If a given provision in the contract irritates you, it is possible you can have it removed. Remember that negotiation is expected at this stage, and a significant portion of the negotiation stems from what is written in the proposed contract. 

Lawyers tend to think that it’s good for their clients to add certain endgame protections, such as in the case of bankruptcy. The lawyers get caught up in their legalese, trying to prepare for every imaginable possibility. However, the reality is that, in those cases, there is very little and usually nothing left for investors, so those protections aren’t needed.

Simply talk to the investor about the issues. As partners, you are more than likely able to work out a compromise. This is why you need to be committed to negotiating the terms with the investor, not with the lawyer.

Don’t Make Material Changes at the 11th Hour 

Don’t Make Material Changes at the 11th Hour 

You’ve probably been in a situation in which someone else wants to make changes to something at the last minute. More often than not, these changes in the 11th hour lead to mistakes because there is simply no time to analyze all the implications of the changes. There could be something unforeseen that even one change could cause as a ripple effect.

Therefore, the best advice we can give you is to avoid making any material or substantial changes at the 11th hour. You simply cannot be making any huge changes to the economic terms of your deal at the last minute. Doing so can be misperceived by your prospective investors as poor form, or worse a sign of indecision, impatience, or incompetence. Instead, make all significant changes during the negotiation period, including the due diligence stage. This is the appropriate and expected time to go back and forth, not the 11th hour.

Some material changes that you should not be changing near the end include number of shares, amount of money and liquidation preferences, among other things that are substantial and would have a significant impact on you and your company.

Besides increasing the risk of making mistakes or putting yourself inadvertently at a disadvantage, it is considered bad form for both parties. So, this rule also applies to you as a person who potentially would want to make changes in the 11th hour. Such a move could infuriate the investor, even if you think it’s “easy” or “no big deal” to change a number on a piece of paper.

To avoid this situation, be proactive earlier in the process. If you want to change or adjust the terms of a deal, bring it up earlier when you are at the negotiation table. Making material changes at the 11th hour is tantamount to getting out of your passenger seat once the cabin door has closed, once the airplane has started to taxi to the runway, and then demanding to change your ticket to fly to a different destination. It’s a recipe for disappointment, disaster, and will ultimately deliver a negative impact to you, your company, and potential investors.

Closing an Investor 

Closing an Investor 

It may not be the most comfortable thing for you; it may not be your first choice; it may not what you prefer, but at some point in the negotiation, you need to push the investor to close. Then again, this is the desired outcome of your fundraising efforts. 

Your startup does not have unlimited cash for eternity. You have a set runway underpinning the existence of your business, team, and future. The clock is ticking, and you must have a sense of urgency as you approach the end of your round.

You may think that the investor needs months to think about it, but let’s face reality: after all the conversations and the extensive process of due diligence, there is not much else you can say that will change the outcome. If the investor spent the time to meet with you and discuss potential investment, it means they are interested. Don’t lose sight of this fact. If the prospective investor hadn’t considered you as a viable investment opportunity, they wouldn’t have gone out of their way to even propose such a possibility. After 45 days or so, the reality is that the decision has probably been made. You just need them to close on the deal!

Remember your ABC: “Always be closing.”

What can distract you from closing are vulture-like investors who will drag out the process in order to drain you and then ask for better terms. You need to be very aware of this possibility unfolding right under your nose.

Your best weapon is to have enough runway – enough cash on hand to keep your company’s operations going forward. The following are three things to keep in mind while you are trying to close on new investments in your business:

  • Never assume that you are done raising money with an investor until the money is in the bank
  • Keep talking to investors
  • Put them in a box and have them race, if you have to

You might be limited in your ability to put all investors into the final stage of the process, but you can pick, for example, 6 out of 10 who decide to close, but always have warm leads and conversations going. If you can’t get them into this round, don’t sweat it; you may still be able to get them in the next round. You can even put them in the back-burner as a back-up investor for later on. All things considered, you must focus on closing. You will thank yourself once you do.