How should I organize documents relating to my company?

Takeaway: There is no right or wrong way to organize documents but, if you raise money, you will probably be asked to assemble a data room of all your documents. It helps if your document storage structure is roughly aligned with a data room structure. This also has the benefit of being an easy way to find documents when you need them.

Organizing documents related to a startup company is a crucial task for ensuring efficient business operations and legal compliance. Proper organization can also help in securing funding and in due diligence processes during acquisitions or mergers. Here are some tips on how startups should organize their documents.

Create a Filing System

The first step in organizing documents is to create a filing system. This can be physical or digital, but it should be consistent and easy to navigate. The system should have clear categories for documents, such as legal, financial, operations, and human resources.

Use Cloud Storage

Storing documents in the cloud is an efficient and secure way to keep them organized and accessible. Cloud storage also allows multiple team members to access the same documents at the same time, which can be important for collaboration. Be sure to confirm that your cloud storage provider has adequate security measures in place to protect your information.

Keep Track of Versions

When multiple people are working on the same document, it's important to keep track of versions. Use a naming convention to differentiate between versions or use version control software.

Use Naming Conventions

Naming conventions are important for keeping documents organized and easily searchable. Use a consistent format for file names that includes important details such as date, project name, and document type.

Create a Master Document List

A master document list is a central location where all important documents are listed. This includes document name, date, location, and who has access to it. This can be helpful for managing access to confidential documents and ensuring everyone is working from the most up-to-date version. If you use Google Drive, for example, having a single document that links out to other documents can be helpful.

Regularly Review and Update Documents

It's important to regularly review and update documents to ensure they remain relevant and accurate. This can include updating contracts, financial statements, and company policies.

Recommended Organizational Structure

There is no right or wrong way to organize your files but I recommend that you organize them so that when you want to raise money and an investor asks you to populate a data room, your files are in an easily accessible structure. An example of such an organizational structure is as follows:

  1. Organization and Governance

    1. Certificate of incorporation

    2. Bylaws

    3. Minutes of any board meetings, board consents, and stockholder consents

    4. Current capitalization table

    5. Equity incentive plan (if any) and any related documents

    6. Organizational chart

    7. Any shareholders agreements

  2. Material Agreements

    1. Leases and other real estate agreements

    2. Loans and credit agreements

    3. Agreements involving the issuance of or commitment to issue equity of the company (including convertible notes, SAFEs, stock purchase agreements, stock option agreements, and restricted stock awards (RSAs)).

    4. Contracts with the company’s 10 largest vendors and 10 largest customers.

    5. Non-competition agreements other agreements that restrict the rights of the Company or another person to compete in any business, to solicit any customers or to hire or solicit any employees.

    6. Any other material agreements of the company.

  3. Labor and Employment Matters

    1. List of all employees indicating full or part-time status and exempt/non-exempt status, union/non-union status, position, location of employment, start date and salary, wages and other compensation.

    2. Employment agreements, including any severance or termination agreements.

    3. Consulting agreements, management agreements, advisor agreements and other professional engagements.

  4. Intellectual Property

    1. List of registered and unregistered trademarks, as well as all service marks, trade dress, trade names, logos, slogans, and domain names.

    2. Proprietary information and inventions agreements (PIIAs) for all of the company’s employees and consultants.

    3. List of computer software, source code, object code, programs and databases owned, used or licensed by the Company or otherwise used in or relating to the business.

    4. IP license agreements.

Conclusion

Organizing documents is an essential task for startups. By creating a filing system, using cloud storage, keeping track of versions, using naming conventions, creating a master document list, and regularly reviewing and updating documents, startups can ensure that their documents are well-organized and easily accessible, which can help in legal compliance, efficient operations, and securing funding.