In The Art of War, the general Sun Tzu observes that every battle is won or lost before it ever begins.
In modern-day parlance, it can be argued that every startup business venture either succeeds or fails long before a single transaction is completed. Or, to paraphrase a well-known cliché — failing to prepare is preparing to fail.
Matthew Burgess, founder and CEO of Formation Solutions, is quite familiar with the preparation involved with forming a business entity, and he is bringing that knowledge to bear to help people navigate the complex, often intimidating, entrepreneurial battlefield.
Formation Solutions, founded by Burgess in 2008, is a professional services firm that offers its clients hands-on assistance throughout the entire process of creating a new corporation or LLC. According to Burgess, who has been involved with forming more than 1,500 entities to date, starting a business is a risky process that can involve countless pitfalls, which is why it is paramount to have the proper guidance and support.
“What we are essentially is entrepreneurs helping other entrepreneurs to navigate the complexities of launching a new business,” Burgess said.
While he and his team are not attorneys, and therefore cannot give any legal advice to their clients, they spend a great deal of time building relationships with different legal practices, so they can effectively match their clients with the appropriate firms. With the help of his vice president of development, Michael Neville, Burgess has created a comprehensive referrals network database, through which he is able to direct clients to the exact type of practice they need for their specific entity. According to Burgess, this database allows Formation Solutions to be a one-stop shop of sorts, taking the guesswork out of the initial phases of starting a company, thereby allowing clients to focus on more important things.
“Most people who are staring their own business are certainly sharp enough and have enough experience to figure all this out — none of it is really rocket science,” said Burgess. “’Do I need a business license in the city of Santa Barbara?’ is not something that any entrepreneur can’t figure out. But it’s just a matter of getting all these administrative and trivial things off their plate so that they can really focus on their business.”
While there has been a proliferation of Internet sites offering “cheap” assistance in business formation, Burgess warns that there is a lot more to starting an entity than most first-timers realize.
“People say that you can’t be half-pregnant — well, I like to say that you certainly can’t be half-formed as a business,” Burgess joked. “A lot of people get wooed by sites that say, ‘We can do it for $139.’ The problem is that the ‘it’ that the site is selling is only one of many, many steps that a company needs to form properly. So while it looks like a good deal, and it sounds cheap, you very well may end up getting yourself in a ton of trouble.
“To put it into perspective,” Burgess continued, “we have built platforms that manage all the steps to form different types of corporations, and an S corporation project for us has 173 discreet steps. We handle every one of them, so that our client doesn’t have to.”
Burgess has lived in Los Angeles for the last 11 years but spends much of his time at the company’s Santa Barbara office, networking with local businesses and professional services firms. When he first visited Santa Barbara, he was immediately impressed with the city’s entrepreneurial spirit, which he says reminded him of the Silicon Valley during the early 1990s. To help cultivate this fertile entrepreneurial ecosystem, Burgess launched a blog, sbentrepreneur.com, in October 2009 and the site has been a great resource for local business leaders. In addition to providing an events calendar for people to keep up with networking opportunities, seminars and panel discussions, Burgess spends a lot of time writing thoughtful pieces about new and interesting business models emerging throughout the Central Coast.
“The blog allows me to speak to many more entrepreneurs, and write about the challenges of entrepreneurship,” Burgess explained. “It’s really a way to bring local businesses together and to give back to the community that has been so welcoming to me.”
After earning his MBA in 1996, Burgess moved to the Bay Area to work in a venture capital firm, where he researched new technologies and made investments. From there, he moved to the operational side of startups at Electric Communities, which later became Communities.com. In 1999, he co-founded a startup called SuperSig, with Mark Jeffrey, who has since been the founding chief technology officer of Mahalo and now CEO of ThisWeekIn.com.
After SuperSig, which set sail into the perfect storm of the dot.com crash years of 2000 and 2001, Burgess was an entrepreneur-in-residence at Zone Ventures in Los Angeles. Later, he co-founded Maverick Internet Ventures, which he served as COO, CMO and head of performance analytics, and where he built an analytics platform to manage very complex pay-per-click advertising campaigns and multivariate conversion path optimization of commerce sites.
Since its inception, Formation Solutions has been completely self-funded, but Burgess says he is looking to expand, and the young company will likely be undertaking a fundraising round of angel level capital in the third or fourth quarter of this year.
In the meantime, Burgess is thrilled to see people take the entrepreneurial leap, particularly in Santa Barbara, even during an uncertain economic climate. As a born entrepreneur himself, Burgess says his favorite part of the business is helping newcomers prepare for the battles ahead.
“Working with entrepreneurs is something I love, because they are a special breed,” Burgess said. “They have an appetite for risk, they tend to be super energetic and type A, so it’s a lot of fun to work with them.
“But the process of starting a new company is something that creates a lot of anxiety, and part of my job that I enjoy a great deal is helping relieve people of that anxiety by talking them through the whole thing, and always letting them know what to expect and what’s coming next.”
Click here for more information about Formation Solutions.