But there are many different exit strategies, ranging from obtaining private investment to selling the company outright to partnering with a bigger company to going public with an Initial Public Offering (IPO) of shares.

Regardless of what the company's strategy is, be prepared and have all of the company documents well organized and available for the inevitable due diligence that will occur.

PDF all documents and label each in a meaningful way. Organize the PDF files in a sensible way in well labeled folders, and keep copies of all e-files in an offsite location, preferably in another city—something Katrina taught us all.

Due diligence files should include at least the following categories:

• Organizational. Include all incorporation documents, bylaws and the like.
• Financial. Include copies of all financing documents, lists of shareholders, tax filings, business plan, market analyses and the like.
• Employment. Include copies of all employment contracts and any related employee benefit information, including a summary of all employees and their significant rights.
• Confidentiality Agreements. Include copies of each, and ensure that everyone with access to confidential information, including third party vendors, executes a confidentiality agreement.
• Intellectual Property. Include copies of all patent applications and assignments, and an up-to-date summary of patents, their ownership, the scope of claims, freedom to operate, status, maintenance and expiry information. Include additional files for trademarks, trade secrets, copyrights and domain names as needed.
• Licenses. Include copies of all in-and out-licensed technology, and a summary describing the general scope of each and significant terms, such as royalty obligations, and restrictions on transfer, field of use, or geography.
• Contracts. Include copies of all non-employee contracts such as with laboratory or computer service providers, landlords, and the like.
• Publicity. Include copies of all publications, press releases and brochures.
• FDA. Include copies of all communications with the FDA and all supporting data.
• Other. Include such material as lists of assets, real estate, a description of any disputes or litigation and supporting documents, environmental documents including permits, audits and lists of hazardous materials, etc.

I hope that the tips I have provided give you the courage needed to start a technology company and give your company a better chance at success by making you aware and able to avoid some common pitfalls.

The risks are great, but the rewards can also be great, and what better way to express a passion for research and commitment to the betterment of humanity than to successfully bring new technology to the public.

More Tips for Scientist Entrepreneurs

To learn more about how to bring a product out of the laboratory and transition from the role of scientist to that of entrepreneur, please browse the rest of the tips for science entrepreneurs in this article series:

• Transitioning from Science to Sale - We introduce our 10 tips for entrepreneurial scientists who want to take their science to market.
• 1. Getting it in Writing - Before you get too far along in the process, it's imperative that you put together written contracts that define ownership rights, confidentiality and other important obligations and understandings.
• 2. Cultivating A Culture of Invention - Encouraging invention is the first step to creating valuable intellectual property. We look at what organizations must do in order to motivate employees to create proprietary science and apply for patents.
• 3. Getting Inventorship Right - Patent laws require that you get inventorship right. Get it wrong and you can lose the patent. Here are some simple ways to avoid making a mistake in the naming of inventors.
• 4. Using Hardbound Notebooks - Your lab notebook could end up being used as evidence to invalidate your patent claim. We discuss the proper use of hardbound lab notebooks to ensure proper IP protection.
• 5. Planning a Patent Strategy - Filing patents can be an intimidating endeavor, but there are some best practices for scientist entrepreneurs that you ought to know about.
• 6. Planning an FDA Strategy - Knowing these tips for getting FDA approval will come in handy if you are working on new drugs or medical devices.
• 7. Loosening the Reins - You can't do it all. Scientists entrepreneurs must know when to transition leadership and when it's time to bring in the pros.
• 8. Stirring Public Interest - Promoting your science before you commercialize can smooth the road to funding...but there are a few mistakes you can make if you are not careful.
• 9. Financing the Company - It takes money to make money. Here are a few things to know about the funding process.
• 10. Preparing for Due Diligence - Due diligence involves intense scrutiny of all of your documents. It's critical to keep your documents well-organized and readily accessible.