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If you are planning to raise outside capital or you plan to sell to the largest companies in the country, start being Sarbanes-Oxley-compliant now. SOX is the new rule book, and all publicly traded companies, financial institutions, and nonprofit entities will have to comply. Within the next several months, VC firms will have to conform to SOX, too. Beyond any immediate desire for VC funding, if you envision your company being publicly traded someday, it will certainly have to be compliant.
The best place to start will be with your attorney, who may be able to provide you with a basic list of things to do. As your company grows, you should bring in a SOX consultant to establish the SOX processes you need.
SOX compliance is not cheap, so it has to be figured into your operating costs and personnel needs. For this reason, it is a good idea to ease into SOX compliance while you are small, before it is a do-or-die situation.
Marilyn Holt, CMC
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