Infernape1010 has the total wrong idea of how mulligans are done. Here's what happens during set-up:
~Both players draw opening hand of 7 cards.
~Both players check to see if they have any Basic Pokemon. If they do, they set 1 down as their active. (Once set the Active cannot be changed.)
~If a player doesn't, he shows his hand to his opponent and reshuffles, drawing a new 7-card hand. Repeat until both players have an Active Pokemon set.
~Then, players can set Benched Pokemon (up to 5). After that, prizes are put out.
~After that, if a player mulliganed, the opponent may draw 1 card for each time a mulligan happened. The exception is when both players mulligan at the same time, in which neither draws the extra card. If a player draws any basics at this point for mulligan draws, they can be put on the Bench.