3.5 ($million) Mistakes to avoid with Co-Founders/Hiring/Firing


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Founders Institute Mentorship session with Chris J Snook on tough and costly lessons learned over his 13 year career with regards to Co-Founders, Hiring and Firing.

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3.5 ($million) Mistakes to avoid with Co-Founders/Hiring/Firing

  1. 1. 3.5 ($million) lessons related to Co- Founders/Hiring /Firing Mentor Session Denver 2013
  2. 2. Co-Founders/Hiring/Firing “People are your Greatest Asset and Greatest Liability… Managing the people balance sheet is critical to a startup’s success!”~CJS
  3. 3. BIG MISTAKE #1 Mistake 1: Starting a business with someone you date (sleep with but aren’t committed to) and continuing to invest in the dumpy thing long after its been DOA. Time Cost of the Lesson: 2000-2003 $ Cost of the Lesson $500k in personal debt (Recaptured after 2 long years by late 2005)
  4. 4. BIG MISTAKE #2 Mistake 2: Starting a business with someone who hasn’t had their teeth kicked in because they are the only one available at the time and you get impatient (untested people suck). Time Cost of the Lesson: 2006-2008 $ Cost of the Lesson $2.7m and a Personal BK due to improper entity structure
  5. 5. BIG MISTAKE #3 Mistake 3: Reviving a Co-Founder who has Quit on you in the past because you believe they had a bad day and it’s the right thing to do for them..(Quitters suck and will hurt you and betray you in the long run) Time Cost of the Lesson: 2010-2011 $ Cost of the Lesson $250k in cleanup, tax liabilities, settlements, and frivolous legal actions
  6. 6. Mistake 3.5: Not trusting your gut and or “forcing” a deal BIG MISTAKE #3.5
  7. 7. Templated Resource Contracts for Founders 1) Term Sheet Doc for Interim President https://docs.google.com/file/d/0B89Bfouju5NoN0xycG5wbDJvbW8/edit?usp=sharing 2) Term Sheet Doc for Interim CEO https://docs.google.com/file/d/0B89Bfouju5NoWWRwR0NnVDJ0eFE/edit?usp=sharing Source: Stephen Meade BigBamboo LLC I found the first non-founder hire…How Should I engage/compensate them?
  8. 8. Wise Actions To Live By… • Hire Slow FIRE QUICK • Document everything and have a Employee playbook! • Setup with a payroll service and don’t miss payroll tax • Put everyone on 4 year vesting schedules with 1 year cliff • Partner with people who bring different skills than you • Make employment contracts “At-Will” (rare exceptions) • Build a solid Board of Directors-Hire Good CPA-Lawyers • Manage the system/job description first-then the person • Have tough Founder equity split talks early
  9. 9. Know the Game You’re Playing View the Speech http://youtu.be/oSDhhZtRwFU
  10. 10. FIND ME @chrisjsnook And www.launchha.us www.chrisjsnook.com Slides available at www.slideshare.net/chrisjsnook