SlideShare a Scribd company logo

Building & Keeping Your Executive Team: How to Recruit and Retain Senior Executives for Your Startup or Early Stage Company

This presentation was given on May 17, 2022 for Boston Entrepreneurs’ Network, where I was one of three invited speaker for the evening's webinar on “Recruiting Board Members and Senior Executives.” Startups and early stage companies often encounter difficulty recruiting an A-level senior executive. They often cannot pay top dollar and are willing to try something different to recruit that ideal man or woman to fill the pressing need in their organization. In that time of need, the company hires me, as one who knows what executives seek to devise a strategy and documents to get the best executive at the least cost and within the company budget. For a startup or early stage company, it is executive recruitment on a shoestring. In my work representing companies, my slogan is “Appear Generous. Demand Performance.” The strategy I develop and then the documents I prepare are radically different then most executive employment and equity documents. My documents do appear to be fair …even generous. And in recruitment, I help the company with its “sell” – telling executives, “Even at less base pay you will come out ahead with our package. And what’s more, this package reflects a culture where you will be valued and respected.” But we still demand performance. My documents are still employment at will and I make sure that a company can terminate a non-performer. But what is different is that my documents provide that if the executive does perform, he or she won’t be cheated out of what they earned. That element of basic fairness is so rare. In my presentation and slides, I discuss such issues as • Employment position and terms • Base pay and bonus structure • Tax favored equity structure • Fair equity terms and vesting • Reasonable equity rights • Reasonable termination protections • Fair severance terms Between the revolutionary terms I suggest, and our explanation and “sell” to the executive recruit, I have had a high success rate. Although we are often significantly outbid on the dollar figure, I often get my target man or woman for my company client. It is my hope that this article will be of benefit to CEOs and Company founders who are having difficulty in recruiting a high caliber C-level and senior executive for a role key to growth, and might want to think out of the box.... Feel free to share these slides. If you or any colleague of yours has a need in this area, please do reach out to me.

1 of 15
Download to read offline
© 2005, 2008, 2022 by Robert A. Adelson, Esq. 1
Building & Keeping Your Executive Team
How to Recruit and Retain
Senior Executives for Your
Startup or Early Stage
Company
ENET - Boston Entrepreneurs’
Network, May 17, 2022
Presented By:
Robert A. Adelson, Esq.
Adelson & Associates, LLC
101 Federal Street, Suite 1900
Boston, MA 02110
www.executiveemploymentattorney.com
© 2005, 2008, 2022 by Robert A. Adelson, Esq. 2
Robert A. Adelson, Esq. , Boston, MA
Business, Tax, Employment Attorney
Education and Experience Robert Adelson
 Northwestern Law School, Law Review, NYU, LLM in Taxation
 Corporate Attorney, Associate at Wall St. & Park Ave. NYC mega law firms
 Partner at Medium and Small Boston firms before founding his law firm
Clients: Founders, Start-ups & Early Stage companies
 Formation, Funding, Contracts, Employment, Trademarks/IP, M&A
 Boston Entrepreneurs Network, Chair, 2009-2019; Moderator/ speaker
20+ ENET meetings since 2000; Cruise director
 IEEE-USA Professional Achievement Award, 2016
Clients: VPs, C-level & Senior Executives and Consultants
 Job Offers, Equity, Executive Compensation, Retention, Severance, Non-
competes
 Website: www.executiveemploymentattorney.com
 30+ published articles in CEOWorld magazine -
http://ceoworld.biz/author/robert-adelson/
© 2005, 2008, 2022 by Robert A. Adelson, Esq. 3
Team Building on a Shoestring:
Thinking out-of-the-box to Recruit/Retain
In the early stage, the
successful entrepreneur
must be willing to jump
boldly: To use the tools
and resources available to
recruit the team needed.
Without that team, failure
is likely, so try …take the
jump to have a chance to
succeed.
“You can’t swim? …
Hell, the fall will kill
you!”
Butch Cassidy to Sundance (1969) –
image of Robert Redford, Paul Newman via art.com
© 2005, 2008, 2022 by Robert A. Adelson, Esq. 4
Team Building on a Shoestring:
Thinking out-of-the-box to Recruit/Retain
1. Conventional Methods to Recruit and
Retain the Team you really need
• Competitive Salary / Benefits
• Established place in the market
• Recognized company and team
2. The Challenge to Recruit in Early Stage
• ”Credibility Challenge” with no track record
• Enticing a leap from security to great risk
• Hard to give up day job – live on savings
• Great probability of failure, economic loss
© 2005, 2008, 2022 by Robert A. Adelson, Esq. 5
3. Using Early-Stage Mode - as Advantage
• Selling “the story” – capturing imagination
• Flexibility to build the company “your way”
• Chance to get in on ground floor, strike gold
• Working remotely / meet individual needs
4. Using Equity- Team Building “Toolbox”
• Restricted shares & QSBS
• Restricted stock units (RSUs & PSUs)
• Stock options- tax qualified (ISOs)
• Stock options -Non-qualified (NQSOs)
• Phantom stock
• Profits Interests in LLCs
Team Building on a Shoestring:
Thinking out-of-the-box to Recruit/Retain
© 2005, 2008, 2022 by Robert A. Adelson, Esq. 6
Team Building on a Shoestring:
Thinking out-of-the-box to Recruit/Retain

Recommended

Preparing Your Company for Investment
Preparing Your Company for InvestmentPreparing Your Company for Investment
Preparing Your Company for InvestmentRobert Adelson
 
6 Critical Items Every CEO Needs In His Or Her Employment Offer
6 Critical Items Every CEO Needs In His Or Her Employment Offer6 Critical Items Every CEO Needs In His Or Her Employment Offer
6 Critical Items Every CEO Needs In His Or Her Employment OfferRobert Adelson
 
AI Trends in Creative Operations 2024 by Artwork Flow.pdf
AI Trends in Creative Operations 2024 by Artwork Flow.pdfAI Trends in Creative Operations 2024 by Artwork Flow.pdf
AI Trends in Creative Operations 2024 by Artwork Flow.pdfmarketingartwork
 
PEPSICO Presentation to CAGNY Conference Feb 2024
PEPSICO Presentation to CAGNY Conference Feb 2024PEPSICO Presentation to CAGNY Conference Feb 2024
PEPSICO Presentation to CAGNY Conference Feb 2024Neil Kimberley
 
Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)contently
 
How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024Albert Qian
 
Social Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsSocial Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsKurio // The Social Media Age(ncy)
 

More Related Content

Featured

Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Search Engine Journal
 
5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summarySpeakerHub
 
ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd Clark Boyd
 
Getting into the tech field. what next
Getting into the tech field. what next Getting into the tech field. what next
Getting into the tech field. what next Tessa Mero
 
Google's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentGoogle's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentLily Ray
 
Time Management & Productivity - Best Practices
Time Management & Productivity -  Best PracticesTime Management & Productivity -  Best Practices
Time Management & Productivity - Best PracticesVit Horky
 
The six step guide to practical project management
The six step guide to practical project managementThe six step guide to practical project management
The six step guide to practical project managementMindGenius
 
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...RachelPearson36
 
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Applitools
 
12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at WorkGetSmarter
 
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...DevGAMM Conference
 
Barbie - Brand Strategy Presentation
Barbie - Brand Strategy PresentationBarbie - Brand Strategy Presentation
Barbie - Brand Strategy PresentationErica Santiago
 
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them wellGood Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them wellSaba Software
 
Introduction to C Programming Language
Introduction to C Programming LanguageIntroduction to C Programming Language
Introduction to C Programming LanguageSimplilearn
 
The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...
The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...
The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...Palo Alto Software
 
9 Tips for a Work-free Vacation
9 Tips for a Work-free Vacation9 Tips for a Work-free Vacation
9 Tips for a Work-free VacationWeekdone.com
 

Featured (20)

Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024
 
5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary
 
ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd
 
Getting into the tech field. what next
Getting into the tech field. what next Getting into the tech field. what next
Getting into the tech field. what next
 
Google's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentGoogle's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search Intent
 
How to have difficult conversations
How to have difficult conversations How to have difficult conversations
How to have difficult conversations
 
Introduction to Data Science
Introduction to Data ScienceIntroduction to Data Science
Introduction to Data Science
 
Time Management & Productivity - Best Practices
Time Management & Productivity -  Best PracticesTime Management & Productivity -  Best Practices
Time Management & Productivity - Best Practices
 
The six step guide to practical project management
The six step guide to practical project managementThe six step guide to practical project management
The six step guide to practical project management
 
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
 
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
 
12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work
 
ChatGPT webinar slides
ChatGPT webinar slidesChatGPT webinar slides
ChatGPT webinar slides
 
More than Just Lines on a Map: Best Practices for U.S Bike Routes
More than Just Lines on a Map: Best Practices for U.S Bike RoutesMore than Just Lines on a Map: Best Practices for U.S Bike Routes
More than Just Lines on a Map: Best Practices for U.S Bike Routes
 
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
 
Barbie - Brand Strategy Presentation
Barbie - Brand Strategy PresentationBarbie - Brand Strategy Presentation
Barbie - Brand Strategy Presentation
 
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them wellGood Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
 
Introduction to C Programming Language
Introduction to C Programming LanguageIntroduction to C Programming Language
Introduction to C Programming Language
 
The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...
The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...
The Pixar Way: 37 Quotes on Developing and Maintaining a Creative Company (fr...
 
9 Tips for a Work-free Vacation
9 Tips for a Work-free Vacation9 Tips for a Work-free Vacation
9 Tips for a Work-free Vacation
 

Building & Keeping Your Executive Team: How to Recruit and Retain Senior Executives for Your Startup or Early Stage Company

  • 1. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 1 Building & Keeping Your Executive Team How to Recruit and Retain Senior Executives for Your Startup or Early Stage Company ENET - Boston Entrepreneurs’ Network, May 17, 2022 Presented By: Robert A. Adelson, Esq. Adelson & Associates, LLC 101 Federal Street, Suite 1900 Boston, MA 02110 www.executiveemploymentattorney.com
  • 2. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 2 Robert A. Adelson, Esq. , Boston, MA Business, Tax, Employment Attorney Education and Experience Robert Adelson  Northwestern Law School, Law Review, NYU, LLM in Taxation  Corporate Attorney, Associate at Wall St. & Park Ave. NYC mega law firms  Partner at Medium and Small Boston firms before founding his law firm Clients: Founders, Start-ups & Early Stage companies  Formation, Funding, Contracts, Employment, Trademarks/IP, M&A  Boston Entrepreneurs Network, Chair, 2009-2019; Moderator/ speaker 20+ ENET meetings since 2000; Cruise director  IEEE-USA Professional Achievement Award, 2016 Clients: VPs, C-level & Senior Executives and Consultants  Job Offers, Equity, Executive Compensation, Retention, Severance, Non- competes  Website: www.executiveemploymentattorney.com  30+ published articles in CEOWorld magazine - http://ceoworld.biz/author/robert-adelson/
  • 3. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 3 Team Building on a Shoestring: Thinking out-of-the-box to Recruit/Retain In the early stage, the successful entrepreneur must be willing to jump boldly: To use the tools and resources available to recruit the team needed. Without that team, failure is likely, so try …take the jump to have a chance to succeed. “You can’t swim? … Hell, the fall will kill you!” Butch Cassidy to Sundance (1969) – image of Robert Redford, Paul Newman via art.com
  • 4. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 4 Team Building on a Shoestring: Thinking out-of-the-box to Recruit/Retain 1. Conventional Methods to Recruit and Retain the Team you really need • Competitive Salary / Benefits • Established place in the market • Recognized company and team 2. The Challenge to Recruit in Early Stage • ”Credibility Challenge” with no track record • Enticing a leap from security to great risk • Hard to give up day job – live on savings • Great probability of failure, economic loss
  • 5. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 5 3. Using Early-Stage Mode - as Advantage • Selling “the story” – capturing imagination • Flexibility to build the company “your way” • Chance to get in on ground floor, strike gold • Working remotely / meet individual needs 4. Using Equity- Team Building “Toolbox” • Restricted shares & QSBS • Restricted stock units (RSUs & PSUs) • Stock options- tax qualified (ISOs) • Stock options -Non-qualified (NQSOs) • Phantom stock • Profits Interests in LLCs Team Building on a Shoestring: Thinking out-of-the-box to Recruit/Retain
  • 6. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 6 Team Building on a Shoestring: Thinking out-of-the-box to Recruit/Retain
  • 7. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 7 5. Using Tax laws as Your Friend • Capital Gains or even No Tax! (QSBS) • Tax Deferral of Accumulated Income • Stock Appreciation Rights • Protection of Phantom Gains 6. Leveraging the Future- “to strike gold” • Fair market valuation for tax purposes • R0I valuation- for market • Strategic entity growth • Payback in non-cash equivalence Team Building on a Shoestring: Thinking out-of-the-box to Recruit/Retain
  • 8. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 8 7. Comp terms used for maximum mileage • Signing bonus- equity, returnable arrangements • 120AFR loans to pay for equity or taxes • Base salary- deferral options • Performance bonus- payment vs. payback 8. Employment terms - “Good Vibrations” • Position, platform, and launching pad • Authority, support, reciprocal commitment • Outside affiliations- showing trust and growth • Expense reimbursement, employee advances • Benefits- outside group plans • Reciprocal termination provisions • Targeted restricted covenants Team Building on a Shoestring: Thinking out-of-the-box to Recruit/Retain
  • 9. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 9 Building Value on firm Foundation Appear Generous but Demand Value SM Patriots’ VP player personnel Scott Pioli and coach Bill Belichick with Lombardi trophy for Super Bowl XXXIX. Photo via boston.com. “The Patriots financial savvy is at the top of the 10 reasons why the team has ruled the league this decade.” Sports Illustrated, p. 81 In the early stage, the successful entrepreneur wants to be fair. To offer real equity and real opportunity to those willing to share the risks in early stage. Yet, nothing is “given”. All must be earned. Seeking value imperative - to build for long term.
  • 10. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 10 Building Value on firm Foundation Appear Generous but Demand Value SM 1. Vesting Arrangements- firm hand on tap • Vesting based on service and loyalty • Vesting on individual performance, achieving targets • Vesting based on company performance 2. Getting Equity Back – even after vesting • Protection for the company when needed • Employment termination – need for replacement • Bad boy provisions – penalty for breaching • Death, disability vs. divorce or bankruptcy • Allowing employee to retain equity when earned
  • 11. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 11 Building Value on firm Foundation Appear Generous but Demand Value SM
  • 12. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 12 3. Calibrating Vesting with Stock Rights • Rights in stock • Rights in options • Liquidity rights and cash exit • Durability of stock and options • Built in value in stock and options 4. “Success Events” - Giving a stake in the future • Acceleration of vesting • Incentivizing employees with company success • Making employee feel a part of company success Building Value on firm Foundation Appear Generous but Demand Value SM
  • 13. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 13 5. Asset Transfers – Real Company ownership • Assignment of Inventions • Employee licenses of technology • Equipment transfers • Company ownership rights 6. Restricted Covenants- Real Company Rights • Non Competition Agreements • Non-solicitation of clients, suppliers, employees • Non-disclosure-confidentiality agreements • Trade secret protections, internal protections Building Value on firm Foundation Appear Generous but Demand Value SM
  • 14. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 14 7. Allocating Equity- Discipline of Dividing the Pie • Setting aside equity for future players • Limiting yourself to 100% company • Using and scheduling all resources at hand 8. Good Dilution and Bad- “Stand and Deliver” • Value added, good dilution: to feed growing company • True-up Adjustments when needed • Downward Spiral- watch out • Vigilance over investment terms • Participating preferred, full ratchet, VC nightmares • Minority control by venture backers Building Value on firm Foundation Appear Generous but Demand Value SM
  • 15. © 2005, 2008, 2022 by Robert A. Adelson, Esq. 15 Thank You! Robert A. Adelson, Esq. Adelson & Associates, LLC 101 Federal Street, Suite 1900 Boston, MA 02110 Phone: (617) 875-8665 E-Mail: rob@attorneyadelson.com www.executiveemploymentattorney.com