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Building your Team 
This presentation is made possible by the support of the American People through the United States Age...
Building your team 
• People are absolutely your most important asset 
• VCs name Team as the #1 Risk Factor 
• The people...
Who is your “team”? 
• Investors 
• Board of Directors 
• Co-founders 
• Your executive staff 
• Board of Advisors (option...
Investors 
• Passive vs. Active 
• Passive investors have no active 
roll in the company 
– Friends and family 
– Accelera...
Active investors 
• Once they fund you, you’re married for life – you can’t fire 
them 
• Many companies fail here 
– The ...
Board of Directors 
• Shareholders own the company 
• The board are their representatives 
• CEO reports to the board 
– T...
Co-founders 
• It’s OK to hire your friends 
– Knowledge and trust 
– As employees, not co-founders 
• Be very cautious ab...
Board of Advisors 
• Set up to Advise the company 
• Part time experts to help in 
their own vertical 
– Engineering, Stra...
Board of Advisors Expectations 
• Expect them to put in 2-4 hours/month 
– Advisory meetings and calls, make introductions...
Service Providers 
• Professionals that provide assistance in 
return for fees 
– Attorneys 
• Corporate 
• IP, Patent, Tr...
Hiring Engineers 
• Let your engineering team find the 
engineers 
– They’re building they’re own team 
– Need to respect ...
Hiring Sales, Marketing, Business Development 
• These are all social creatures 
• Get to know their 
personalities and wo...
Hiring Finance and Operations 
• Needs to be your solid 
backbone 
• Trust above all else 
• Research their 
backgrounds. ...
Common Stock Ranges 
These are rough ranges – not bell curves – 
For new hires once a company has raised its Series A. 
CE...
After the job offer 
• Continue to convince the candidate that your 
company is the one they should join 
– Investors shou...
End Result 
• A happy and productive team
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2.1 building your team

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2.1 building your team

  1. 1. Building your Team This presentation is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this presentation are the sole responsibility of Rick Rasmussen and do not necessarily reflect the views of USAID or the United States Government.
  2. 2. Building your team • People are absolutely your most important asset • VCs name Team as the #1 Risk Factor • The people you hire set the corporate culture – How team thinks, feels and acts – Provide a framework for behavior – Set them free and they’ll do great things
  3. 3. Who is your “team”? • Investors • Board of Directors • Co-founders • Your executive staff • Board of Advisors (optional) • Service Providers – Attorneys, Accountants, Recruiters, PR firms, Outsourcers… Investors Board Advisors Exec Staff Team Service Providers You Co-founders
  4. 4. Investors • Passive vs. Active • Passive investors have no active roll in the company – Friends and family – Accelerators – Some angels • Active – Most investors want to “actively manage” the money they placed with you – Who is on the board and who is not? – Day-to-day advisorships Investors Board Advisors Exec Staff Team Service Providers You Co-founders
  5. 5. Active investors • Once they fund you, you’re married for life – you can’t fire them • Many companies fail here – The separation between the objectives of the founders and the objectives of the investors – Long term vs. short term • Watch out if: – They’ve never done a startup – Don’t know the technology – Don’t know the market
  6. 6. Board of Directors • Shareholders own the company • The board are their representatives • CEO reports to the board – Their sole role is to hire and fire a CEO • Typically an odd number (3, 5, 7) to break tie votes • Chairman is optional and honorary – Founder does not automatically become chairman • There is an art to managing your board – Constant communication is key Investors Board Advisors Exec Staff Team Service Providers You Co-founders
  7. 7. Co-founders • It’s OK to hire your friends – Knowledge and trust – As employees, not co-founders • Be very cautious about declaring a co-founder – They believe they are equals – They will expect certain rights – Firing is extremely difficult • Co-founders dilemma • Situations that often happen – What if something goes wrong? – What if they want to leave – What if they contribute less than you? Investors Board Advisors Exec Staff Team Service Providers You Co-founders
  8. 8. Board of Advisors • Set up to Advise the company • Part time experts to help in their own vertical – Engineering, Strategy, Finance, Legal, Business Development – Entrepreneurs that are looking to give back • People argue about the worth of advisory boards – Don’t do it for the sake of adding “names” – If you have advisors, take full advantage Investors Board Advisors Exec Staff Team Service Providers You Co-founders
  9. 9. Board of Advisors Expectations • Expect them to put in 2-4 hours/month – Advisory meetings and calls, make introductions, strategic advice – Not expected to write business plans, presentations, travel • Typically compensated through stock – 0.25% is normal. – Up to 1.0% if a luminary but must really contribute – Have them vest from 1 to 4 years
  10. 10. Service Providers • Professionals that provide assistance in return for fees – Attorneys • Corporate • IP, Patent, Trademark • Employment, Visas – Accountants – Recruiters – PR • First consultations often free – Can defer compensation until first funding event • A great source of referrals to Angels and VCs • Watch out for the Partner  new grad swap Investors Board Advisors Exec Staff Team Service Providers You Co-founders
  11. 11. Hiring Engineers • Let your engineering team find the engineers – They’re building they’re own team – Need to respect the work style of any new recruit – Talent but also philosophy • There will be a tendency to want to overpay • You have the final say
  12. 12. Hiring Sales, Marketing, Business Development • These are all social creatures • Get to know their personalities and work styles • Research their social media profiles • Get them out of the office for extensive interviews
  13. 13. Hiring Finance and Operations • Needs to be your solid backbone • Trust above all else • Research their backgrounds. • Strong reference checks.
  14. 14. Common Stock Ranges These are rough ranges – not bell curves – For new hires once a company has raised its Series A. CEO 5 – 10% COO 2 – 5% VP 1 – 2% Independent Board Member 1 – 2% Director 0.4 – 1.25% Lead Engineer 0.5 – 1% 5+ years experience Engineer 0.33 – 0.66% Manager or Junior Engineer 0.2 – 0.33% Stock should always vest for 2-4 years, even for founders.
  15. 15. After the job offer • Continue to convince the candidate that your company is the one they should join – Investors should ask them to take calls with candidates – Ask mutual connections to ‘backchannel’ them to hype up your company – If there are doubts, consider starting the person as a contract-to-hire until he's ready to make a decision
  16. 16. End Result • A happy and productive team

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