Based in Silicon Valley, Dr. Burton Lee lectures on European Entrepreneurship and Innovation in the Stanford School of Engineering, where he is considered one of Silicon Valley’s leading experts on the European innovation ecosystem, startup and venture finance, corporate and university innovation, and government innovation policy scenes. While at Stanford, over the past seven years he has successfully developed and executed partnerships with European national and regional governments, venture finance organizations and industry in Sweden, the United Kingdom, Denmark, Italy, Finland, Norway, Ireland, France, Spain, Romania, Bulgaria and Estonia. Dr. Lee concurrently serves as Managing Director of Innovarium Ventures, a financial, technical and strategic advisory services firm with technology startup, angel investor, venture capital fund, university, corporate and national and regional government clients in Europe, Latin America and the USA. Current/recent advisory engagements include DG CONNECT – European Commission (Brussels), UniCredit Bank Austria (Vienna), Sofia Tech Park (Bulgaria), the Gdansk Metropolitan Authority (Poland), the German Silicon Valley Accelerator, Ireland’s University of Galway (NUI Galway), Denmark’s Midt Jutland Region and Aalborg University, the Universidad de los Andes Engineering School (Bogota), as well as the TIVIT ICT Industry Association (Finland), the CETICS ICT Industry Association (Colombia), and the CAPATEC Chamber of Commerce of Technology Companies (Panama). Burton’s professional history encompasses 15+ years entrepreneurial, investment and senior executive leadership and advisory experience in venture-backed technology startup companies; venture capital and private equity funds; angel investor networks; global technology corporations (Daimler, HP and General Electric); federal S&T agencies (NSF, NIH and NASA); the European Commission (serving as a Horizon2020/FP7 expert evaluator and advisor on Horizon2020 programs); research universities, and national and regional governments. He is a researcher and frequent conference speaker and media commentator on the US and European entrepreneurship, innovation ecosystems, university reform, regional economic development, venture finance, university commercialization, social media and product design scenes. In 2007, he co-founded Space Angels Network, the leading source of seed-stage capital for space and aviation-related startups. Dr. Lee holds a PhD in Mechanical and Electrical Engineering from Stanford, and an MBA in Finance and Entrepreneurship from Cornell University.

1. #STARTUPADDVENTURE
DR BURTON LEE PhD MBA
STANFORD UNIVERSITY
INCENTIVIZING TOP TALENT
TO JOIN YOUR STARTUP

2. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
246
How$do$companies$in$Silicon$
Valley$build$incentives$for$
founders$and$employees$into$
the$growth$system$of$their$
operations$??

3. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
247
What%can%European%
startups%can%learn%
from%them%??

4. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
How$Silicon$Valley$Thinks$About$Incentives$for$
Startup$Founders$&$Employees
• Critical*to*future*growth*of*company*
• Alignment*of*incentives*with*business*goals*
• Attract*and*retain*new*employees*
• Build*strong*and*cohesive*teams*
• Support*creation*of*proper*company*culture*
• Empowerment*
• Building*the*local*startup*&*investor*ecosystem*
culture*&*knowledge*base
Apr*20*2015
248

5. Copyright*2015*Burton*H.*Lee*and*Innovarium*Ventures*|*Silicon*
Valley
Map$of$Presenting$Speaker$$
Nationalities
European$Entrepreneurship$&$$
Innovation$@$Stanford$Engineering$
(ME421)$
Winter$2014$–$Year$Six
Enterprise$Estonia$
Silicon$Valley
Ghent,%Flanders%Region%
Belgium
iMinds$ICT$Research$Institute
Apr*20*2015
249

6. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
February 10 @ Stanford Engineering
Jeff Lynn, Seedrs (UK) & Matija Kopic, Farmeron (HR)
Apr*20*2015
250

7. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
January$27$@$Stanford$Engineering$
Vassil$Terziev$&$Japec$Jakopin
Apr*20*2015
251

8. Mentoring$Croatian$&$SEE$Startups$at$Geek$Business$Camp,$
Brown$Forum,$Osijek,$April$2015

9. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Osijek$Startup$Teams
Often$Missed$These$Key$Issues
• Poor*team*cohesion*
• Confusion*over*who*is*‘Founder’,*‘CoRFounder’*
• 1*founder*+*employees*??*
• Uneven*engagement*and*energy*across*team*members*
• Major*disconnects*between*technical*and*sales/
marketing*teams*
• ‘Employees’*vs*critical*members*of*the*team*
• Insufficient*recognition/titles*that*do*not*reflect*real*
role*and*degree*of*responsibility*
– Usually*too*low*(“Project*Assistant”*vs*‘VP,*Sales’*or*‘CMO’)
Apr*20*2015
253

10. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
254
A$one$man$
show??
or%A%Solid%Team%
that%can%
Work%under%Stress,%
Pivot%and%Grow?

11. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
How$Silicon$Valley$Thinks$About$Incentives$for$
Startup$Founders$&$Employees
• Critical*to*growth*of*company*
• Alignment*of*incentives*with*business*goals*
• Attract*and*retain*new*employees*
• Build*strong*and*cohesive*teams*
• Support*creation*of*proper*company*culture*
• Empowerment*
• Building*the*local*startup*&*investor*ecosystem*
culture*&*knowledge*base
Apr*20*2015
255

12. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Different$Startup$Environments
Silicon$Valley
• FastRmoving*markets,*
competition*&*companies*
• Rapid*growth,*rapid*failure*
• Strong*competition*for*talent*
(technical,*sales,*etc)*
• High*mobility*of*talent*
between*companies*
• Work*6R7*days/week,*12R14*
hour*days*
• Strong*stock*options*legal*
regime,*tax*policy,*culture*
• Higher*startup*valuations*
• Frequent*company*exits
Europe
• Slower*markets*&*decisionRmaking,*less*
competition*
• Less*competition*for*talent*
• Little*mobility*of*people*between*
companies*
• Most*employees*seek*secure*job,*salary*
&*benefits*
• Work*5*days/week,*8*hours*
• Stock*options*are*viewed*with*suspicion,*
only*for*senior*execs*
• No*or*poor*legal*regime*for*stock*options*
• Lower*startup*valuations*
• Slow*exits*market
Apr*20*2015
256

13. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Typical$Startup$Employee$Incentives
Silicon$Valley
• Stock*options*
• Company*culture*(fun,*
energy,*engagement,*
change*agent)*
• Title*&*recognition*for*
work*performed/success*
• Promotion*&*challenges*
• Salary*
• Perks*(food,*play,*services)*
• Benefits*(health,*etc)
Europe
• Salary*
• Title*
• Promotion*
• Perks*
• Benefits
Apr*20*2015
257

14. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Apr*20*2015
258
Stock$Options
for$Startup$Employees

15. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Apr*20*2015
259

16. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Apr*20*2015
260

17. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Apr*20*2015
261

18. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Apr*20*2015
262

19. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Apr*20*2015
263

20. Copyright*2015*Burton*H.*Lee*and*
Innovarium*Ventures*|*Silicon*
Valley
Stock$Options$for$Startups
• Get*the*founders’*stock*arrangements*right!**
• Establish*an*overall*game*plan*for*equity*
incentives**
– Establish*a*stock*option*plan*with*an*established*
reserve**
– Plan*should*be*geared*for*anticipated*headcount*
growth*over*a*12R18*month*period**
• A*stock*plan*is*a*formal*written*document*
approved*by*the*board*of*directors*and*the*
shareholders
Apr*20*2015
264

21. Stock$Options
for$Startup$Employees

22. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
266

23. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
267

25. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Silicon$Valley
Leaders$in$Company$Culture
Apr*20*2015
269

26. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
270
Leaders$in$
Creating$Strong$
Company$Culture$
in$Europe

27. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
271

28. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Key$Takeaways
• Stock*Options*for*Founders*&*Employees*
– USA*is*probably*best*place*to*establish*legal*‘home’*due*(in*part)*to*presence*of*
strong*system*for*founder*&*employee*stock*options*plans*
– Easiest*to*issue*options*to*European*employees*from*US*plans*
– Very*well*understood*by*US*law*firms*–*check*your*national*tax*laws*
• Company*culture*
– Key*to*future*growth*of*company*
– Founders*should*think*about*culture*early*on*
• Titles*
– Pay*early*attention*to*titles*!!**
– Public*recognition*for*team*contributions*
– Poor*titles*send*strong*signals*to*team,*customers*&*investors*about*how*
founders*view*colleagues*and*future*growth*
Apr*20*2015
272

29. Copyright*2015*Burton*H.*Lee*and*Innovarium*
Ventures*|*Silicon*Valley
Apr*20*2015
273

30. THANK$YOU$!!
Dr.$Burton$Lee$
European*Entrepreneurship,*Stanford*Engineering*
www.StanfordEuropreneurs.org$|$@Europreneurs