Chapter 7 - Building the founding team. This chapter takes the view that the process undertaken in developing a tight, well-written story is the most important thing. Furthermore, our research indicates that students who write a business plan, even if it is for an entrepreneurship class, are far more likely to become entrepreneurs than students who haven’t written a business plan.
BUI LDI NG THE FOUNDI NG TEAM Chapt e r ENTREPRENEURSHI P I S A TEAM SPORT • • Grow beyond self-employment with the support of a team Team can include partners, employees, advisors, family, vendors, investors • Accomplish more with others than you can alone • The power of a team is its shared vision of success Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © THE ADVANTAGES OF A TEAM Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © CONSI DERI NG YOUR ROLE • • • • What position can you best fill? What is the best way for you to contribute to your venture’s success? Don’t be crippled by your weaknesses… but also don’t be oblivious to them either Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © STAFFI NG PLAN Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © BUI LDI NG A POWERFUL TEAM Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © RESOURCES FOR CREATI NG THE TEAM Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © THE DO NOTS OF DOUBLE EMPLOYMENT • • • • Do not use your employer’s resources Do not expropriate intellectual property from your current employer Do not solicit your employer’s customers until you quit the job Do not conceal the fact that you are founding your own venture Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © TYPES OF COMPENSATI ON Compensation name Advantages Disadvantages Founder Shares Attracts co-founders Dilutes owner’s equity Option pool Ties employees goals to those of the company Employees may leave the company if the price falls Restricted stock Issued regardless of Vested over time, company performance, expensed at current share exercised when price price increases Stock appreciation rights Low cost to the company Dilutes owner’s equity Phantom stock Employees receive no equity Requires cash to be exercised Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © THE DI LUTI ON EFFECT: AN EXAMPLE Famil y/ Frien ds Even t Entr Share CoFound er 60% 40% 48% 32% 20% 22% 14% 9% 40% 15% 8% 5% 3% 15% 6% 10% 3% 7% 43% 5% 4% 2% 10% 4% 7% 2% 5% 29% 5% 4% 2% 10% 4% 7% 2% 5% $9,90 $3,71 $6,66 $2,000 $4,66 Angel s Optio n Pool CEO CFO VP Sales Valuati on (000) Ent’s Value 100% $1,000 $480 100% $2,500 $540 100% $7,000 $562 32% 100% $30,00 $1,60 29% 32% 100% $100,0 00 $5,34 $28,5 71 $33,3 32 VC Rd VC Rd 100% Harvest Value for All Stakeholders Harvest $5,34 $3,566 Total $2,22 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © 10 EXTERNAL TEAM MEMBERS Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © 11 PROBLEMS FACED BY START UP TEAMS Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 â 12 RECAP Entrepreneurship is a team sport • Determine who should be on the team • Create a culture so that team can flourish • Maintaining a team is an ongoing effort Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017 © 13 ... of success Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 20 17 © THE ADVANTAGES OF A TEAM Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 20 17 © CONSI DERI... oblivious to them either Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 20 17 © STAFFI NG PLAN Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 20 17 © BUI LDI NG A ... POWERFUL TEAM Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 20 17 © RESOURCES FOR CREATI NG THE TEAM Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 20 17 © THE