BUSI 701Artistic Entrepreneurship

Class 6

Building the Team

Hawkins cultureKhosla team

Kawasaki soulmates

Go or No-Go?

Vernon’s Razor

Go or No-Go?

Team

• The #1 to mitigate risk in a new venture: proven team

• Most VCs have “team” as #1 ingredient

• Can you answer: Why you?– (Not being an expert is a management problem)

Why You?

• Google search:“Are you an entrepreneur quiz”

Attributes of Entrepreneurs

Khosla risk video

How to Attract VCs Article• Passion• Tenacity• Flexibility• Commitment• Teamwork• Coachability• Knowledge

“How to Attract VC investors” by Jim Casparie

If team is #1, then demonstrating these attributes

should be a high priority.

Team – Vernon’s Razor

• Management risk is #1, so building a team should be #1

• Share, share, share

• Don’t over-protect your idea– Protecting idea vs. #1 team

Team – Develop Your Network

• Good news: talented people like meeting talented people

• Play the student card

• E.g., on the Challenge executive summary application, you’ll be asked who has helped you and how

Developing your Network• Advisors/Mentors• Professional services, particularly lawyers• Investors• Partners• Customers• Suppliers• Service providers

Keyword: networking

Co-Founders

• Diversity of skill sets

• Discuss ownership up front

• Have an equity plan based on:– Money investment– Time investment– Long-term commitment– Value to firm

• Don’t use 50/50 default

Entrepreneur’s Guide Article

Qualities of Co-Founders

Essential Qualities of a Startup Company Team

Why Have Two Founders?(Not all of team are founders)

Get a great partner video.

Early On• Not everyone is a “co-founder”

• Consultants (paid) and advisors (unpaid)

• Incentives for early employees– Equity– Stock options– Deferred salary– Culture of new venture– “Ownership” of their piece of the pie

Kawasaki video (4:30)

Harness the Power of Advisors

• No business is too small

• Management “think tank”

• Where to find:– Recently retired executives (SCORE)– Business people you admire; aim high– No harm in asking

• Regular meetings (maybe quarterly)

“Harness the Power of an Advisory Board” by Susan Ward,

Keyword: networking

Evaluating the Team – Mullins

• Ability

• Personality

• Connectedness

Source: Mullins New Business Road Test

Team – Ability

• What are the few critical success factors (CSFs) in your industry?

• How can you validate that you have identified them correctly?

• How can your team demonstrate their ability to execute the CSFs?

• What are the missing links?

• Sales orientation? Source: Mullins New Business Road Test

Team – Personality• Mission

• Aspirations

• Risk

• To work for yourself?• To build something small or big?• Is the passion really there?• Will you risk the security of a job and a salary?• Will you risk losing control of your venture?

Source: Mullins New Business Road Test

Hawkins, passion

Connectedness

• Suppliers

• Customers

• Competitors

Source: Mullins New Business Road Test