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Building Teams

Page history last edited by Marc Freedman 4 years, 8 months ago

  1. Overview
  2. Team members
  3. The basics
  4. Find partners or staff
  5. Manage & pay virtual team
  6. Recruiting
  7. Giving equity
    1. Equity Calculators
  8. Culture

 

Short link http://bit.ly/BlueBuildTeams

 

Overview

Once you have a startup concept, your next task is Building your team.  It's critical for many reasons. 

  • It allows you to focus on building the business as opposed to executing programs.
  • One person simply can't do it all in terms of volume of work.
  • Most founders have limited functional expertise.  Are you an expert product manager, programmer, marketer, AND accountant?
  • Virtually all investors require two, if not more, partners

 

Team members

The Team can include different types of members.

  • Partners who are given an equity position or other compensation
  • Advisors who provide strategic value
  • Volunteers who will be future customers or staff 

 

The basics

  • Turn first to your personal network - current and previous business associates, friends, and other contacts - for candidates and referrals
  • LinkedIn is the world's largest professional database. 
    • Broadcast your needs to your current connections. 
    • Search to target ideal candidates or well-placed referral sources.  
    • Use your connections for personal Introductions
  • Local groups and events are a strong, personal channel for finding team members.

 

Find partners or staff

 

Manage & pay virtual team

 

Recruiting

 

Giving equity

 

  • A No B.S. Guide to Startup Stock Option Grants
  • How to allocate ownership of a growing startup. Joel Spolsky talks about stripes for hiring periods with a suggested 50% stripe for investors and 10% stripes for each period (typically a year) of hiring thereafter.
  • Equity for Early Employees in Early Stage Startups by @TonyKarrer
  • Employee Equity: How Much? by Fred Wilson.  Wilson notes that are 3 types of employees.
    1. Co-Founders    . He doesn't address them.
    2. First Hires. "For your first key hires, three, five, maybe as much as ten, you will probably not be able to use any kind of formula. Getting someone to join your dream before it is much of anything is an art not a science. And the amount of equity you need to grant to accomplish these hires is also an art and most certainly not a science. However, a rule of thumb for those first few hires is that you will be granting them in terms of points of equity (ie 1%, 2%, 5%, 10%)."
    3. Follow-on hires. He uses a formula that assigns staff to brackets (his are below).  "You multiply the employee's base salary by the multiplier to get to a dollar value of equity. Let's say your VP Product is making $175k per year. Then the dollar value of equity you offer them is 0.5 x $175k, which is equal to $87.5k. Let's say a director level product person is making $125k. Then the dollar value of equity you offer them is 0.25 x $125k which is equal to $31.25k. Multipliers by bracket:
    • Senior Team: 0.5x
    • Director Level: 0.25x
    • Key Functions: 0.1x
    • All Others: 0.05x
  • How to think about cash vs. equity compensation by Jason Cohen
  • Changing Equity Structures for Early Startup Employees by Ben Yoskovitz
  • VentureHacks Series A Option Pool Ranges - see chart below

 

Equity Calculators

 

Culture

  • Just say No.  Trust in your staff and know they make the right decision 99% of the time.  Just say No to Useless Brilliance,  Policy Paralysis, Values Dilution,  and Executive Dysfunction.

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