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Build your Founding Team


Building a Founding Team

So you have an idea – should you build a team of cofounders?  Or go it alone?  And how do you compensate cofounders (and/or early employees) if you have no (or not much) money?

The Startup Genome Project found that startups with a team (better yet – startups with a balanced team; a team that wasn’t 100% developers) are more likely to succeed.

Managing a Startup Team

A startup cannot afford team members that are not a fit and who are not contributing.  Choose team members carefully.  Perhaps try a trial period.  And if it isn’t working, it’s much better to correct the situation by making a change earlier instead of later!

Diversity is Good

Another thing to think about is diversity.

You’re probably most comfortable around people like you.  Following that tendency is a big mistake in a startup.  If you’re the lead techie, you might need a very different type of person to lead sales.  And finance.  Finding people who fit your company’s culture – that’s critical.  But don’t make the mistake of hiring a bunch of clones of yourself!  You need different skill sets, different personalities, and different points of view!

Compensation and the Early Stage Startup

There are not a lot of guidelines for startup compensation models.  A lot of it comes down to putting together a win-win model that on the one hand is compatible with the realities of the company’s cash-flow today, and on the other hand is a win for everybody if revenue ramps (and the stock has value).

When the company is pre-revenue and has not received any investment funding, it’s certainly typical for the founding team to not take any salary at all.  But when you hire employees – employees need to be paid (state law says so).  So you should check with an attorney or with a human resource professional to make sure you set up your compensation structure in a way that’s legal!

Stock is often a key component of a startup compensation plan.  Be sure to review some of the founders-stock considerations in the Founders Stock section of the Road Map.