Lecture Entrepreneurship: Chapter 7 - Zacharakis, Bygrave, Corbett

BUI LDI NG  THE 
FOUNDI NG  TEAM
Chapt e r   7


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 ©

2


THE  ADVANTAGES  OF
A  TEAM

Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley,
2017 ©

3


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 ©

4


STAFFI NG  PLAN

Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley,

2017 ©

5


BUI LDI NG  A  POWERFUL  TEAM

Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley,
2017 ©

6


RESOURCES  FOR  CREATI NG
THE  TEAM

Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley,
2017 ©

7


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 ©

8


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 ©

9


THE  DI LUTI ON  EFFECT:  
AN  EXAMPLE
Famil
y/
Frien
ds

Even
t

Entr.
Share

CoFound
er

1

60%

40%

2

48%

32%

20%

3

22%

14%

9%

40%

15%

4

8%

5%

3%

15%

6%

10%

3%

7%

43%

5

5%

4%

2%

10%

4%

7%

2%

5%

29%

6

5%

4%

2%

10%

4%

7%

2%

5%

$9,90
5

$3,71
4

$6,66
7

$2,000

$4,66

7

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
0

$1,60
5

29%

32%

100%

$100,0
00

$5,34

9

$28,5
71

$33,3
32

VC Rd
1

VC Rd
2

100%

Harvest Value for All Stakeholders
Harvest

$5,34
9

$3,566

Total

$2,22
9

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 ©

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