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BUILDING THE FOUNDING TEAM

7. BUILDING THE FOUNDING TEAM. Learning Objectives . Explain how to effectively build a founding team. Understand how to work with professional advisers. Discuss when to add a board of directors.

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BUILDING THE FOUNDING TEAM

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  1. 7 BUILDING THE FOUNDING TEAM

  2. Learning Objectives • Explain how to effectively build a founding team. • Understand how to work with professional advisers. • Discuss when to add a board of directors. • Compare and contrast the pros and cons of outsourcing with independent contractors versus hiring employees.

  3. The Entrepreneur’s Network Figure 7.1

  4. Creating the Founding Team • There are benchmarks for an effective team. • Special circumstances: • Special Issues for High-Tech Teams • Unique Issues Surrounding Virtual Teams • Founding Teams for International Ventures • Rules for Friends and Families

  5. Seeking Professional Advisers • Outsourcing solutions for professional help: • Attorneys • Accountants • Bankers • Insurance agents • “As-needed” assistance for information, assistance in reviewing business concept, and reality checks

  6. Seeking Personal Advisors • Building a board of directors • Advisory Board • The Mentor Board • Mistakes to Avoid • All team members should have the required experience and qualifications, and the same goals for the business. • Avoid using only family and friends. • Only give stock incentives after an individual has proven him or herself.

  7. Board Members and the Business Life Stage Figure 7.2

  8. Mistakes to Avoid • Equity distribution: it is important to clearly understand what each team member is contributing and value it appropriately. • Buy-sell agreement: used to prevent an owner from selling his/her interests in company without consent of the other owners and to determine what happens should owner leave the business.

  9. Outsourcing with Independent Contractors • Independent contractors (ICs) own their own businesses and are hired by the entrepreneur to do a specific job. • Including: consultants, manufacturers, distributors, employee leasing firms, and professional advisers. • Hidden costs

  10. The IRS and Independent Contractors • Law of Agency: • Defines the terms employee vs. independent contractor. • Ensure compliance with IRS regulations

  11. Types of Independent Contractors • Consultants • Professional employer organizations (PEOs) • Manufacturing support • Sales support

  12. New Venture Action Plan • Identify the members of the founding team or at least the expertise needed to start the venture. • Determine what expertise is missing from the management team and how you will supply it. • Begin asking questions about potential professional advisors, such as an attorney or accountant. • Determine whether you will need a board of directors, an advisor board, or a mentor board. • Identify at least one type of independent contractor that the new venture could use.

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