May 4-5 2008
Moscone Center
San Francisco, CA

ExecComp

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Noam Wasserman's blog http://founderresearch.blogspot.com/

Most startups divide equity using formula: ownership = (Num people in room) / 100%

It's assumed that most startups begin their companies with:

  1. no funding
  2. sweat equity only

Option pool's are generally 20%, and used to bring in employees after the founding members.

One possibility is to use a "trial period" in which the founder, and "potential founder" work together for a short period (~1 week) to evaluate compatability, then to decide on what each person will commit to.

How to find Business Development people:

  1. craigslist? con: draws too wide an audience
  2. LinkedIn? pro: people are validated by your friends
  3. "friends of developers I know"? pro:
  4. customers? pro: if they believe in the product, they will want to help you.
  5. Commonwealth Club
  6. Chruchhill Club
  7. Silicon Valley SCORE

DFJ Stanford Entrepreneurial Thought Leaders Program http://etl.stanford.edu/ is a good resource: attend sessions, meet people there,

NWasserman: Do you want to be rich or do you want to be king?

VC's tend to invest in people, not ideas or tech, so -getting- the right people on the team may be critical to finding the way forward.

What about starting a business with a friend or spouse?

  • generally working with friends is dangerous!
  • friends tend to not honestly assess each other's contributions
  • your company or your friend? your company or our spouse?
  • Apple was started by three college friends, Cisco was started by husband/wife team.

Typical Post A-round breakdowns: CEO: 10% VP Marketing: 3-5% VP Sales: 7-10%

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