1. Chapter 8
The Founding Team

2. Overview The founding team Professional advisers Board of directors
Outsourcing with independent contractors
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3. Advantages of a Founding Team
Intense effort of start-up shared
Less likely to abandon
Proceed further when all functional areas covered
Provides more credibility for new venture
Information analysis and decision-making is improved
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4. The Entrepreneur’s Team

5. Characteristics of an Effective Team
Expertise covers the key functional areas of the business: finance, marketing, operations
Someone has experience in the industry
Good credit ratings
Solid industry contacts with sources of capital
Passionate about the business
Have time to spend on the business
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6. Professional Advisors
Attorney—advocate
Accountant—not an advocate
Banker
Insurance Broker
Boards of Directors
Boards of Advisors
Personal Board
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7. Functions of Board of Directors
Select and hire or fire the CEO/senior manager
Nominate directors
Audit the company’s records
Review performance against projections
Prepare and monitor the strategic plan
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8. Functions of Board of Directors (cont.)
Approve sale of assets, major acquisitions
Monitor compliance
Declare dividends
Step in, in times of crisis
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9. Mistakes to Avoid When Forming a Team
Forming team casually
Including team members with different goals
Using only insiders
Using family members as professional advisors
Giving founding team all stock in lieu of salary
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10. Outsourcing Raw Materials Supplier Manufacturer Raw Materials
Virtual
Company
Manufacturer
Supplier
Distributor
Retailer
Retailer
Retailer
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11. Using Independent Contractors
A worker is an employee if s/he...
Must follow your instructions
Receives training from you
Cannot hire, supervise, or pay own assistants
Has a continuing relationship
Must follow set hours of work
Works only for you
Must submit regular reports & is reimbursed
Relies on your tools and materials
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12. The Virtual Entrepreneurial Company

13. Take-Aways
List what students took away from the discussion in real time
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