Founder Agreements and Stock Vesting – Building a Team, Protecting yourself, Managing expectations, February 3, 2015
Tomorrow night, Tuesday February 3, 2015 at 7pm, The Boston Entrepreneurs’ Network (ENET) will present a panel on this subject for at the group’s Waltham location: Constant Contact, 1601 Trepalo Rd., 1st Floor, Innoloft, Waltham, Massachusetts (Exit 28, I-95/Route 128).
How do you find co-founders? How do you recruit a core team? You guessed it – networking. That includes trade groups like ENET but also your own personal network. There are also groups that provide matching making for co-founders. But you do want to be careful. Joining with a co-founder is like going into a marriage. You could spend years and go through much of your money, and you need to both trust and respect your co-founder to share that with you. So, it’s best not to just jump in bed but rather get to know your co-founder for months before or perhaps prior work experience.
Even then you still want to protect yourself. Things change. For some, family becomes more important. For others they can’t continue to live on ramen. It’s critical to have both core team but also founder’s vesting – so that if someone leaves you can get all or most of their stock back.
There are other issues too to include in your Founders Agreement to protecting yourself and the company you are founding – relations with past employers, ownership of IP, keeping trade secrets. You also want to manage expectations of founders, core team as well as investors. You need a plan. It doesn’t have to be a 50-page business plan, but some drawn up plan and targets you hope to achieve. It will change often and being agile is an important trait of a successful team, but you want to be honest with everyone and keep all on the same page and engaged in the decision making including when major course corrections are needed.
- Kartik Shah is Co-Founder and Managing Partner of Skyscape (a leader in mobile medical information) www.skyscape.com Kartik is also Co-Founder and Managing Partner of Mobiuso, a company that uses its knowledge of Mobile apps and the ecosystem to accelerate the business idea for new enterprises or established ones needing to shift gears for the mobile solutions. www.mobiuso.com With his partner and co-founder, Kartik led the sale of the company to a New York private equity group Perseus, LLC in 2009.. In August 2013, Kartik along with his partner reacquired Skyscape’s healthcare academic centers and association business from Merck’s Global Health Innovation Fund. Kartik brings more than 20 years experience in cutting-edge technology development to both Skyscape and Mobiuso and their development of mobile and wireless programs. Kartik is also an angel investor and serves on the screening committee of the Tie Angels Boston group www.tieangelsboston.com
- Harry Glorikian founded and co-founded two highly successful businesses, with more than two decades of experience building successful business ventures in North America, Europe and Asia. He is best known and respected for delivering strong and sustainable financial returns to owners, investors, and other key stakeholders. He has served as chief executive, board member, and consultant, and is well known for achievements in life sciences, healthcare, and healthcare IT. He invests in life science companies and is also an avid inventor, he holds two US patents in telecommunications, with others pending. GeneNews Ltd. (TSX: GEN), and Draper Laboratory (research facility for space exploration, security, healthcare, and energy).
I will be the third speaker, on Founder Agreements, Vesting and other Founder protections. Our moderator will be ENET member Stacey Arbetter, herself a serial entrepreneur who may add her own stories of workings with co-founders to those told that night.
For more information on, or to register for, this February 3, 2015 event, go to http://www.boston-enet.org/meetings/founder-agreements-stock-vesting-building-team-protecting-yourself-managing-expectations
Hopefully, this first ENET panel on the subject of co-founders and core teams will be quite helpful to entrepreneurs wand would-be entrepreneurs for the small and early stage companies I represent. Hope to see you at our new ENET meeting place, Constant Contact in Waltham, tomorrow night!
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I remain active in ENET, a mainly Waltham-based group that aids entrepreneurs, small and early stage companies, and people who invest or work in those companies. I have been on the ENET Board for the last twelve years, and the past five years since 2009 served as ENET’s Chairman. In May 2013, I was elected by ENET members to my 3rd two-year term as Chairman.
On September 2, 2014, I moderated a panel on this subject for The Boston Entrepreneurs’ Network (ENET) in Waltham, MA on “Entrepreneur Success Stories”, and can now provide links to three separate videos of the presentations that evening.
We had three excellent speakers for that evening, all serial entrepreneurs with successful exits in the consumer, high tech and life sciences fields. One of our three entrepreneur speakers has authored a well-known book on entrepreneurship, one is also a senior lecturer on entrepreneurship at Harvard Business School and one also works as a principal and investor in a major Boston venture capital firm. Below is more information on each video and the speakers.
- ENET Video #1 (High Tech): Achieving success over the long term as a high tech startup via bootstrapping, funding and successful exit.
Author of “The Tech Entrepreneur’s Survival Guide: How to Bootstrap Your Startup, Lead Through Tough Times, and Cash In for Success” , high tech entrepreneur, Bernd Schoner speaks about his company’s long term success and recognizing small successes along the way, over more than 10 years in building a product and work force, bootstrapping , then attracting venture capital and then a successful exit.
LINK: http://youtu.be/mBBQ3hAnPRI (17 minutes)
- ENET Video #2 (Consumer): Serial Entrepreneur speaks about achieving the right culture for financial and personal success in startups led by Women CEOs
A consumer products entrepreneur on her third startup, Janet Kraus is mother of twins and currently CEO of Peach, a new product and sales concept women’s lingerie that she hopes in time will overtake Victoria’s Secret, with emphasis on women consumers over age 30. Janet has had two successful exits, one a huge exit and the other more sideways but still all money back to investors. She will talk about team and culture and building a nurturing environment, some of the distinctions seen a female founded and run company, and how entrepreneurship is part of her DNA. Janet is also a senior lecturer in entrepreneurship at Harvard Business School.
- ENET Video #3 (Life Sciences): Scientist, Inventor, VC and Serial entrepreneur (all in one person!) speaks on “building the concerto” – all the key pieces you need to fit together to build a successful life sciences startup
A serial life sciences entrepreneur and VC, Geoff von Maltzahn is both a principal at Flagship Venture Labs that funds and launches life sciences startups and also currently CEO of several life science startups. Geoff is also author of numerous patents. How does he do it all? Effortlessly and with elegance. As you will hear on our ENET video, when Geoff talks about “building the concerto” with all the different pieces that need to be brought together for a successful life sciences startup company. He responds to questions from meeting co-organizer, scientist and ENET member Andy Synder.
LINK: http://www.youtube.com/watch?v=IP1bf9Fx6-A&feature=youtu.be (22 minutes)
For more information on the event and speaker bio’s for this Sept. 2, 2014 ENET Kickoff meeting, go to http://www.boston-enet.org/meetings/entrepreneur-success-stories-0 or www.boston-enet.org My legal assistant John Papale2nd also served as a co-organizer for this September 2014 ENET meeting
Additionally, in prior years, I’ve moderated and/or spoken at a number of ENET panel presentations, including presentations on the following subjects:
- “Raising Money from CrowdFunding” , May 2014 (moderator),
- ““Co-Founders and Core Team – finding them, protecting yourself, managing expectations”. February 2014 (moderator & speaker)
- “Ready, Set, Launch. Knowing when you’re ready & How to start a company” , September 2013 (moderator),
- “Online Finance and Crowd Funding” , April 2013 (moderator),
- “Bootstrapping 101: Alternative Ways to fund a Startup without an Angel or VC”, November 2012 (moderator)
- “Seed and Angel Financing” , October 2012 (moderator),
- “Getting Stuff for Free”, April 2012 (moderator),
- “Transforming Your Idea into a Successful Company”, September 2011 (speaker and moderator),
- “Get Going! Launching a Successful Business”, September 2010 (moderator),
- “Licensing Technology”, February 2010 (moderator),
- How to Select and Retain Management for your Startup Company”, February 8, 2008 (speaker and moderator)
- “Getting Initial Money to go from Nothing to Something”, October 2007 (speaker and moderator)
- “Strategic Alliances and Partnerships: to build, finance, and develop early stage companies”, November 2006 (speaker and moderator)
- “Building Boards of Advisors and Boards of Directors”, March 2006 (moderator)
- “Protecting Your Intellectual Property”, January 2006 (speaker)
For each of the above presentations, my slides and those of the other speakers on my panel are also available at the ENET web site at this link – http://www.boston-enet.org/meetings/meeting-archives . I hope this information is helpful to you in your business. Again, if you would like more information on our group, go to www.boston-enet.org
For both the September 2013 and February 2014 meetings, I was aided by my son,. William Adelson1st as co-organizer. William recruited 2 of the 4 speakers on September 3. During his service with ENET, William also worked as Social Media Co-Manager and was elected to the ENET Ad Board. He is a Second Lt. in the Massachusetts National Guard, and now on leave from ENET, as he left in late February 2014 to attend the U.S. Army flight school in Ft. Rucker, AL. William’s training is to be an Army helicopter pilot, a 16-month training program. William has been flying small Army helicopters, and recently graduated to the stage of learning to fly Blackhawk helicopters. He expect to graduate the program in July 2015 when he will return to Massachusetts and the civilian sector, even as he continues his service in the Massachusetts National Guard.