Build your team

4 MINUTE READ

When you have a business plan, you can start to think about the people you’ll need in your start-up team.

An important output from a Business Model Canvas and business plan is an understanding of what parts of its offering your start-up will develop in-house and what parts you will get from partners.

This understanding defines what roles are needed in the start-up and at what stages of the start-up’s evolution they must be filled.

Apart from your role as a founder in setting the vision and strategy for the start-up, other responsibilities of the start-up team can include:

development of the underlying technology
product development
business development, marketing and sales
before and after sales technical support and documentation
regulatory compliance
choosing and dealing with partners (suppliers)
managing finances
managing these sub-teams and their projects.

Some successful start-up investors argue that the most important ingredient for success of a start-up is not the underlying technology or IP, product idea, business plan or even relationships with customers, but the start-up’s team, especially the founders.

This could suggest that the ideal team would include people with proven experience in all relevant roles.

But other successful investors argue that particular personality traits, including passion to achieve impact, are more important than experience.

There is evidence that teams reach better decisions if they have access to diverse viewpoints. This means people of different:

educational background
gender
age
culture
risk tolerance
personality type.

You also need processes in place to manage team dynamics.

The right people will quickly learn useful skills on the job, but diversity of this kind is fundamental.

Also, especially in the early stages of your start-up’s evolution, it’s possible to outsource non-core functions, for example financial management.

The ideal team for your start-up might be a small but diverse group of people with a shared passion and vision for achieving impact in the target market.

‘Founders’ or ‘employees’?

We use the terms ‘founders’ (or ‘co-founders’) and ‘employees’. We use the term ‘team’ to mean founders plus employees.

There’s an important difference between founders and employees.

The founders of your start-up are the small group of people, involved from the beginning, who create your start-up’s vision and business plan. The founders get involved in the start-up earlier than anyone else, so take more risk. This can include financial risk. For example, you and your co-founders might work for a reduced salary, or no salary at all, in the early stages.

In return, you and your co-founders usually take ownership of a significant part of the start-up. In other words, you hold significant equity.

What’s the ideal number of founders? Opinions vary, from as few as two to as many as six. Overall, diversity, shared vision and an ability to work together are more important in a set of founders than a particular number of people.

If there’s true diversity among your co-founders, you’ll challenge one another, and your experience of working together won’t always be comfortable. In fact, if you’re too comfortable, you probably need more diversity!

You and your co-founders don't need to all be close friends. But you do need to be a group of people able to work through challenges and uncertainty together.

The start-up’s team also has employees. They are usually hired by the founders and are involved in later stages of the start-up.

Even though employees can make major contributions to the creation of the start-up’s strategy, and are almost always crucial to the execution of this strategy, they usually:

have less involvement than the founders in the creation of the vision
take less financial risk (for example, by taking a market-rate salary)
have less equity.

Where to find co-founders

Other researchers involved in the work your start-up is based on are potential co-founders.

More and more, the University is employing Entrepreneurs and Enterprise Professors. These are people with experience and interest in research-based start-ups. They mentor and work with researchers interested in start-ups. They may come from the University or from a start-up incubator.

If someone like this is closely involved in developing the start-up’s business plan, they could also become a co-founder.

Early-stage investors could introduce a member of their network, who could also become a co-founder and add diversity.

Founders’ or shareholders’ agreements

A founders’ or shareholders’ agreement is a written agreement between the start-up’s founders. It describes:

their roles in the start-up
their commitment to it (in time and money)
the risks they are prepared to take
their equity ownership.

The discussions that lead to an agreement of this kind are often difficult. They are often postponed, especially if founders have no business experience.

But these discussions are critically important. The sooner you make this agreement, the better. Ideally, you and your co-founders will do this when the start-up is still an idea, with no financial value.

If you wait until the start-up has significant financial value, reaching an agreement becomes much more difficult. Any disagreements could threaten the start-up’s future.

Find a template for founders’ or shareholders’ agreements.