Homework due for today
- Talking to real life entrepreneurs. I would like you to interview a real entrepreneur that founded a company. Not just anyone who says that they are an entrepreneur but who actually is in the founding team. I prefer it to be face to face, but telephone or email is also acceptable. Many of you might know family members or aquantances who are founders or know people who know. You can also ask me and/or use LinkedIn.
Try to get answers to questions such as these(use your own words):
- What was your first job after your education, and at what point did you know that you wanted to be an entrepreneur? Also, how did you go from wanting to be an entrepreneur to actually starting the company?
- How did the company develop? How was it successful, how was it not successful? What did you personally do in each scenario?
- Have you started other companies, and how did they go in comparison?
- What are some of the personal traits, talents, skills or knowledge, that have served you well as a founder? What is the mistake you feel is made often in founding a company?
Deliverable: Write a 1-2 page report on your interview. Try to distill out some lessons. Include a section with your own personal reflection on what it means to be an entrepreneur, and how you yourself see your entrepreneurship.
Financing scenarios
Feb 2013: Chris is a senior in college, and has a great idea for a product, and spends senior year (spring term) working many hours refining the idea into a mockup. Senioritis, you know? Many discussions with other students improves and refines the idea.
May 2013: Chris’ friend Dana is interested in helping on the product. It turns out that Dana has experience from courses and also hacking on the side, and knows just how to build a working prototype.
It becomes a practically full time obsession for the two of them, and together Chris and Dana continue to refine the project and get feedback. During the summer and fall, Dana writes a lot of software, which is a central part of the project.
Jan 2014: Dana and Chris realize that they have a knowledge gap. Chris is the product visionary with strong technical chops. Dana is the hands-on coder and has developed a majority of the code.
However to be able to pay the bills they decide that they need to raise money and to have more business expertise. They have no clue how to do this, but a friend of a friend introduces them to Alex. They really hit it off with Alex, who is very experienced, has been involved in a startup before and knows several angels very well.
Questions to discuss. There are no correct answers. Imagine yourself in the actual situation and ask yourself what your position would be and how you would defend it:
- When do you think is the right time to start thinking about incorporating, realistically, and why?
- When do you think the three individuals should assign a ‘title’ to themselves, 1. what titles would you suggest, and why?
- Who do you think may legitimately call themselves a “founder”, a “co-founder”, or just an “early member of the team” and why?
- What is a fair way to allot ‘ownership’ to the three individuals and why?
Company Founding
- Incorporation
- When is it a good idea
- What are the key reasons forcing the decision?
- Types of corporations
- Founding team
- What is a founder and why does it matter?
- “Can I be a founder too?”
- Equity
- How to divide up the pie
- Stock options and the option pool
- Why it exists and how it works
- Vesting
Building a company
- Hiring
- Who should be on the founding team?
- interviewing
- How fast do you hire?
- What do you look for?
- How do you decide?
- Company Culture
- Titles
- Salaries - how much?
- Giving feedback
- Fairness
- Benefits
- Offices, office space, remote work, dogs
- Secrecy/Confidentiality
- When things go wrong
- Firing
- Layoffs
- Legal issues
- Lawsuits