Gust

AUGUST 17, 2014

Keep these balanced and aligned between people (customers, employees) and process (quality, service, revenue), and keep the scope realistic (eliminating world hunger is too broad). Limited goals and priorities. No organization can manage more than 3 to 5 goals and priorities without becoming unfocused and ineffective. Segment the opportunity.

Entrepreneur 182

Entrepreneur Technical Review Angel Investor China 182

Gust

APRIL 20, 2014

This person may be an extraordinary communicator, who rallies employees, customers, and colleagues around the vivid future he sees. Here are some pre-conceived notions about what non-standard titles in a startup, like the following, might mean: Chief Inspiration Officer.

CTO Hire 171

CTO Hire Fractional CTO Angel Investor Public Relations 171

Gust

DECEMBER 22, 2011

Most traditional, bricks-and-mortar businesses have substantial, often enormous hard assets, such as raw materials and supplies, work-in-process, inventory, manufacturing equipment, real estate and more, as well as armies of employees. Tech startups are at the other extreme. Instagram is a textbook example.)

Intellectual Property 149

Intellectual Property Technical Review Software Review IP 149

Gust

DECEMBER 8, 2013

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. You need to know this as a future employee, since it probably gates how long your new job will last. Invested Interests due diligence employees investors startup' Now you know.

Due Diligence 174

Due Diligence Sweat Equity Intellectual Property Burn Rate 174

Gust

APRIL 6, 2014

Most people think that the Peter Principle (employee rises to his level of incompetence) only applies to large organizations. Image via Amazon.com. Let me assure you that it is also alive and well within startups.

Non-Compete 148

Non-Compete Startup Management Founder 148

Gust

SEPTEMBER 16, 2012

Presenting your startup vision as a founder to a potential investor, or presenting an idea as an employee to an executive, requires that you effectively communicate, or “translate”, the value proposition into terms that the receiver can fully understand and appreciate. Steve Forbes image via Wikipedia.

Technology 162

Technology Agile Architecture Distribution 162

Gust

APRIL 9, 2014

Over time, other people receive pieces of equity in exchange for work (employee stock options), money (seed, angel and venture investors), services (attorneys, directors, etc.). Equity dilution works when the same pie is divided among more people. The Founder of a company starts by owning all the shares representing ownership of the company.

Dilution 150

Dilution Equity Vesting Stock Options 150

Gust

JULY 6, 2014

I hasten to tell them that every job move is fraught with risk, but the move from employee to entrepreneur is on the high end of the risk curve. Moving from an employee to an entrepreneur is a lifestyle change, as well as a career change. It’s a big jump, especially in today’s economy, so do your homework first on this one.

Startup 183

Startup Salary Employee Entrepreneur 183

Gust

JULY 13, 2014

In later-stage businesses, entitlement is evident when employees treat customers with indifference, or feel they are entitled to their job by merely “showing up for work.” ” Employees don’t see a connection between how the experience a customer receives today influences their feelings about buying from the company in the future.

Later Stage 153

Later Stage Early Stage Equity Employee 153

Gust

NOVEMBER 7, 2011

All messaging coming from employees should be aligned with your company’s values and brand. Your social media policy needs to outline how team members behave in the online universe during and outside of work. It should include education on style preferences and confidentiality. Failing to tailor the plan to your target audience.

Social Media 125

Social Media Media Startup Curation 125

Gust

MARCH 16, 2014

Typically, vesting in startups occurs monthly over 4 years, starting with the first 25% of such shares vesting only after the employee has remained with the company for at least 12 months (one year “cliff”). Vesting always stops when an employee leaves the company. Vesting with no cliff. Stock dilution control.

Stock 175

Stock Vesting Common Stock Founder Vesting 175

Gust

JUNE 15, 2014

I can’t seem to find employees who are committed to my business.”. Don’t assume that your perspective as an employee gives you a real view of the founder’s role. The next step is employee accountability. “I’ll do the best I can, but the economy is totally unpredictable right now.”. Are you there yet?

Entrepreneur 174

Entrepreneur Bootstrapping Employee Restful 174

Gust

JUNE 23, 2014

Smart potential employees are also reading blogs to stay up-to-date in their field, and find the new leaders. More and more, employees work for people they respect, rather than companies. Of course, ultimately you want employees who can blog for you and your company as well. Populate your team.

Startup 174

Startup Cofounder Social Media SEO 174

Gust

FEBRUARY 2, 2014

The company now has more than 160,000 employees and revenues of $44 billion. As an entrepreneur, she grew EBay from 30 employees and $4 million in annual revenue to more than 15,000 employees and $8 billion in annual revenue, before moving on to HP. He built an overnight competitor to the U.S. Postal Service.

Entrepreneur 175

Entrepreneur Salary .Net Revenue 175

Gust

FEBRUARY 16, 2014

Employees stop innovating. Employees are human, and a static known environment is more comfortable than a dynamic one. With decreased employee productivity and outdated technology, your costs go up, and income drops. Don’t count on your IP to save you. Innovation requires venturing into the unknown, causing more dreaded chaos.

Startup 156

Startup IP Employee Technology 156

Gust

DECEMBER 1, 2011

Notice what is missing from this list of priorities: The company itself – that is, a business entity, most often a corporation , that will own the entire business (however defined), issue equity to founders, take investment capital , enter into contracts, make sales, pay employees and contractors, and so forth.

IP 114

IP Intellectual Property Equity Liquidity Event 114

Gust

OCTOBER 11, 2012

While you will definitely need to be a corporate entity before you can accept funding from any investor (or issue stock options to any employees), the specific corporate status of the venture at this stage is much less important to investors than its functional status.

Delaware 122

Delaware Stock Options Cofounder Stock 122

Gust

JUNE 22, 2014

Smart potential employees are also reading blogs to stay up-to-date in their field, and find the new leaders. More and more, employees work for people they respect, rather than companies. Of course, ultimately you want employees who can blog for you and your company as well. Populate your team.

Startup 125

Startup Cofounder Social Media SEO 125

Gust

JANUARY 12, 2014

Founders or employees in constant motion, but with no momentum, will never get off the ground. What you then want is for the momentum to compound, with each new employee or outsourcer you hire to help, to give you get more time to create value and ultimately, increase profits. Momentum is moving things forward (mass x velocity).

Entrepreneur 171

Entrepreneur Hiring Employee Operations 171

Gust

JULY 29, 2012

Don’t hire any employees. Managing employees is a whole separate discipline, and most true entrepreneurs aren’t very good at it anyway. Make sure any employees needed are a function of your “bandwidth,” not your confidence or interests. Running a business is not rocket science, so you can learn how if you have enough passion.

Bandwidth 155

Bandwidth Bootstrapping Equity Startup 155

Gust

FEBRUARY 9, 2014

Technically, I believe an entrepreneur is anyone who manages his own profit and loss, and doesn’t meet the government tax definition of an employee. What are the alternatives that will give you the independence you crave, and challenge your business acumen?

Entrepreneur 172

Entrepreneur Business Model Government Employee 172

Gust

JANUARY 20, 2013

In summary, all of these steps are really about rethinking the definition of “employee engagement.” According to the Gallup Organization and numerous other respected analysts, 49 percent of current American employees admit to not being engaged, meaning they just show up, follow orders, and keep their mouths and their brains shut.

Startup 180

Startup Social Media Cloud Customer 180

Gust

FEBRUARY 1, 2014

The ideal angel investor would spend a great deal of his/her time working on behalf of the company in support of the CEO, in every way other than being a full-time employee. In addition to doing the kinds of things that anyone (employee, friend, parent, founder, etc.)

Angel Investor 148

Angel Investor Startup IPO Early Stage 148

Gust

OCTOBER 2, 2014

Recruit employees in the blind belief that the amazing job they’re quitting to join you will be worth it in the long run. Early on in my first company I had an employee ask if it was a good time to buy a home. My employees. To hide your demons so that you don’t scare the bejesus out of your employees. And yet you have to.

Monaco 122

Monaco Cofounder Chicago Mexico 122

Gust

DECEMBER 2, 2012

Starting and growing a business is more work and more stress than any employee role should be. I hate having a boss, and just being an employee.” Perhaps you need to look carefully at the reasons for your weariness and stress at work. Health and personal problems don’t go away when you start a business.

Startup 181

Startup Entrepreneur Employee Partner 181

Gust

NOVEMBER 4, 2011

This discussion expands on my Quora answer to a specific question: “ Why were the stock options of MySpace employees worthless even though the company was sold to News Corporation for hundreds of millions? ” The complete story includes a startup-within-a-startup, investments and exits by two VC firms, and some genuine corporate drama.

Valuation 98

Valuation Pre-Money Valuation Merger Vesting 98

Gust

APRIL 11, 2014

” That’s because whatever price the public investors are paying for their shares, the founders, employees and earlier investors invariably paid less (in cash; sweat equity is another story). Being fluent in these concepts helps in many settings, such as negotiating terms with potential investors, co-founders and key employees.

Dilution 162

Dilution Equity Pre-Money Valuation Prospectus 162

Gust

JULY 5, 2012

Instead, they clearly help Google to recruit and retain some of the very best employees around (just ask anyone in New York or Mountain View.). For example, at Gust every employee is issued a full complement of Nerf Guns with ammunition… which means that after-hours visitors take their lives in their hands if they arrive unarmed.

Warrant 127

Warrant Startup New York Cost 127

Gust

JANUARY 4, 2012

Internal org charts , job descriptions, titles, resumes, compensation details and direct contact information for individual employees (trade secret). Sales and marketing plans , lists of prospects, supplier and subcontractor relationships, pricing data, media buying plans and strategies, etc. trade secret).

Intellectual Property 143

Intellectual Property IP Startup United States 143

Gust

JUNE 10, 2012

Obviously, if you can do most of the work yourself, you need fewer employees, meaning less for payroll tax, benefits, and workers compensation. As a rule of thumb, you should double every employee’s salary in estimating employee costs, so less is more. Wages and benefits.

Cost 139

Cost Burn Rate SEM Startup 139

Gust

JUNE 7, 2014

So, here is the typical payout order, from first to last: 1) Salaries owed to employees. That is usually done by setting aside a fixed amount, or a percentage of the purchase price, which gets divided up among the management team and gets paid out before the investors start getting paid back. 2) Secured creditors.

Warrant 157

Warrant Preferred Stock Early Stage Common Stock 157

Gust

JUNE 19, 2012

You can’t have a $20 million sales estimate with 10 employees in the company and a few hundred thousand dollars of marketing expense. I want realistic expenses. Most plans are pretty good about estimating direct costs but bad about underlying expenses. It just doesn’t happen. . Never write that you have no competition.

Startup 180

Startup Forecast Angel Investor Software 180

Gust

DECEMBER 8, 2011

Determine the allocation of equity among co-founders, early employees or other service providers, and future contributors as applicable, as well as the vesting schedule , if any, that will apply. Offer letters for employees. Pick a name for the new legal entity (e.g., Newco, Inc.”) Independent contractor or consulting agreements.

Intellectual Property 139

Intellectual Property Non-disclosure Agreement Delaware Stock 139

Gust

DECEMBER 29, 2013

Carrying a non-performing employee probably triples the costs, since you are paying two people to do the job, and at least one other is de-motivated by the inequity. Make it a rule to not fraternize with your employees, and choose your partners wisely. Only hire people who like you or think like you.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Gust

NOVEMBER 15, 2012

And there are others that people think are teeny little wannabes with a dozen or so employees…that have $25 million in highly profitable revenues with hockey stick growth and zero debt!

Seed Stage 131

Seed Stage Hockey Stick Cap Table Liquidation Preference 131

Gust

NOVEMBER 23, 2014

If you are looking for someone to fill an operational gap, or to do product design, it’s usually more productive to look for a partner, employee, or consultant. Members can provide a mirror so that you can see your company as experts see it, as long as you look in that mirror with eyes wide open.

Advisory Board 185

Advisory Board Startup Stock Options Stock 185

Gust

JUNE 1, 2014

Inversely, feedback to newer employees should be given by their direct manager, or even peers, rather than a top executive. Minimize the perceived power difference to facilitate listening. Feedback to top executives is more readily received from outside experts and mentors, rather than less experienced team members.

Startup 162

Startup Entrepreneur Partner Employee 162