Serial entrepreneur and business consultant Jeffery McMahon shared some key insights about finding a good founder for your startup business.
Contracts and paper trails exist for a reason, so that everyone is clear on expected input, common goals, metrics and outcomes. The best time to work out these agreements is right upfront before anyone has too much invested and before any potential tensions can arise.
Here are some elements that are important to document:
Ownership and equity: including how much each person invests, how much time and effort they’re putting in, and any other contributions they may make
Roles and responsibilities: each co-founder should have clearly defined roles and responsibilities. This ensures everyone knows what they are responsible for and how their work contributes to the success of the company
Decision-making: this agreement should outline how company decisions will be made - including how voting rights will be allocated, who has veto power, and how to resolve disputes
Compensation and benefits: this agreement should include information about salaries, bonuses, and other benefits
Intellectual property: how it will be protected and managed (patents, trademarks, copyrights)
Exit Strategy: should outline how a co-founder can exit the company, including how their shares will be valued and bought out
Key tips that Jeff shared on the process of developing your startup included:
Get into an industry / market that you deeply understand.
Provide solutions to hard problems people are willing to spend money to fix.
Ideally team with someone you’ve worked with before where you’ve achieved solid success, developed deep trust, and complement each other’s skills and industry contacts.
Network, network, network, and then network some more to get the right people as you expand the team - it takes a consistent commitment but it can be done globally and lots of great people love to help aspiring entrepreneurs.
Enjoy the process! What’s more fun than learning and meeting great people while building something cool that can make a positive difference?
If you have questions about starting your own business, contact IDEA Hub Director Maia Donohue at donohuejer@uwplatt.edu and learn more about IDEA Hub at https://www.ideahubaccelerator.com/