Companies often falter because the people who start them aren’t able to adjust quickly enough to their new roles and because the firm lacks a “track record” with outside buyers and suppliers. Assembling a talented and experienced a new-venture team can overcome these limitations.
II. Creating a New-Venture Team
A new-venture team is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
1. The Founder or Founders
a. Size of the Founding Team
l Homogenous = their area of expertise are very similar to one another.
l Heterogenous = diverse in terms of their abilities and experiences.
b. Qualities of the Founders
Attributes that strengthen the chances of a founder’s success: level of education, prior entrepreneurial experience, relevant industry experience, and networking (building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm).
2. The Management Team and Key Employees
To help prioritize entrepreneurs hiring needs is to maintain a skills profile (a chart that depicts the most important skills that are needed and where skills gaps exist). To save money, increase flexibility, and mitigate the difficulty in finding good employees, new ventures use four different sources of labor: full or part-time employee, intern, freelancer (or contractor) and virtual assistant.
3. The Roles of the Board of Directors
A panel of individuals who are elected by a corporation’s shareholders to oversee the management of the firm. It is typically made up of inside director (a person who is also an officer of the firm) and outside director (someone who is not employed by the firm).
a. Provide Expert Guidance
Pick board members with needed skills and useful experiences who are willing to give advice and ask insightful and probing questions to obtain important inputs.
b. Lend Legitimacy
When a high-quality individual does agree to serve on a firm’s board, the individual is in essence “signaling” that the company has potential to be successful.
III. Rounding Out the Team: The Role of Professional Advisers
1. Board of Advisors
A panel of experts who are asked by a firm’s managers to provide counsel and advice on an ongoing basis. Unlike a board of directors, and advisory board possesses no legal responsibility for the firm and gives nonbinding advice. Most boards of advisers have between 5 and 15 members. Typically, they are paid a small honorarium for their services.
2. Lenders and Investors
They have a vested interest in the companies they finance, often causing them to become very involved in helping the firms they fund. They help providing guidance and lending legitimacy and providing financial oversight. They also work hard to help new firms fill out their management teams.
IV. Other Professionals
1. Consultants
An individual who gives professional or expert advice. New venture often turn to consultants for help in a specialized area, because large firms can afford to employ experts in many areas. There are paid consultants and consultants who are made available for free or at a reduced rate through a nonprofit or government agency.
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