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Building an Entire Investable Team It is an oft-repeated truism that angels and venture capital firms invest in teams more than they invest in ideas and technologies. The team, Board, and Advisory Board are extremely valuable. This roundtable will provide investors’ perspectives on this dilemma, along with a discussion of other team-related topics, Board and Advisory Board building strategies and management. www.thecapitalnetwork.org
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Building an Entire Investable Team: An Entrepreneur’s Perspective
The Capital Network
July 10, 2013
Win Burke
President & CEO
iGetBeBer, Inc.
Topics
• The Management Team • The Board of Advisors • The Board of Directors • Board – Management Team Dynamics
I agree with Bob’s comments and will not repeat his content, but rather will augment them from an entrepreneur’s perspec@ve.
Bob and I agree that there is no single right way, and there are many possible right ways depending on circumstances and the specific people involved. Offered for considera@on are generali@es, to which there are many excep@ons, but which represent a framework for implementa@on.
The Management Team
First my own experience…
• Early Career/Midsize and Large Companies – Computer Scien@st/SoMware Engineer
– Product Management, Marke@ng, Sales, Services
• Early Stage Company Career – iGB is my 7th early stage company – A founder of 3 – VP of S&M of 2, CEO of 5 – 4 companies acquired, 1 IPO
(Have made many mistakes, hopefully learned not to make them again)
What I have learned…
• Investors invest in a team first, then product/market – Mix of vision and experience – Good team chemistry
• Clear roles, who’s in charge • Best if have worked together before
• Be credible to investors that team can execute – Sales, CFO should be experienced – Complete team
• If not complete, VCs may suggest fill-‐ins
What I have learned…
• “Bump in the road” capable – Flexible, resilient, adap@ve when things go wrong – Can absorb personal financial constraints
• Impact of team experience – Angels are more likely to accept “young and fresh” – VCs are more likely to want to know that team can execute • VCs prefer repeat entrepreneurs (“been there, done that”) • Kaufmann Ins@tute study says that entrepreneurs over age of 55 have 2x success
The Board of Advisors
What I have learned… • Industry luminaries/experts who believe in you signal to investors that you are real – Signal to customers and partners as well – Fill in industry holes of management team
• Industry knowledge, experience, contacts (!!!) – How to recruit
• Remember that they may: – Tend to feel comfortable with what they have done rather than what could be done
– Have conflic@ng egos/agendas (important to manage group dynamics)
The Board of Directors
What I have learned…
• A func@onal Board is an asset, a dysfunc@onal Board can be a fatal liability (change it!)
• Try to choose (may influence choice of investors): – A mix with opera@onal as well as financial experience, preferably within your industry
– Experience with Boards and how they should work – Can work together collabora@vely instead of confronta@onally; good chemistry and dynamics
– Not all in lock-‐step, but generally on the same page – How to recruit
Board – Management Team Dynamics
What I have learned…
• Trust, communica@on are essen@al – Communicate oMen and transparently
– But, don’t communicate every problem • only those that stay problems, need assistance, or are of fiduciary import
• Management team should agend Board mee@ngs – Need exposure to Board for two-‐way trust
• But can be shocked/demo@vated by frank Board discussions
– Present/discuss their part of the business, but not stay for internal Board discussions
Thank you!
QuesSons?