Improve chances of building a winning start-up team

Seldom does a startup team include all of the human resources needed for the new firm to be successful. Founders tend to form teams of like-minded individuals, often with the same educational background and similar talents and work experience. If the founder is an engineer, for example, then the team is usually laden with technical talent.

What is the typical makeup of a startup team? The minimal core team should include individuals with skills in marketing, finance, operations and the product or service that you will offer. You also need someone with experience in your industry and market.

Problems for most startups include coordinating availability schedules for all the key players, securing enough money for salaries and finding all of the key team members.

The perfect team may be hard to find, let alone assemble on day one, but there are issues that you can control. Here are eight things that you might consider doing to improve your chances of building a winning team -- and ultimately, a successful company.

Select the right type of organization. If you need equity to attract talent, then consider organizing as an S Corporation or a C Corporation. If you know your fellow team members and do not plan on raising capital or increasing the team size in the near term, an LLC might work.

Put critical items in writing. If you are going to issue options, establish an option plan and have the forms ready to grant the options when attracting the core team. Use employment contracts -- talented people expect to sign these agreements.

Establish minimum standards for your key employees. It never hurts to do background checks on key team members. And good credit ratings can be important for early stage entrepreneurs. A bad rating may indicate that your partner will not be able to "hang in there" during the difficult early days.

Build a strong advisory board. Accept the fact that you may not be able to acquire all the talent that you will need. Advisors might include industry experts such as professionals from accounting, law or banking.

Form a board of directors. The board will hold you accountable and help you stand firm on your core principles as you build your team.

Include someone with industry or market experience. A person with a successful entrepreneurial background is not only valuable to your team, but may also increase the attractiveness of your startup to investors.

Assemble a team of outside professionals. At a minimum select the following: an attorney, an accountant, a banker or investor and two insurance brokers -- one for liability coverage and one for employee benefits. These professionals should be screened; only those who specialize in emerging businesses should be retained. One last suggestion: negotiate reduced fees or deferred fees, do not pay the "rack rate" for services.

Test for passion. If everyone on the team does not share the same level of passion, be honest with yourself: Is this group your winning team? I have seen more than one customer make a decision to buy -- or investors agree to invest in a company -- on the principle that they would rather work with an "A team with a B product" than a "B team with an A product." Good luck in building your "A team."

Gary Williams is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at [email protected].

Copyright C 2004 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.