Call Us: 1-888-447-1821

• Home
• Entrepreneurs
• Lawyers
• Investors
• Services
  • Company Formations
  • Conversions
  • Equity Incentive Plans
  • Document Portal
  • Certified Copies
  • SureComply Service
  • Corporate Secretary Services
  • Equity Financing Documents
  • Debt Documents
  • Other Services
  • White Labeled Services
• Learn
  • Starting a Business
  • Funding a Business
  • Managing and Growing a Business
  • Key Concepts
• About Us
  • Our Process
  • Team
  • Our Partners
  • Contact

Building a team

Building a team is probably the sinlge most important thing that you will do as entrepreneur.  Establishing a strong management team is considered essential for success in nearly all businesses and is generally the single most important criteria for securing investment from sophisticated investors.  Even in partnership structures, most firms choose to appoint at least one leader among equals and they often establish sub-committees that play key management roles.  As Jim Collins says in his seminal book Good to Great, getting the right people on the bus is the most important thing that any business can do to become a great business. 

Founders

Most startups begin with a group of two or more founders.  Sometimes a single founder can push an idea to the point to where he or she understands the market, has a hypothesis about how to serve the market, and may even have the beginning of a product or service offering.  However, starting a successful business is very hard work and almost always requires more than one person.  In fact, before a business is successful, it will generally require a large team.  In his article "The 18 Mistakes That Kill Startups,"  Paul Graham highlights having a "single founder" as the first mistake that can kill startups.  He frames it as a "vote of no confidence,"  meaning that if a founder couldn't convince even one other person to start the company with him or her there is something wrong with the person or the business idea.  Finding at least one other person who believes in your idea is critical to improving your chances of success.  A second founder will also provide you with an independent perspective on business problems and solutions.  Also, many startups, and most technology startups, will require that one founder has some form of technical expertise.

required roles

There are a number of typical company management team roles that you should consider adding to your startup.  C-corporations and S-Corporations often require that a company have a President and Secretary or Treasurer.  While the same person can act in all 3 roles at the same time, most companies that will be successful will ultimately put together a team of competent managers. 

LLCs are somewhat different.  LLCs are structured legally more like a partnership.  While the organizer of an LLC can specify roles and most generally do, it is not a requirement.

Other Common startup Roles

The following is a list of the most common roles found in startups.  This list comes from the experience of the founders of Early Stage Legal who have worked for years as venture capital investors and who have worked with hundreds of startups.

• Chief Executive Officer (CEO) and / or President.  The most common  initial role created in a startup entity is someone who will "run the company."  This person may actually be an engineer who ultimately wants to become the Chief Technology Officer of the company, but he or she acts as a temporary leader of the entire business.  Or, this person could be the business leader who wants to remain the long-term business leader of the company.  For the most part, this person will assume the title of Chief Executive Officer and / or President at least for some period after forming the company.  While historically the title President may have been synonomous with Chief Executive Officer, now it is often considered to be a lower role.  Many companies have Presidents who actually report to the Chief Executive Officer and act in more of a Chief Operating Officer role where the CEO focuses on strategy and external realationships and the President/COO focuses on day-to-day management of the internal business.  A significant number of companies choose to keep the CEO and President roles joined together, so you will see the "President and CEO" title.
• Chairman of the Board.  Sometimes this role is combined with the CEO but often this provides a convenient role for startups created by two founders who want to be as equal as possible but recognize the need for one clear business leader.  In this instance, many founders choose to appoint one founder as the CEO and the other as the Chairman of the Board.  While technically the entire Board of Directors is the CEO's boss, the CEO generally runs the company and only receives periodic, strategic guidance from the Board of Directors.  The role of the Chairman is to preside over meetings of the Board of Directors.
• VP of Product Development / Chief Technology Officer.  The VP of Product Development helps to create, improve and maintain the product the company is selling.  Many technology-focused startups will have a Chief Technology Officer who reports to the CEO but is in charge of the product development.  In technology startups, the VP of Product Development or CTO often oversees a group of engineers that are building the company's product.
• VP of Sales.  Vice Presidents of Sales are a common early hire for a startup since sales is the lifeblood of a growing business.  Many early-stage founders will assign one of the founders to this role early.
• VP of Marketing.  The VP of Marketing establishes the company's name or brand and generates leads that the sales team can close.  They work closely with the sales team but focus more on providing sales tools, collateral, branding information, and leads rather than actually closing deals.  Often the VP of Marketing helps to establish coordinate information flow between sales and product development as well.  The VP of Marketing tunes the company's message to make sure that the company's differentiation versus competitors and value proposition are clear. 
• VP of Business Development.  The VP of Business Development role has become increasing popular over the past several decades.  The role can mean significantly different things to different companies.  In some companies the VP of Business Development is essentially the VP of Channel Sales.  By "channel sales" we mean indirect sales.  In this case, the VP of Business Development sells to groups that can resell a company's product or service to a broad group of potential customers.  In this sense the reseller is a channel to a large group of customers.  In some companies the VP of Business Development players a more abstract role in creating business partnerships and helping to develop the strategy of the company.

Finding the Right People

Finding the right people is always a challenge.  If you are a serial entrepreneur, you can generally just hire people with whom you have worked successfully in the past.  If you are a first time entrepreneur, you have to spend time searching, recruiting, convincing, hiring, and incenting people.  While this is incredibly time consuming and difficult, it will make an enormous difference to your prospects of success.  Here are a few key tips to keep in mind:

• Hire people with the right experience for the job
• Avoid hiring friends
• Use your own network
• Connect with other entrepreneurs or investors and ask for help
• Knock on a lot of doors--interview a lot of people before singling out the best prospect
• For key roles, if you have the money to pay for it, use a head hunter