BUS 314 Lecture Notes - Lecture 3: Dont, Spreadsheet, Granite Ventures

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SFU
BUS 314
Fall 2020
Lecture 3 Sept 28
Networking
- Provide the WHY when requesting a virtual coffee chat
- Have a purpose to meet and be specific
Building a Founding Team
- Co-founders from your network
- First partner: strong where you are weak
- Be slow to build team, start with one
- You have to trust and respect partners
- Same rules for advisors and board
Founding Team Types
- Being a founder is a lonely job
- First recruit should be a co-founder with complementary skills but similar style
- Being a FRIEND is NOT the primary criteria but it’s the TRUST
Building a leadership team
- Leadership team built out to match business phase:
Key Questions
- What is the vision?
- What culture do we want to create?
- Does this candidate have the right stuff?
o Self-aware & critical think?
o Compatible with us & our culture?
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SFU
BUS 314
Fall 2020
o Some Startup experience (incredibly useful)
o Faced adversity and completed thought tasks?
Hiring Founders
- Take time to validate your hypotheses, build a compelling vision based on solid evidence
- Compensation is critical
- Liveable salary but focus should be on equity
o Cofounder: 60:40 split, new hires dilute pro-rata
o Other leadership team: 5-7% each
o Hold for non-leadership staff: 10% total
o For board and advisors: 5% total
Types of founding Team Equity
Board & advisors
- Be very slow to take on
- Often see too many unproductive advisors
- 4-5 advisors max: define responsibilities
- Board
o Add one outside director early (trusted, director experience), add 2nd from your seed
syndicate
o Expand post Series A only
The Capitalization Table
What is the Cap Table?
- Cap table shows company ownership
- By security class, round and fully diluted
- Fully diluted includes all securities including common shares, preferred shared, options (issued
and available) and warrants
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Document Summary

Provide the why when requesting a virtual coffee chat. Have a purpose to meet and be specific. Be slow to build team, start with one. Being a founder is a lonely job. Being a friend is not the primary criteria but it"s the trust. First recruit should be a co-founder with complementary skills but similar style. Leadership team built out to match business phase: Take time to validate your hypotheses, build a compelling vision based on solid evidence. Liveable salary but focus should be on equity: cofounder: 60:40 split, new hires dilute pro-rata, other leadership team: 5-7% each, hold for non-leadership staff: 10% total, for board and advisors: 5% total. 4-5 advisors max: define responsibilities: add one outside director early (trusted, director experience), add 2nd from your seed syndicate, expand post series a only. By security class, round and fully diluted. Fully diluted includes all securities including common shares, preferred shared, options (issued and available) and warrants.

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