So you want to launch a tech start-up, but you’re not sure where to start? We know that you’re a rockstar, but you’ll need a team to help make the impossible possible. Yes, it’s true. Trying to get started solo isn’t just a bad idea – it’s a really bad idea. You need additional brains thinking about your product from day one. We asked our go-to start-up expert Lo Bosworth for advice on assembling your dream team — and then deciding who gets what!
1. CEO: The CEO is traditionally a founder or co-founder of a business and responsible for strategizing, vision, execution and raising capital. It’s easy for a team with multiple co-founders to become territorial over the CEO role, but try to move on, keep “Co-Founder” in everyone’s title, and properly assign titles so future employees (and investors) know the roles of individuals at a company. If that just doesn’t seem feasible, give Co-CEO titles — but make it extremely clear who is responsible for what. Beauty start-up Birchbox is a great example of a company that has successfully used the Co-CEO model.
2. Technology: Whether this person is a technical co-founder or a developer you bring on from the start, a technical team member is critical to starting your business because they’re going to build your website or app. Without them, you have nothing. Outsourcing development to an individual or group on Elance may seem like a great and affordable option, but it’s easy to get screwed when a stranger on another continent is running the show. Plus, you’ll want to have someone on hand when those unexpected technical glitches come up (which, believe me, they will!).
3. Creative: A lot of new companies undervalue the absolute necessity for a creative type to join the team early on. This person doesn’t need to be a co-founder or receive as much equity as say, a technical co-founder, but their role as an artistic visionary for a company is very important. From helping to create editorial content to putting together a style guide for both your website and photo shoots, this person’s taste and style will be directly reflected in everything that’s a consumer facing part of your company. This role can be outsourced to a consultant in year one, but don’t overlook it.
4. PR: More and more importance is being placed upon hiring a PR firm to represent you and your company out there in the big, bad world. I’ve worked with publicists for years and while they’re expensive, they’re a critical part of your user acquisition strategy. Press hits created users and users create successful companies. Period.
5. Legal: Go out and get yourself a venture attorney who has experience with start-ups, VCs, and raising capital. A great attorney is a solid addition to your team, and can save you some serious headaches down the road. If you plan to fundraise, an attorney is a must for navigating contracts and investor agreements.
6. Advisors: Every successful tech start-up has a team of advisors behind it who have gone through the process before. It’s a good idea to pick advisors who have skills in different areas so that you can gain perspective on all aspects of your business — including many that you probably haven’t even thought of yet! Check out the advisors for me and co-founder Christianne Amodio’s company Revelry House — Michael Slaby, Rishi Khanna, Shawn Merani, Diego Berdakin, and Michael Crooke — as an example of the variety of experts you should aim for.
And, finally, the equity discussion:
The next question founders usually face is the division of equity to the first few members of their team. If you have a co-founder that has been a part of the business from day 1, consider each other’s roles and responsibilities appropriately and discuss equity early. You should think about who had the original idea, the skills they bring to the table, and additional elements they have that add value (for example, can one of you guarantee press and make a ton of angel investor introductions?). It’s normal to go 50/50, and it’s also normal to divvy it up differently, so find what works best for your company.
Advisors should get less than 1%. Consultants shouldn’t receive equity, but a lot of companies (PR, design/development, etc.) will take equity in exchange for payment. If you’re super low on cash and must resort to this option to get going, do so carefully. And make sure everyone is vested over a period of 3-4 years.
Lo Bosworth is an entrepreneur living in New York City. In addition to launching Revelry House, she is also an executive producer, author, UCLA graduate and alum of MTV’s The Hills.