The Entrepreneurial Environment ◾ 65
who knows more and more about less and less) but later must become the
great “generalist.”
The skilled team brings access to all areas of business expertise, includ-
ing marketing, sales, manufacturing, accounting, and nance. Startups sur-
vive only by standing on the shoulders of many people, especially those
with collective experience in a multitude of disciplines. A team provides
greater opportunities to network, that is, build and maintain relationships
with people whose interests are similar or who can bring strategic advan-
tages to a rm.
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This is illustrated in Figure4.7.
4.3.2 Establishing Your Board of Directors
“Quality, not quantity.”
Organizing a venture as a corporation requires constituting a board of
directors (BOD), a slate of individuals elected by a corporation to oversee
the governance of the entity. Corporate governance involves regulatory and
market mechanisms, relationships between a company’s management and
its board, shareholders and other stakeholders, roles and responsibilities of
senior individuals, and the goals that the corporation aims to achieve.
7
The
best boards do more than govern; they add value to your rm.
Table4.5 Characteristics of Founder Teams
5
• Founder has: (a) higher education credentials, (b) prior successful
entrepreneurial experience, (c) recognized expertise in a relevant technical
area, (d) professional contacts, and (e) “sweat equity” in the rm.
• A team brings a combination of talents, resources, and experience unmatched
by any single individual.
• Frequently, the entire team does not come together at once. Instead, it is built
as the new rm can afford to hire additional talent. At rst, the rm may rely on
non-paid “volunteers” willing the help get the organization “off the ground.”
• The team also involves more than insiders. Most startup teams consist of
boards of directors, boards of advisers, and other professionals on whom they
rely for direction and advice.
• New ventures have a high propensity to fail, in part, due to what researchers
call the “liability of newness.” Startups often falter because the people who
start rms cannot adjust quickly enough to their new roles and the rm lacks a
“track record” with investors, buyers, and suppliers.