Founder Agreements & Stock Vesting - Building a Team, Protecting Yourself, Managing Expectations

How do you find co-founders? How do you recruit a core team? You guessed it – by networking. That includes trade groups like ENET but also your own personal network. There are also groups that provide match-making for co-founders. But you do want to be careful. Joining with a co-founder is like going into a marriage. You could spend years and go through much of your money, and you need to both trust and respect your co-founder to share that with you. So, it’s best not to just jump in bed but rather get to know your co-founder for months before or perhaps have prior work experience.

Even then you still want to protect yourself. Things change. For some, family becomes more important. Others can’t continue to live on ramen. It’s critical to have both core team and founder’s vesting – so that if someone leaves you can get all or most of their stock back.

There are other issues to include in your Founders Agreement that protects yourself and the company you are founding. These include relations with past employers, ownership of IP and keeping trade secrets. You also want to manage the expectations of founders, your core team and investors. You need a plan. It doesn’t have to be a 50-page business plan, but some drawn up plan that includes targets you hope to achieve. It will change often and being agile is an important trait of a successful team, but you want to be honest with everyone and keep all on the same page and engaged in the decision making including when major course corrections are needed.

Those are the issues of Co-Founders and Core Team, that ENET will take up on February 3, with an expert panel of three well recognized serial entrepreneurs and co-founders, moderated by serial entrepreneur Stacey Arbetter.

Panel:

Kartik Shah, a leader in mobile medical information technology. Kartik is also Co-Founder and Managing Partner of Mobiuso, a company that uses its knowledge of Mobile apps and the ecosystem to accelerate a business idea for new enterprises or established ones needing to shift gears for the mobile solutions. www.mobiuso.com With his partner and co-founder, Kartik led the sale of the company to a New York private equity group Perseus, LLC in 2009. From 2010 to Sep 2012, Kartik served as the Chief Technology Officer of Physicians Interactive Holding, an aggregate of three healthcare technology companies held by Perseus, including Skyscape. In August 2013, Kartik along with his partner reacquired Skyscape's healthcare academic centers and association business from Merck's Global Health Innovation Fund. Kartik brings more than 20 years experience in cutting-edge technology development to both Skyscape and Mobiuso and their development of mobile and wireless programs. Before joining Skyscape, Kartik served at Cornerstone Software as Vice President of Software Development. Kartik is also an angel investor and serves on the screening committee of the TiE Angels Boston group www.tieangelsboston.com Kartik earned his M.S. in Computer Engineering from the University of Southern California, Los Angeles, B.E. in Electrical Engineering from Victoria Jubilee Technical Institute (VJTI), Bombay and has completed advanced management courses offered by the Wharton Business School, University of Pennsylvania.

Gail Hoffman, Operating Committee Chair, Golden Seeds New England

Gail Hoffman is an active angel investor and mentor in the New England entrepreneurial ecosystem, sharing her expertise in finance and strategic planning. She has spent her career advising businesses and non-profits, and was involved in a number of successful portfolio company acquisitions and divestitures, including Motown Records, The National Enquirer, and CPP/Belwin Entertainment.

Gail currently serves as the Operating Committee Chair for Golden Seeds New England, with responsibility for managing a membership-driven organization focused on new member growth, investment analysis, capital deployment, and investor education. Golden Seeds is one of the nation’s most active angel investment firms, and provides early-stage and growth capital to women-led businesses across all industry sectors. She is also a member of Launchpad Venture Group, New England’s largest angel investment group.

Gail began her career in the Corporate Finance Department of Dean Witter Reynolds. After receiving her M.B.A. in Finance with High Distinction from The University of Pennsylvania’s Wharton School, Gail joined Boston Ventures Management Inc., a private equity firm specializing in the communications, media, and entertainment industries.

Gail is a frequent start-up judge, mentor, and speaker in Boston for such organizations as The Capital Network, The Angel Capital Association, MassChallenge, Boston University, Harvard Business School, and IBM. She is a Board Director for Groupize, a travel technology company providing innovative solutions that automate all of the tasks involved in booking groups online.

Through Community Consulting Teams of Boston, an organization of volunteer business-school graduates, Gail recently helped to create the strategic plan for a non-profit serving people with eating disorders. She has served on numerous committees, and participated in fundraising events, for her four children’s schools and colleges, as well as Boston area health care organizations.

Robert Adelson, business and tax attorney and partner at the Boston law firm of Engel & Schultz LLP (www.engelschultz.com), and Chairman of IEEE Boston Entrepreneurs’ Network (ENET). Rob began his legal career as an associate at major New York law firms Dewey Ballantine and later Weil Gotshal & Manges, before returning home to Boston in 1985 where he has since been a partner in small and medium sized firms before joining his present firm in 2004. Rob represents entrepreneurs, start-ups and small companies, independent contractors and employees and executives. His main practice areas are: Business formation, allocation of equity and angel and VC finance; Commercial contracts, licensing, alliances; Executive employment, stock, options and severance; Trademarks, copyrights, trade secrets; M&A. For his work representing CEOs and C-level executives, Rob has a personal website www.exectuiveemploymentattorney.com Rob is a frequent speaker on business law topics and author of numerous articles published in Boston Business Journal, Mass High Tech and other publications. Rob has been on the ENET Board since 2002 and Chairman since 2009 and is also a Board member of the 128 Innovation Capital Group. He holds degrees from Boston University, B.A., summa cum laude, Northwestern University (Chicago), J.D., Law Review, and New York University, LL.M. in Taxation.

Moderator:

Stacey Arbetter, Co-founder & CEO of Mutt Maps, Inc., http:/muttmaps.com/ Stacey is a Serial Entrepreneur of several successful startups including the leading supplier in North America of an industrial product for the transportation industry and, previously, the largest independent exporter of automobiles in the U.S. Excels at identifying market opportunities. She is motivated by new challenges where complex, innovative problem-solving skills and business strategy can bring direct and immediate value to an enterprise. Stacey latest startup is Mutt Maps. Mutt Maps is a web app developing a community for pet owners that delivers community-reviewed, geolocated, pet-friendly places, services and products.