Chapter 9: Intro to Entrepreneurship: Building a New Venture Team
Three formal responsibilities of a board of directors
(1) appoint the firm's officers (the key managers), (2) declare dividends, and (3) oversee the affairs of the corporation
elements of new venture team
-key employees -board of directors -other professionals -lenders and investors -board of advisors -management team
common mistakes made in putting together a new venture team
Placing unqualified friends or family members in management positions. Assuming that previous success in other industries automatically translates to your venture's industry. Presenting a "one person team" philosophy—meaning that one person (or a small group of people) is wearing all hats with no plans to bolster the team. Hiring top managers without sharing ownership in the firm. Not disclosing or talking dismissively of management team skill or competency gaps. Vague or unclear plans for filling the skill or competency gaps that clearly exist.
liability of newness
The set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business.
skills profile
a chart that depicts the most important skills that are needed and where skills gaps exist
founding team
a group of people with complementary skills and a shared sense of commitment coming together in founding an enterprise to build and grow the company
board of directors
a panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm.
virtual assistant
is a freelancer who provides administrative, technical, or creative assistance to clients remotely from a home office
advisory board
is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. Unlike a board of directors, an advisory board possesses no legal responsibility for the firm and gives nonbinding advice.
inside director
is a person who is also an officer of the firm
freelancer
is a person who is in business for themselves, works on their own time with their own tools and equipment, and performs services for a number of different clients.
consultant
is an individual who gives professional or expert advice. New ventures vary in terms of how much they rely on business consultants for direction
outside director
is someone who is not employed by the firm
employee
is someone who works for a business, at the business' location or virtually, utilizing the business' tools and equipment and according to the business' policies and procedures.
homogeneous
meaning that their areas of expertise are very similar to one another, they are likely to have different points of view about technology, hiring decisions, competitive tactics, and other important activities
heterogeneous
meaning that they are diverse in terms of their abilities and experiences
qualities of the founders
prior entrepreneurial experience relevant industry experience networking