A startup needs to be ultimately picky about bringing on upper management. The higher up the hierarchy, the harder it becomes to get rid of a bad pick, and this is order of magnitudes more important for a Founder. Serious due diligence is in order.
Some of the major considerations would be something like:
- What is the motivation for joining?
- What networks will be introduced?
- What will be the effect on company direction and momentum?
- What is a fair yet competitive equity allocation?
For motivation, money hunger is a good one, but there are others that may be even more important. Looking into my own motivations for founding a startup I recognize my own money hunger, but even more importantly is a deep desire to create something unique and create it well. There is a real sense of satisfaction I derive from a job well-done, and I like to see that mirrored in the people around me. Whether that’s the doing of the dishes, writing an Executive Summary, or expressing an orderly line of code.
Networks, what is there to say beyond, that Rolodex is your friend?
The effect of momentum is huge. Obviously someone who will only slow the momentum is a non-starter. Startups are a time crunch. As long as the startup nomenclature applies, you can assume it is on the razors edge of sufficient capital, sufficient business, sufficient development, and greatness or extinction. A startup is a balls-to-the-wall experience, truly.
However an accelerated momentum beyond the creativity and capacity of the team is just going to lead to pain, and shoddy execution. Know what is a comfortable momentum, and then make sure you have accelerators on your team that know how to nudge it a bit beyond comfort.
Company direction. Strategy. Everybody loves to strategize. Just make sure to bring on someone who is smarter than you at this, or don’t waste your time and just fill the role yourself. But opt for that smarter person.
And equity, everybody wants it. The C-Levels of the company need skin in the game and that’s equity allocation. Equity of 1-2% is pretty standard for a CEO level position in a company with a competitive salary. In a lean startup post financing, a lack of competitive salary has to be equalized with a larger stake, there’s no other way around it. Considering a $20 million valuation, 10% equity is generous. (If your working on the right problem with the right effort, it’s not too hard to get to a $20 million valuation.)
I really think we have amazing talent at Doubloon, by considering these questions on top of all the normal questions. Pick up great talent immediately, but when in doubt, feel pain and wait for talent.