1. Team Selection and Equity Division

2. Shared values, vision and goals
Build a winning team
Relevant experience
Commitment and drive
Shared values, vision and goals
Winning Team
Networks
Leadership
Technical skills

3. Value competence equal to personality
Are they competent?
Do they have the ability and the skillset to perform the job?
Examine their CV
Conduct an interview
Call their references
Conduct an aptitude test
Assign a task as part of the interview e.g. a marketing plan / sales process
Set a three month probation period
Are they a good fit?
Will their personality suit the rest of the team and the type of work you do?
Go for a coffee / drink with them
Think about your clients and whether they would enjoy working with this person
Think about the role you want them to do – don’t expect a data analytics person to be able to sell and vice versa.
Do not hire in your own image! – People have an unconscious biased toward someone similar to themselves. If you hire replicates of yourself you will lose out in diversity of ideas, experiences and skillset, your team will be less creative and your ability to win over a variety of customer demographics will be limited. Challenge yourself to build a team with diversity of: gender, age, religion, race, sexuality, socioeconomic status etc.

4. Equity division
Don’t give away equity, reward it to those who provide you with funding or other means of value e.g. time.
What constitutes an appropriate reward?
The Enterprise Management Incentive Scheme (EMI) is for employees only!
Remember that a share option scheme (EMI) is an important motivator for employees and can account for up to 10-15% of the equity in the business.
Safeguard your equity as it can be diluted further down the line if more investors are required.
Take legal advice when drawing up your shareholder agreement.
See ‘InEn’s definitions’ in the business toolkit to understand various terms including share options, dilution etc
NED or chairman = 1 to 2% (+/-)
Full time (non-founding) director = 5% (+/-)

5. Equity division: Elements and weighting
Consider what elements are important to your business and how important they are. Below are some examples but you can choose your own or you can change the weighting.
Element
Weight
Idea 6
Technology
Relevant experience and skillset 5
Commitment and risk 7
Roles and Responsibilities:
Finance 2
Marketing
Sales / Business Development
Operations
Network 4

6. Assign a score for each founder 1-10 and then multiply the weighting by the score.
Element
Weight
Founder 1
Score
Idea 6 10 60
Technology 5 30
Relevant experience and skillset 25
Commitment and risk 7 70 35
Roles and Responsibilities:
Finance 2 1 9 18
Marketing
Sales / Business Development
Operations
Network 4 36 8
Total points
279
170
% of equity to be owned
279/449 = 62%
170/449 = 38%
Total
449
100%

7. Look out for dangerous team dynamics
Loss of creativity – a team lacking diversity will lack creativity.
Risk takers – teams tend to make more risky decisions than the average of their members’ decisions.
Groupthink – teams start to think like each other and approach challenges the same way this limits the ability to think creatively or speak up when somethings not working. Often problems will be ignored.
Founder flounder – Founders of the company may refuse to consider opinions or accept knowledge that runs counter to their own.
Communication challenge – team members may have something valuable to contribute but struggle to communicate it or are drowned out by louder, more assertive team members.

8. Disclaimer InEn Limited does not provide financial or legal advice.
InEn Limited cannot be held liable for any actions or decisions taken by a member of InEn or anyone reading this document.
InEn Limited shares information to help entrepreneurs navigate the business world.
All readers or listeners of this information are required to make their own independent decisions and seek professional legal or financial advice when required.