I want to take my company (tech consulting) from one-man show to a bigger one. I have my business plan and know I can make it – but not alone. I need to scale. I would like to bring in people (VP Business Development, CTO) to help with business development and project execution. How do I make sure these guys are “stakeholders”, in it for the long run and not just until they find a good job? More generally, how are “stakes” granted? Can you point me to a good resource to help me understand this (fully)?
by Steve Hoffman, Cofounder of Founders Space
I’ve been in your shoes, and I know exactly what you’re saying.
You can never be sure that whomever you hire will not jump ship when the going gets tough. The only thing you can be sure of is that people tend to gravitate towards the best opportunities.
As long as the people you bring on feel that your startup is the best opportunity they have, they’ll stick with it.
One way to grant a stake is through a well-structured stock option plan. I’ll let one of our lawyers give you advice on this, since setting one up is quite involved.
But on practical level, you should worry more about how to get to the next level, than whether people will stick around. If you hire people you feel are “loyal” but who aren’t able to get your business to the next level, it won’t do you any good.
You need to think of who can get you to your next major milestone as effectively as possible and bring that person onboard. Don’t worry about whether or not they’ll stick with your company for years. It doesn’t matter. The typical lifespan of startups is one year. What matters is that you succeed in the next year, and to do that you need people who can make a difference immediately.
Maybe it’s not full-time employees you need. Maybe it’s contractors. Or a combination. Identify exactly the type of talent you need, and go after that talent with a deal that is attractive to them in both the short and long term. But don’t expect that talent to stick around unless they see your company taking off.
I hope this helps!