This is Part II of Tony Staunton’s talk at Entrepreneurs Anonymous. Part I is here.
“Get your equity sorted early,” Staunton told the group, “before it starts to get awkward.”
Discussions should be held early with all who are getting a stake, he said.
Clear agreements will prevent disputes and hurt feelings later. “I’ve heard some horror stories,” Staunton said.
Protect your equity. A related piece of advice was to protect equity. A founder’s equity stake can get whittled down quickly, he reminded the group.
During the question and answer session, Staunton noted a founder’s equity can get diluted quickly. An accelerator program may take 10 percent and co-founders will have to get a share that makes their sacrifice worth their effort.
Have clear goals: This advice was given to people considering accelerators. Most of them last just three months. In Staunton’s case, it was to sign up three paying customers.
Network: A late convert, Staunton said, “I didn’t really believe in it.” However, that was how he found his Board of Advisors. It is also a great way to get the word out about your product or service, and a way to find potential customers, he said.
He also filled some skills gaps particularly in sales and finance where he felt he was weak.
Get honest feedback: It is easy to surround yourself with yes men (or women), Staunton said. But entrepreneurs need the unvarnished truth about their performance. “It’s nice to hear honest feedback, even if it’s bad,” he said.
Image of fish in business via Frits Ahlefeldt-Laurvig aka HikingArtist.com on Flickr.