What Are The 2 Likeliest Mistakes You’ll Make Starting Your Company?
I've been coaching startup CEOs for several years now. There are two mistakes I see startup CEOs make time and time again.
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The sad thing is these mistakes are entirely preventable. I'll explain what these mistakes are and how you can prevent them in this short video.
Read The Video Transcript Below:
Over half of the entrepreneurs I work with have issues with their cofounders and usually those issues are catastrophic. Now, in most cases it doesn't kill the business. What it does, it leads to one of the cofounders leaving the company. That happens a lot.
So what does this mean to you? It means beware when you're starting your business. Who you start with is not necessarily who you're going to finish with.
And that means that you know these wonderful, lofty, idealistic dreams of, oh, we're going to split the equity together. You get 50% I get 50%. Okay, that may be what you do, but what else should you do? Have vesting schedule for the equity.
If you don't have investing schedule, you're crazy because it protects you. It protects your co founders from each other just in case somebody leaves, you know, now you're protected. Now that 50% equity if somebody leaves six months later is zero because most equity vesting schemes vest the first quarter in a year. So nobody vests anything in that first six months.
So anyways, be prepared is kind of the point here. But that's the most common problem that I see with the entrepreneurs that I work with is that problem. By and large, the biggest issue I see is that issue.
The second biggest issue I see, and usually I don't work with entrepreneurs in this area, but I see this a lot is entrepreneurs come to me and then they tell me, "you know what, I've got two months of money left, can you help me?"
And I usually say, no I can't because you really need about six months of time to raise money. So that's the second biggest problem I see.
So anyways, those are the top two. But that first one, founder issues, beware and be prepared. And then if you gotta raise money, prepare ahead. It's going to take you a minimum of six months to raise money. So start at least a year in advance.
You do those two things, prepare yourself, have a vesting schedule because sometimes founders don't work out and you give yourself time to raise that money. You'll be in pretty good shape. I'm Brett at www.brettjfox.com have a great, great day.