Compensation · Venture capital

Compensation & VC's

Bethany Londyn Catalyst Consultant, Real Estate Agent, & Speaker

March 29th, 2013

I'm working on developing a team of higher end executives that have experience in the StartUp world as I make pitches to investors.

What I'm trying to figure out is if VC's will accept a letter of intent for the VS's, and then also a game plan for their pay structure of salary and stock. It obviously has to be worth it if for the executives if they are willing to make a switch. Any thoughts on this?>

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Christian Klacko High Tech Executive & Entrepreneur

March 29th, 2013

A great question with no "standard answer"... I have been in this situation before and found out that the best way to do this is to bring these execs on the board of advisors first. Then tell the VCs that some of these execs would be great candidates to run the company as soon as it is funded.

Keith Bourne Senior Mobile Software Engineer and Mobile Strategist at JOOL Health

March 29th, 2013

To begin with, that should be enough.  Everything shakes out in due diligence.  So you obviously want to make sure it is legit, so no one wastes their time.  But if that is the case, they will end up talking with the execs at some point to check on this kind of stuff.

Paul Travis Multifaceted Online Executor: Product Marketing to Program Mgmt. to Business Development

March 29th, 2013

I agree.  Another thing that helps if if they show early commitment by being in your pitches, even if they still have a day job.

Mark Piekny Engineer, Consultant & Entrepreneur

March 30th, 2013

I am in a similar situation right now Bethany.  My approach is as Christian describes.

Rob G

March 31st, 2013

Bethany, if these experienced execs indeed have experience in the startup world then they should be your primary  source of answers for questions like this - they should know what VCs expect, but as Christian mentioned i would first pull these execs into a BOA to get to know their commitment level, how they problem solve, how they strategize together, etc. Letter's of intent are going to mean a whole lot to the VCs - not nearly as much as action, i.e. time commitment, cash invested, quit their day job, etc. 

Bob Crowley Investor, Entrepreneur, Athlete

April 7th, 2013

Bethany, Ditto on the suggestions above.  I'd add that the right fit for you should be executives you've had some mileage with (ie BOA or prior working together), trust and therefore, participate in the VC discussions when appropriate and at the very least assist you with positioning properly for this question. 

Scott Durgin Founder & CEO 440labs

April 7th, 2013

Having your soft team in place is key, but as expressed above any serious investors will most likely meet and vet the team members out anyway. If you have a particular resource that is essential to the business (domain, skill, etc.) you will want to formalize this relationship, minimally BOA but something more meaningful is better (with active involvement day-to-day or at least week-to-week). I would take full advantage of this window to work more intimately with any potential executive (or any potential employee for that matter) to really make sure you've got the right team assembled.