I think I have a good idea for hiring my startups first employees

Business Forum

Running Your Business

People: Hiring, Partnering, Mentoring

I think I have a good idea for hiring my startups first employees

New Topic

Post Reply

Follow Topic

Page of 1

Author
Message

synergestic

posts: 5

Apr 27, 2007 12:33 PM ET Quote Report Abuse

Points: 0 Vote


	April 23rd, 2007

15 Startup Commandments

Posted by Mark Fletcher under How To | 8:03 am
14 Comments

I started my own software company a little over a year ago, and I`m finally starting to see some business come my way. I would like to hire a team of engineers and sales people to help take my company to the next level. However, I am bootstrapping and would rather give my equity to a team of dedicated professionals rather than venture capitalists. I envision a scenario where I find two or three software developers and one or two sales people to take an equity stake in my company. After the company reaches a certain revenue threshold, I would pay a market-rate salary and benefits. Any feedback on this idea would be appreciated.

ToddF

posts: 261

Apr 27, 2007 1:56 PM ET Quote Report Abuse

Points: 0 Vote

So, your saying that the employees would be part owner then at some point your going to buy them out? Honestly as the employee, why would I go for that, the whole point they`re even accepting the idea is for ownership not being bought out. I don`t mean to shoot the idea down, it`s a good idea, there`s just too much to worry about. If they own part of the company they have a say, and you may not like it. I think there should always be one boss, not a group.

-------------------------

He who gets greedy like a pig, gets slaughtered like a hog!

synergestic

posts: 5

Apr 27, 2007 2:04 PM ET Quote Report Abuse

Points: 0 Vote

I don`t plan to re-purchase the stock, but provide traditional compensation in addition to the equity stake after the company crosses a certain revenue threshold. You definitely raise a valid point about having "multiple chefs in the kitchen" though.

cutts

posts: 27

Apr 27, 2007 6:45 PM ET Quote Report Abuse

Points: 0 Vote

Hi, I have seen this strategy used to attract senior executive level employees post stage 1 funding but not for general sales staff. Many sales reps will work on a fixed retainer + commission which helps keep your costs down. The other issue is determining what your business, and hence equity, is actually worth so that you can make an offer. This in itself is problematic unless you have raised capital already and established a corporate value of some form.

The other option is to find a professional development company and have them work on a retainer basis to find sales / distributors for you. This is normally a lot cheaper than employing sales staff. You need to set the game plan though for the development company and dont get locked into long term committments.

Hope this helps

-------------------------

Business Development Services

Sirk002

posts: 5

Apr 27, 2007 8:21 PM ET Quote Report Abuse

Points: 0 Vote

Finding the right people who can put food on their own tables with an "equity stake" in lieu of salary is the hardest part. However, these people exist, and once you`ve found them, structuring the agreement is not very difficult. There are many ways to approach it but one way to consider is to sign the employees up for an equity subscription that would vest at certain periods, or after project completion etc.

Any good business lawyer will be able to suggest plenty of alternatives that will allow you to retain control over the company while giving the employees the upside potential of their efforts. But in short it is a do-able idea. Best of luck.

DJonQBOS

posts: 14

May 20, 2009 8:14 PM ET Quote Report Abuse

Points: 0 Vote

We are looking to add a few key sales people in the near future. The commission model can work very well. A draw against future commission is one way to get top producers, once your company has some positive cash flow. However, if they don`t produce at some point they would need to be cut off. I have found that once they get a few sales in place, a weekly draw is feasible for everyone involved. Once a sale is in place, our model is based on a monthly residual income stream.

vinays

posts: 16

May 20, 2009 11:08 PM ET Quote Report Abuse

Points: 0 Vote

Do you know of any independent sales company or agents who work on a pure commission basis ? We are a startup based out of Boston and cannot open a sales office or employ dedicated sales staff at this stage.

Page of 1

Post Reply

Keep the Community Clean!

StartupNation forums should be used as a platform to learn, educate others, share stories, tips & tricks and to provide constructive feedback.
Please do not use the Forums for advertising & blatant self-promotion.
Please be respectful to other members and refrain from personal attacks and vulgar language.
StartupNation reserves the right to delete any message, reply, and/or member who violates our terms of use.

Read full terms of use

Contact Us Privacy Terms of Use Become a Marketplace Provider Advertise Local Guides Site Map Home Business Start a Business

Business Forum

Forums: Discussions for entrepreneurs and small business.

I think I have a good idea for hiring my startups first employees

Keep the Community Clean!