Incen%vizing Top Talent to Join Your Startup: Doing It the Silicon Valley Way Dr. Burton Lee European Entrepreneurship, Stanford Engineering www.StanfordEuropreneurs.org | @Europreneurs Startup AddVenture Zagreb 2015 April 20 2015
Jul 15, 2015
Incen%vizing Top Talent to Join Your Startup:
Doing It the Silicon Valley Way
Dr. Burton Lee European Entrepreneurship, Stanford Engineering www.StanfordEuropreneurs.org | @Europreneurs
Startup AddVenture -‐ Zagreb 2015 April 20 2015
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What can European startups can learn
from them ??
How Silicon Valley Thinks About Incen%ves for Startup Founders & Employees
• CriFcal to future growth of company • Alignment of incenFves with business goals • AIract and retain new employees • Build strong and cohesive teams • Support creaFon of proper company culture • Empowerment • Building the local startup & investor ecosystem culture & knowledge base
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Map of Presen%ng Speaker Na%onali%es
European Entrepreneurship & Innova%on @ Stanford Engineering
(ME421)
Winter 2014 – Year Six
Enterprise Estonia Silicon Valley
Ghent, Flanders Region Belgium
iMinds ICT Research Ins%tute
February 10 @ Stanford Engineering Jeff Lynn, Seedrs (UK) & Matija Kopic, Farmeron (HR)
January 27 @ Stanford Engineering Vassil Terziev & Japec Jakopin
Mentoring Croa%an & SEE Startups at Geek Business Camp,
Brown Forum, Osijek, April 2015
Osijek Startup Teams Oben Missed These Key Issues
• Poor team cohesion • Confusion over who is ‘Founder’, ‘Co-‐Founder’ • 1 founder + employees ?? • Uneven engagement and energy across team members • Major disconnects between technical and sales/markeFng teams
• ‘Employees’ vs criFcal members of the team • Insufficient recogniFon/Ftles that do not reflect real role and degree of responsibility – Usually too low (“Project Assistant” vs ‘VP, Sales’ or ‘CMO’)
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A one man show??
or A Solid Team that can
Work under Stress, Pivot and Grow?
How Silicon Valley Thinks About Incen%ves for Startup Founders & Employees
• CriFcal to growth of company • Alignment of incenFves with business goals • AIract and retain new employees • Build strong and cohesive teams • Support creaFon of proper company culture • Empowerment • Building the local startup & investor ecosystem culture & knowledge base
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Different Startup Environments
Silicon Valley • Fast-‐moving markets,
compeFFon & companies • Rapid growth, rapid failure • Strong compeFFon for talent
(technical, sales, etc) • High mobility of talent between
companies • Work 6-‐7 days/week, 12-‐14 hour
days • Strong stock opFons legal regime,
tax policy, culture • Higher startup valuaFons • Frequent company exits
Europe • Slower markets & decision-‐making,
less compeFFon • Less compeFFon for talent • LiIle mobility of people between
companies • Most employees seek secure job,
salary & benefits • Work 5 days/week, 8 hours • Stock opFons are viewed with
suspicion, only for senior execs • No or poor legal regime for stock
opFons • Lower startup valuaFons • Slow exits market
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Typical Startup Employee Incen%ves
Silicon Valley • Stock opFons • Company culture (fun,
energy, engagement, change agent)
• Title & recogniFon for work performed/success
• PromoFon & challenges • Salary • Perks (food, play, services) • Benefits (health, etc)
Europe • Salary • Title • PromoFon • Perks • Benefits
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Stock Op%ons for Startup Employees
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Stock Op%ons for Startups
• Get the founders’ stock arrangements right! • Establish an overall game plan for equity incenFves – Establish a stock opFon plan with an established reserve
– Plan should be geared for anFcipated headcount growth over a 12-‐18 month period
• A stock plan is a formal wriIen document approved by the board of directors and the shareholders
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Stock Op%ons for Startup Employees
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Silicon Valley Leaders in Company Culture
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Leaders in Crea%ng Strong Company Culture
in Europe
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World Class Startups Out of Croa%a
Rimac Automobili Zagreb, Croa%a
Key Takeaways • Stock OpFons for Founders & Employees
– USA is probably best place to establish legal ‘home’ due (in part) to presence of strong system for founder & employee stock opFons plans
– Easiest to issue opFons to European employees from US plans – Very well understood by US law firms – check your naFonal tax laws
• Company culture – Key to future growth of company – Founders should think about culture early on
• Titles – Pay early aIenFon to Ftles !! – Public recogniFon for team contribuFons – Poor Ftles send strong signals to team, customers & investors about how founders view colleagues and future growth
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@Europreneurs
Speaker Presentation Slides
www.slideshare.net/burtonlee1
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‘StanfordEuropreneurs’ ‘European Innovation @Stanford’
www.StanfordEuropreneurs.org me421.stanford.edu
THANK YOU !!
Dr. Burton Lee European Entrepreneurship, Stanford Engineering www.StanfordEuropreneurs.org | @Europreneurs [email protected]
Working in Silicon Valley, Europe, La%n America and Washington DC
• Senior financial, technical and strategy advisory services for global technology innovaFon organizaFons • Professional Services
– Technology startup and growth companies • Interim CXO and Advisory Board roles • Expert guidance & decision-‐making at the interface between market/customers, technology and finance • Business development – industrial and government • Business plan preparaFon/research/review; Government Grant proposal preparaFon/review • Coaching and mentoring of CEOs and other CXO-‐level managers • Assistance with government regulatory and policy agencies
– Angel, venture capital and private equity Investors • Fund strategy, team selecFon and market posiFoning • Due diligence: technical, financial, strategy and business models
– Public and non-‐profit R&D laboratories • Technology transfer & partnerships; venturing and spin-‐out of companies; strategy and business development; grant applicaFons
– Research universiFes • InnovaFon-‐related models, policies and pracFces • Technology transfer and licensing; industry partnerships and relaFons; development and strategy; grant applicaFons
– NaFonal and regional government agencies • InnovaFon policy formulaFon, analysis and review; cluster development strategy; economic impact studies • Science & technology policy formulaFon, analysis & review: space, aviaFon, nanotechnology, sosware/AI/roboFcs, manufacturing
• Selected recent clients – US/European technology startup companies – alternaFve energy, roboFcs/AI, sosware, Internet, nanotech – Venture and private equity funds – aerospace, nanotechnology, ICT, compuFng, advanced materials, clean tech – Office of the Prime Minister, Ireland; European Commission; NaFonal Science FoundaFon; NASA, NaFonal Academies
• Dr. Burton Lee PhD MBA, Managing Director – Contact: [email protected] Based in Palo Alto, CA near Stanford University – Bio/References: LinkedIn Profile – Lecturer, European Entrepreneurship & InnovaFon, Stanford School of Engineering