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Why Techies Need a Business Partner
December 03, 2013 at 11:06 AM
While thinking about technology founders the other day, I came across this great post from Lori Collins. It is spot on advice for tech founders. Tech startup founders might even take this expert advice a step deeper to search out an ‘entrepreneurial’ who is proven in the startup world…
Last week I had two very different conversations with two very similar companies. Both had technical founders in the same general industry, but one founder had managed to recruit a team including a former McKinsey consultant, an investment banker and a seasoned sales lead – all willing to work for equity. The other founder was waiting for funding to recruit a business partner. Which company would you bet on?
If you need a business partner, don’t wait for funding. It is highly unlikely that funds will come first. Investors want to see a team, and you’ll need some business savvy to put together a pitch or even a grant request.
Here’s some advice for recruiting business partners:
- Get exposure to the business community. Join networks, incubators, accelerator programs or university challenges to get on the radar. Let people know that you are open and interested in finding a strong business partner.
- Sell your vision. Money follows vision. And that money includes people working for no cash because they believe in the vision. If a business person can see the market potential and the uniqueness of your product, they may be willing to take the risk to come join you.
- Be willing to share equity. It makes no sense to hold onto 100% of nothing, when you could recruit a team to build you company and own 25% of something. Ownership is a strong motivator, so share some upside when you find talent interested in creating the future with you.
- Be willing to share cash. When the cash does come in, from investors or revenue, then it’s time to start paying enough to keep your team together. The dance of negotiation will determine how much and how soon, but the carrot of a strong vision for the future will keep negotiation on your side.
- Be willing to share control. New owners want to put their fingerprints on the strategy and priorities for the company. You may think they are crazy, and maybe they are, but that’s where your powers of persuasion and willingness to share risk come to bear. Your new partners want to succeed as much as you do, and are investing their sweat and time as well as giving up other income opportunities. Trusting the intelligence and intention of your team is the only way to go.
- Lori Collins, Strategic Advisor, Emerging Ventures
Lori has always loved starting new things, and cut her teeth building new businesses at great companies like American Express, Fidelity Investments, Bank of America, and LendingTree. Just recently she served as President of Abundant Power Solutions, an emerging energy financing venture in Charlotte. She was an early adviser to Clean Power Finance in San Francisco, and a Board member then CEO for SmartHippo, a startup in Montreal positioned as the “TripAdvisor for financial services” that provided consumer ratings and reviews on lenders.
As a member of the original Executive Team at LendingTree, she helped grow the company from $7 million to $476 million in revenue over seven years and participated in the sale of LendingTree (NASDAQ: TREE) to IACI (NASDAQ: IACI) in 2003 for $750 million. It was a wonderful ride in many respects – an amazing values-based culture (“winning despite obstacles”), a focused mission to be the dominant online loan exchange, and awesome all-day Halloween parties.
At Bank of America, she led the mutual fund marketing team that grew assets from $28 to $68 billion. At Fidelity Investments, she helped launch their mutual fund marketplace and led the team to drive assets from zero to more than $9 billion in three years. At American Express in New York, she helped envision and launch American Express Gift Cheques as well as various travel insurance products. She’s a Tarheel alumni and also admits to being a Wildcat, although she didn’t have much time for sports in grad school at Northwestern.
What the Arts Have to Do with It
Inspiration comes from many places, and for Lori, it’s the arts. Lucky to be in the inaugural class of the Innovation Institute at the McColl Center for Visual Arts, she and her classmates learned the discipline of creative thinking from artists, sculptors and craftsmen. Now she has the great pleasure of working with Dwight Rhoden, a world class choreographer and founder/owner of Complexions Contemporary Ballet in New York, to create a new work for the NC Dance Theatre’s Innovative Works annual performance. She’s learning the creative process from Dwight by commissioning his work, and savoring the rare treasure of “angel investing”.
Lori currently serve as a strategic adviser and coach for emerging ventures, particularly in the areas of marketing, business development and strategic growth. She’s a coach for SEED20 innovators and is helping launch the Social Innovation Fellowship, an accelerator in Charlotte, NC for social entrepreneurs.