Too many ventures are burdened by ‘dead weight’ founders and partners. This can seriously sap momentum and even kill a deal for a strategic alliance or for venture capital. If this is happening to your venture then take control today to clean up any tangled messes among partners, no matter what the cost, or else pay the price.
Often a VC or strategic partner is interested in moving forward, but a range of unresolved issues among people involved with the venture are now stumbling blocks to doing a deal – or even to finishing due diligence. These might be misunderstandings, misaligned expectations, or outright disputes about roles, contributions, equity shares or technology ownership.
How Does One Find Themselves in a Founder/Partner Quagmire?
Typically a start up venture has a champion who enrolls their friends, family or other associates to help at the early stage of a venture when the entrepreneur has no resources. Associates offer to help out for various reasons – perhaps out of friendship, or they may have keen interest in the app, technology, product or service. Others have hopes to snag an official role in the venture as it grows and hope to win a big payout if things go well.
The entrepreneur’s motives are usually much simpler and short term. Struggling to develop a product or launch a company, the entrepreneur looks around to pull in any breathing person who can relieve some of the stress to help get 100 things done at once. With little or no money, entrepreneurs respond openly to friends’ and associates’ offers to help with a bit of code, prepare some branding materials or to make a few sales introductions. But all this is often done in a vague manner with very little clarification of expectations or responsibilities and most often with no documentation. This is especially becoming harder to manage as entrepreneurs work at incubators, accelerators and co-working spaces where the thrill of cross-pollination is enjoyed on a personal level, but which may launch the venture into perilous waters in terms of the entity’s corporate interests.
Take Control of Your Venture’s Destiny
As the venture champion, you are the captain of the ship. You must intentionally chart the course, design the team and draw upon experienced start up advisors in order to define and navigate your venture to a desirable destination. Bring clarity to the ownership and management of the venture as soon as possible. By addressing partner confusion you will set the stage for renewed energy and momentum for developing the technology and business. And you will also be able to meet new strategic partners and potential investors with confidence. Finally, you will have smoother exits when the time comes, while still maintaining friendships. So if you find you are now in such a quagmire, by all means, don’t be afraid to throw overboard any dead weight players in order to keep the venture moving onward and upward.
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About the Author
Sylvester (Syl) Di Diego, Managing Partner, Strategy Dynamix, LLC is a venture accelerator and venture consultant who has assisted hundreds of entrepreneurs and investors to successfully navigate the venture growth lifecycle and to ReDesign, RePosition, ReLaunch and to Scale technologies, products, services and businesses. Learn more about Syl and connect with him at http://www.strategydynamix.com/aboutus/executives.php