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  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   2  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   3  

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  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   4  

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’)  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   9  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   10  

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  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   11  

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  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   12  

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  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   13  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   14  

Stock  Op%ons  for  Startup  Employees  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   15  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   16  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   17  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   18  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   19  

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  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   20  

Stock  Op%ons  for  Startup  Employees  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   22  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   23  

Silicon  Valley  Leaders  in  Company  Culture  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   25  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   26  

Leaders  in  Crea%ng  Strong  Company  Culture  

in  Europe  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   27  

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    

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   28  

Apr  20  2015   Copyright  2015  Burton  H.  Lee  and  Innovarium  Ventures  |  Silicon  Valley   29  

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THANK  YOU  !!  

Dr.  Burton  Lee  European  Entrepreneurship,  Stanford  Engineering  www.StanfordEuropreneurs.org  |  @Europreneurs  Burton.Lee@innovarium.net  

 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:  Burton.Lee@innovarium.net                                                                Based  in  Palo  Alto,  CA  near  Stanford  University  –  Bio/References:  LinkedIn  Profile  –  Lecturer,  European  Entrepreneurship  &  InnovaFon,  Stanford  School  of  Engineering