Forming a Founding Team

The “right” size for your founders’ team ..................................................................................66 Waiting too long to incorporate ..................................................................................................66 “Moonlighting” in your new business while still employed elsewhere ............................... 76 Not properly assigning intellectual property to the company ...............................................77 Don’t miss an 83(b) election if you issue stock with vesting to the founders ......................85 Forgetting to protect the other founders in the event a cofounder departs .........................86 Founders’ checklist ....................................................................................................................... 89 Sample founders’ capitalization model ..................................................................................... 93

“Great teams can turn a mediocre idea into a profi table and successful business,” says Diane Fox, founder of PartnerUp, a resource for entrepreneurs. “A great team can help your company expand and grow beyond your wildest dreams. On the fl ip side, a great idea, executed by a shoddy team, is nothing more than a recipe for failure.”