10 Rules For Preventing Dysfunctional Founding Teams


If a member of your founding team is causing problems, potential (and current) investors aren’t going to be pleased.

Entrepreneur and investor Simeon Simeonov writes in a recent blog post, “I prefer companies where no one founder can force or block key votes against the wishes of the rest of the founding team and investors.”

How can you protect your company from the dangers of misbehaving founders?

Simeonov has drafted a list of 10 guidelines for building a balanced founding team and preventing such power struggles. Some of his highlights:

  • Have a clear, written agreement in place pre-incorporation
  • Beware of agreeing to big severance packages
  • Craft your board so that each member cares about the company foremost, not personal ties
  • Don’t give any one founder too much power in terms of voting thresholds
  • Consider alternating the founder board seat for set periods of time

Read the entire post at Simeonov’s blog >

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