Team Selection and
Equity Division
Build a winning team
Relevant
experience
Shared values,
vision and
goals
Commitment
and drive
Winning
Team
Networks
Leadership
Technical skills
Value competence equal to personality
Are they competent?
Are they a good fit?
Do they have the ability and the skillset
to perform the job?
 Examine their CV
 Conduct an interview
 Call their references
 Conduct an aptitude test
 Assign a task as part of the
interview e.g. a marketing
plan / sales process
 Set
a
three
month
probation period
Will their personality suit the rest of the team and the type
of work you do?
 Go for a coffee / drink with them
 Think about your clients and whether they
would enjoy working with this person
 Think about the role you want them to do –
don’t expect a data analytics person to be able
to sell and vice versa.
 Do not hire in your own image! – People have
an unconscious biased toward someone
similar to themselves. If you hire replicates of
yourself you will lose out in diversity of ideas,
experiences and skillset, your team will be less
creative and your ability to win over a variety
of customer demographics will be limited.
Challenge yourself to build a team with
diversity of: gender, age, religion, race,
sexuality, socioeconomic status etc.
Equity division


Don’t give away equity, reward it to those who provide you with funding or
other means of value e.g. time.
What constitutes an appropriate reward?
 NED or chairman = 1 to 2% (+/-)
 Full time (non-founding) director = 5% (+/-)




The Enterprise Management Incentive Scheme (EMI) is for employees only!
Remember that a share option scheme (EMI) is an important motivator for
employees and can account for up to 10-15% of the equity in the business.
Safeguard your equity as it can be diluted further down the line if more
investors are required.
Take legal advice when drawing up your shareholder agreement.
See ‘InEn’s definitions’ in the business toolkit to understand various terms
including share options, dilution etc
Equity division: Elements and weighting
Consider what elements are important to your business and how important they
are. Below are some examples but you can choose your own or you can change
the weighting.
Element
Weight
Idea
6
Technology
6
Relevant experience and skillset
5
Commitment and risk
7
Roles and Responsibilities:
Finance
2
Technology
2
Marketing
2
Sales / Business Development
2
Operations
2
Network
4
Assign a score for each founder 1-10 and then
multiply the weighting by the score.
Element
Weight
Founder 1
Founder 1
Score
Weight
Score
Weight
Idea
6
10
60
0
0
Technology
6
5
30
10
60
Relevant experience and skillset
5
5
25
5
25
Commitment and risk
7
10
70
5
35
Finance
2
1
2
9
18
Technology
2
1
2
9
18
Marketing
2
9
18
1
2
Sales / Business Development
2
9
18
1
2
Operations
2
9
18
1
2
4
9
36
2
8
Total
170
449
Roles and Responsibilities:
Network
Total points
% of equity to be owned
279
279/449 = 62%
170/449 = 38%
100%
Look out for dangerous team dynamics





Loss of creativity – a team lacking diversity will lack creativity.
Risk takers – teams tend to make more risky decisions than the
average of their members’ decisions.
Groupthink – teams start to think like each other and approach
challenges the same way this limits the ability to think creatively or
speak up when somethings not working. Often problems will be
ignored.
Founder flounder – Founders of the company may refuse to consider
opinions or accept knowledge that runs counter to their own.
Communication challenge – team members may have something
valuable to contribute but struggle to communicate it or are
drowned out by louder, more assertive team members.
Disclaimer
 InEn Limited does not provide financial or legal advice.
 InEn
Limited cannot be held liable for any actions or
decisions taken by a member of InEn or anyone
reading this document.
 InEn Limited shares information to help entrepreneurs
navigate the business world.
 All readers or listeners of this information are required
to make their own independent decisions and seek
professional legal or financial advice when required.