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Tuesday
Sep252012

CEO School: Early Decisions Can Sink Your Startup

CEO School is a series of posts that aims to help founders of direct selling startups with the principles of knowledge they must possess in order to build a successful direct selling business.  This is Part 2 of 23.

So you've decided to raise the capital you need to start or continue with your new business?  Now you'll need to think about how to structure your startup.  How many owners?  Do you want partners?  Who's CEO?  Will some partners be employees? Which ones?  How much equity do you give away?  Do we want VC money?  When is the right time to approach VC's?

These are crucial questions.  Many startups have failed due to decisions made at this early stage.  It's the reason why this subject is Part 2 in our series.  It's that important.  There might be moments down the road where you wish you could magically go back in time, and NOT have made a certain decision.  Some outside money isn't worth it, if it means giving away too much equity.     

"If you want to be rich, then you must be an owner.  You must strive with every fiber of your being to own as near to 100 percent of any company as you can." - Felix Dennis

Noam Wasserman is a Professor at Harvard Business School, and he's also the author of "The Founder's Dilemma".   I encourage every future founder of any startup to read his book.  For 10 years Mr. Wasserman has studied over ten thousand startups, with the goal of researching and analyzing the decisions that make them successful, or sink the venture altogether.  He's made it his life's mission.  He reveals and discusses the common problems that entrepreneurs are faced with, and provides solutions to the types of decisions that lay the foundation for a successful startup.  

Nothing is messier than creating a business from scratch.  You owe it to yourself to read this book, and avoid all those mistakes.    

Below is Author Noam Wasserman discussing the subject of his book "The Founder's Dilemma". 

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