"How do You Find your Wife?" and other such compelling questions and answers on team-building....

At our second Alliance of Angels Alumni event, panelists Robert Bergquist (CEO of Widemile) , Jeremy Jaech (CEO of Trumba) and Glenn Kelman (CEO of Redfin) shared some gems on team-building with a standing-room only crowd. John Cook of the Seattle P-I both moderated and blogged on the event, and much of the panel's wisdom was amply covered there. Here, we’ve indexed some additional insights from panelists and moderator alike.

ABR

• Always be Recruiting: the acronym of the day, coined by Bob Bergquist.

Chemistry

• Asked “how do you find the right team member to add to the founding team?,” Jaech responded “how do you find your wife?” It’s not just about hiring the resume.

Compensation

• Kelman suggested an employee response : "3% raise? 3% my a**! I need to move out of my parents’ house!"
• Bergquist: With pay, we can’t match the big guys, but there are intangible benefits to being part of a startup.
• Kelman: It’s a red flag is a prospective employee asks for a big severance package. Don’t even negotiate, just don’t hire.
• Bergquist cautioned that everyone has a different concept of fair, so surface those expectations, and match them.

Competition

• On out-recruiting the competition in the Bay Area, Kelman suggested: It’s tough when Stanford students come into Seattle on a rainy weekend. Facebook is basically hiring their entire class. However, Microsoft just backs up a bus in Silicon Valley and trucks ‘em up here.
• On recruiting talent away from the competition, Jaech noted: We’ve seen great programming talent out of Microsoft, but being a monopoly they don’t necessarily know how to sell.

Costanza

• When Glenn described his refusal to leave the building after being fired from Plumtree, Cook suggested he was the George Costanza of the start-up world (1992 Pez Dispenser episode, where George rejected the breakup).

Executives

• Jaech: With your executive team, you need trust. I don’t mean love and affection, you just can’t be checking up on people all the time.

Firing

• Kelman recalled commentary from a start-up COO mentor of his “I couldn’t fire the f-ers fast enough!" Glenn further reflected how the CEO of Alaskan Airlines had advised him to hire slow, fire fast.

Founders

• Jaech: Build your business around the team you have; don’t wait to hire those critical skill sets.
• Cook has interviewed more than entrepreneur who claimed to be a member of the founding team when they came on board 5 months after the company’s inception. He’s on to you so, don’t even try it.

Referrals

• Regarding employee referrals, don’t you want to expand the gene pool? Bergquist noted that in Seattle, it’s two degrees of separation, however…….

References

• ...all panelists suggested the tightly-knit Seattle community is no excuse not to do thorough reference checks. Jaech cautioned employers to listen for coded language in reference checks. "Don’t just ask their last boss- they might be trying to get rid of them!"
  

Recruiting

• When asked about the success of joint recruiting events, Kelman suggested the co-host has to be a somewhat attractive company to work for, just less attractive than Redfin.
• How long does the CEO stay involved in interviewing new hires? Bergquist predicted: "I’ll be interviewing for a long time to come."

80 entrepreneurs and 80 degrees

How do you get 80 entrepreneurs to spend two hours together in an 80 degree conference room? Free advice and free beer.
Despite the weather and a pesky motorcade, we had a great turnout for an end-of-summer kick-off of our Entrepreneur Roundtable series. With over 2000 companies applying to the AoA process over the last decade, we felt there was tremendous knowledge in this group that could and should be shared within it. No service providers, no vendors, no solicitors-- just early-stage entrepreneurs the AoA had interviewed. We basically stepped out of the way, let the entrepreneurs get to know each other over beer and pretzels, and put together a panel moderated by Madrona Venture Group's Geoff Entress, featuring DRY Soda's Sharelle Klaus and Buddy TV's Andy Liu. And though more DRY Soda was consumed than beer, we had a lively bunch that wasn't shy about asking questions, just a few of which are noted below:

• How did you support the business before getting angel funding?
• Andy: founder investment from prior exit. Sharelle: claiming to be "cheap" (read: capital efficient), she obtained a home equity loan, used credit cards, and received a small SBA loan (didn't require collateral, just lots of paperwork)
• Takeaway: founders with "skin in the game" inspire investor confidence, and "cheap," in a word, is good (apologies to Gordon Gekko).
  
• What metrics or milestones were critical in getting you funding? (asked Lynn Brewer, Integrity Institute)
• Andy: waited until the company was cash flow positive to approach angels, and also obtained a critical mass of unique visitors to the site
• Sharelle: needed to show sell-through in at least one key distribution channel
  
• Thoughts on convertible notes? (Steve McCracken, Green Couch Conspiracy)
• Geoff: generally tries to avoid--not because of the downside risk, it's the lack of upside (see our previous post on the topic)
  
• Pros/Cons of funding from angels, strategic partners, VCs
• Andy: with angels the funding tends to be completed more quickly, VC's tend to be focused on ROI, and strategic partners bring additional value to the business, so at the end of the day, if given the opportunity, choose whichever route will grow your business the most quickly and effectively.
• Note: Sharelle was asked about valuation in her angel round, and if she would have increased it if she could do it over again. She noted that while some may have perceived the deals as investor-friendly, she was able to close both her A and B rounds quickly (the first in 3 weeks), so it's hard to argue with that outcome.
  
• How often do your portfolio companies really communicate with you? (Joel Gendelman, NTuitive)
• Geoff: official quarterly reports are sufficient, a monthly touchpoint is even better, and the assumption (right or wrong) is that no news is bad news...so stay in touch!

If you've previously interviewed with AoA and the above was enough to whet your appetite, email us to be added to the invite list and join the conversation. We've planned quarterly meetings and welcome suggestions on both topics and panelists.