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Mark Suster: Start on Your Own

Name: Mark Suster: Start on Your Own
Uploaded: 2010-11-23T01:21:14+00:00
Duration: 1 min 35 s
Channel: GHION.AI
Description: Mark Suster argues founders give away too much equity too early, sometimes losing two-thirds of their company's value before building anything. Build…

23 Nov 2010 · 2 min

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1:35

Mark Suster argues founders give away too much equity too early, sometimes losing two-thirds of their company's value before building anything. Build your product solo first to capture the premium for taking the initial risk, then bring in investors and talent. He learned this at Andersen Consulting, where teammates later joined his venture for 1% after he'd already proven the concept.

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Heresy. The biggest dilution that comes to you as an individual comes before you ever see an evil venture capitalist. You're going to argue to me that you should only take 22% dilution instead of 24%. We're going to fight over 0.75%. You're going to fight with me about whether we should have a 15% option pool versus a 17% option pool versus a 13% option pool, but you're willing to see two-thirds of the value of your company walk out the door before you've ever done a day's work. I just don't get that. I don't get it. If you're trying to create something and create value for yourself and you have the confidence of your conviction, My recommendation is to start on your own. And that's the biggest heresy that I'll ever say. Now, there are people for which are missing certain skill sets to build a company. That's okay. I just have a sequencing for them because you are paid such a premium to take the first leap. My Andersen Consulting experience, sitting around with a bunch of guys who just kept saying, oh, we should do this and we should do that, and I frickin' did it. And then they came to work for me for 1%. And they come to work for me for 1%