Wednesday, January 25, 2012

should the person who came up with the idea necessarily have more say or ownership in the venture?

Entrepreneurship: When starting a venture with a small group, should the person who came up with the idea necessarily have more say or ownership in the venture?

Written by Taffy Williams
   
There are too many ways to address this question.  However, here is one that relates to having IP and clear ownership of the concepts for the company.  The answer may be similar for others.   Inventions are like coming up with the idea first.  The patents allow for protection of the technology and build a moat around the business.  This is critical.  BUILD a MOAT around the buisness.   The person that came up with the idea or the patent owner has the ability to license the technolgy to a company.  The inventor can also obtain the license if it is a University or Company asset other than the startup.   Now comes the difficult part.  Who is best to run the company or have the most say.  The simple answere is the one that has the strongest management, leadership, and ability to bring in the investment capital.  That may not be the inventor or person that came up with the idea.   Sometimes, the inventor is selected to be on the Board of Directors.  Sometimes on a Scientific Advisory Board. This allows the person with the original idea with an ability to have strong input, but they do not run the company nor are they the face of the company.   Investors want to see a strong team.  The people need to be able to work together.  The CEO runs the company, but those in his main circle of management have strong input.  If they can not do the job, they are asked to leave.  It does not matter if you are an inventor or the person that came up with the idea.   Think of it as a pure business decision.  If you have strong input and it can help make money for the company and its investors, you are going to be listened to.  If you are not able to contribute, you will eventully be asked to leave.   Best work out this stuff before forming the company, or look out for the wars that take place AFTER forming the company.

Taffy Williams's answer to Entrepreneurship: When starting a venture with a small group, should the person who came up with the idea necessarily have more say or ownership in the venture? - Quora

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