The Start Conversations 2.0 yesterday, on Finding the Perfect Start Up Team, was a great event, even if I did have to lug bottles of wine and water from Farringdon to Clerkenwell! 25 Entrepreneurs, including some would-be-entrepreneurs, and advisors knocked around the subject of constructing that core team of co-founders. We talked about everything from chemistry to contracts and I for one left with a lot of interesting and new thoughts.

Here is a summary of the evening’s best advice in terms of forming your core team. I suspect if anybody follows all of these, they’ll do quite well!

(Note: this is all about the first 2-3 or 4 people in your team. The co-founders. This is not about “hiring”, it’s about putting together the starting team.)

1.       Go with your instinct: when selecting people, listen to your gut. Don’t hire the most impressive candidate if something’s bothering you and not quite right about him/her.

2.       Give it your best shot, and then some: Hiring your core team is the most important decision you’ll make. Give it your utmost attention.

3.       Better than you: The trick in entrepreneurship is hiring people better than you. This is probably the biggest difference between hiring for a start up and hiring in a corporate environment.

4.       Co-Founders: One of your first challenges as a founder is to actually sell the idea to people to get them interested. Enough to spend their time and effort, for very little initial returns. If you can’t get a co-founder interested, your chances of getting customers and investors are quite low. 

5.       Start Up Weekends: Plenty of businesses use the model of creating an intensive weekend in order to come up with a start up concept, team and plan. Launch 48, Start Up weekends. I’m not a fan of this model, as it seems a bit like manufactured pop bands, but I’m sure it works excellently for some. I haven’t been through one of these, so I can’t really say I’m speaking from experience either.

6.       Don’t ignore the science: Don’t completely ignore the science of hiring and performance management. Usually you have neither the time nor the resources to consider Myers Briggs tests and other “corporate” tools. But give yourself time to occasionally read what you can and explore what you can implement.

7.       Create Culture: Creating a strong culture at work, is a very good way of attracting the right kind people. It might be as simple as doing non-work stuff together, or creating a friendly office environment. But don’t ignore it.

8.       Go to parties: Not just parties, go to meet ups, tweet ups and all manner of groups where entrepreneurs and people with ideas hang out. Don’t try and find a co-founder through a head-hunter, or through overly structured channels. Used tools like Linked In, have coffee with people. 

9.       Do the paperwork: Don’t get carried away by all the excitement and positivism around the start up. Make sure you create the right contractual frameworks. Create checks and balances in the memorandum and articles of association. It’s your business. And it’s not a game. Use an accountant or lawyer if required.

10.   Get the skill mix right: Make sure you have the right skill mix. A CTO is essential if you’re doing anything on the internet. And he/she needs to own the business just like you do to really make it work.

11.   Look to the future: your core team will all be leading bigger teams as you grow. Make sure you’re core team is capable of that growth. Or you’ll end up needing to replace them early.

12.   Difficult Conversations are good: if you’re not having arguments or difficult conversations, you’re doing something wrong. Sometimes you need to take a hard call. Somebody might not be pulling their weight. Be ready to have those conversations early rather than leave it to fester – they just get harder.

13.   Consider Inter-company deals: If your potential co-founder runs his/her own company, consider doing a deal between the two companies, exchange stock, perpetual licenses, and other inter-company tools, which can give you an option to diluting your stake.

14.   Use Options: Don’t give away all the shares up front. There’s nothing you can do unless you’ve made provisions in your memorandum & articles. Ideally, let your cofounders earn their share of the business over time.

15.   Fix a Strike price: this is the price at which your co-founders will be able to convert their options. Often at the point when they will also be selling some part of their shares to new investors or acquirers. Agree the conversion price in the options contract.

16.   Think “relationship”: it’s not unlike a girlfriend, boyfriend, or a spouse. You will end up spending a LOT of time together. You will have a honeymoon period. You will need to work through many issues. And you will need to have a basic chemistry that is right, else it will fall apart very quickly.

And a few points about a Board of Directors: a) be clear about what exactly you want from a Non Exec Director b) remember to draw up a terms of agreement, even if it’s just a sheet of paper and c) be prepared to change, if required.

Many thanks to Andrew Scott (@andrewjscott, http://www.magicaljaguar.com),  Diana Proca (www.workinstartups.com), Bernadette O’Reilly (www.lucamedia.com), for sharing valuable experience and also to Dreamstake, Workspace and all the participants from the Start Up Conversations 2.0