How Do the Needs of Entrepreneurial Businesses Change Over Time?

Video Transcript

Let me tell you a bit about how I think the needs of entrepreneurial businesses change over time, and there are really three things that I think about. First off, your team. Your team is going to grow and with that growth comes the need for new employees that have more increasingly complex compensation arrangements that have to be dealt with and retaining those employees and how you do it and how you come up with ways to keep their interests aligned with that of the company is going to be increasingly complex as the business grows. Secondly, financing. When you start out, the first money that you’re going to raise either from your friends and family or from angel investors is going to be all about the first thing that you’re doing, which is creating a prototype of the product or service that you want to have. Maybe it gets you to the point of getting your first customers.

As you start to grow the business, your financing needs are going to change and now you’re going to be working hard to scale the business and it will require a different kind of capital and probably a lot more capital, to scale it to a level where ultimately you can create an exit for both you and your investors, whether that’s through a public stock offering or through a sale of the business. And finally, just keep in mind, as I’ve said, complexity. As your business goes, you will have issues that arise in the international sector and in other areas that you haven’t thought about and that’s where, of course, good counsel like us will help you think about those things as you’re moving forward with the growth of your business.