Travel companions:
the choice of members.
Let me start by saying that this is a very delicate and complex topic on which I'm not a great expert. I've certainly had many partners , but I've also made a series of mistakes that I always promise myself I won't make when considering starting or joining a new company, but it's not that easy. What comforts me, or rather makes me ask many questions, is that companies and investment funds that are much more structured than I and my team still make mistakes about their partners, their travel companions, or their rules of engagement, which sometimes don't work for the company. Why does this happen? Below, I'll try to list a few rules that come to mind to try to make my small contribution to preventing partners from bickering or companies from being born without the legs and energy to run .
It may have happened to you too: when you decide to start a new business, the shares are decided a bit haphazardly: you do this, you do that, we'll divide the shares this way... in this regard, the film The Social Network comes to mind, where #Zuckemberg decides the shares on the college couch without asking too many questions.
RULE ONE: Never with an administrative manager - CFO.
Often, when an accountant is involved, it's unclear why: perhaps because the other partners think their work is extremely complex and crucial to the company's success, their contribution ends up being overestimated, and consequently, so too does the allocation of their shares. But be careful: accountants usually don't have an entrepreneurial mindset, they're short on time, and, ultimately, you're deciding to award shares to someone whose services you could easily purchase cheaply.
So here's a first rule I've given myself when I'm asked to join a company: if there's an accountant, a supposed CFO, or someone with an administrative role, alarm bells go off, and the siren goes off . This means the true value of the shareholders hasn't been understood and, more importantly, that the majority shareholder either lacks financial management expertise or will use the accountant as leverage. And this can almost certainly become a problem in the future, especially in relation to cash flow and financial sustainability.
Now that I think about it, this dynamic is truly curious... After all, Zuckerberg also brought Eduardo Saverin, a financier and CFO with whom he later fell out, into the company. From what I've read, his role as a financier was crucial, at least initially, because it allowed the company to get off the ground by purchasing equipment and servers. His role as CFO, however, contributed much less, and the duality of being both a shareholder and a CFO generated confusion, sometimes jeopardizing the company's development due to a lack of understanding of the direction the company was taking and how it was getting there.
Travel companions: the members' choice
SECOND RULE: It's better to travel in company.
A proverb comes to mind: in Veneto, they say, " there must be an odd number of partners, and in any case fewer than three ." I, however, think this is nonsense, because large businesses are born precisely thanks to multiple traveling companions. The Venetian formula of the sole man in command is that of the paròn, which almost always represents a particular style of #governance and often also limits growth, especially when the entrepreneur is unable to evolve and attract the right partners and managers to develop the company .
Instead, on a trip undertaken as a group (not surprisingly, it's called that), one member may have the idea and the vision, another may provide the finances or sales force, and yet another may be responsible for implementing the project. If the team is truly engaged and feels the initiative is theirs, I believe the trip works much better.
However, we must avoid haste and dedicate time to allocating shares , evaluating respective contributions, and above all, avoiding the mistake of imagining governance as valid only for the first year. It's crucial to understand who will do what and who will contribute what along the way, at least until the company is able to stand on its own two feet.
Let me give you an example. Imagine a partner contributes some initial capital but then doesn't contribute further, while a CTO is responsible for developing a software platform. The first partner has a specific and limited contribution and could make a commitment of an amount X, even spread over time, to guarantee a portion of the company's finances.
The second, the CTO, should instead remain engaged for at least three years, and the company will have to evaluate his contribution based on when it will be able to compensate him for his work. His ideas and skills must also be adequately valued .
THIRD RULE: For new companies, only operational or actively involved shareholders are allowed.
Let's talk about the birth of new companies: these arise from the idea of creating something that doesn't yet exist , but for this very reason they can't simply rely on the willingness of partners to "lend a hand in their spare time." Realizing a business idea is complex: perhaps not surprisingly, in Italy, a company is called #impresa.
For this reason, it must be clear from the outset what each member's contribution is, along with their "quantity" and value.
In my opinion, partners must put their heart and soul into the creation of the new company and truly make a difference in their area of expertise. It's therefore preferable to have partners who actually work within the company or who contribute truly essential assets (and not simply purchasable ones), such as databases, relationships, client portfolios, or specific knowledge. Their contribution must be measurable, perhaps by defining clear indicators.
If, however, there are purely financial shareholders, it is advisable for them to remain in a non-significant minority position, so as not to interfere excessively in governance.
I'm assuming that each member has an assigned role and consequently respects the other roles, and therefore there is governance based on the value of the team.
It's a matter of #respect for all members and the company: each member must carefully calculate their availability in terms of time and commitment and, on the other hand, what they can give up to help the cause.
It will then happen, almost inevitably, that as the company grows, those among the members will emerge who will truly make the difference : some will continue to evolve, to commit themselves and to remain #involved in the new challenges, while others will begin to no longer feel "at home", perhaps ending up by withdrawing or criticizing the #development of the "enterprise".
In these situations, I recommend reaching an agreement immediately and guiding the no longer interested partner towards a healthy exit, before the situation deteriorates.
This is what happened with my first partner at FiloBlu, Marco: once we reached a certain size, he felt he was no longer capable of managing the growing complexity. By mutual agreement, we decided to leave within a week.
When companies reach a certain size, in my opinion, these rules continue to apply. Critical situations usually arise with the arrival of new shareholders or a change in ownership . Even if the shareholders won't be directly involved, they must still monitor the investment, understand it, grasp the company's dynamics, and know the sector . They must contribute ideas, support management, and always do so with respect for the CEO and executives.
RULE FOUR. No friends and relatives. Professionalism is the watchword.
And here's where the problem lies: in principle, this should be a golden rule, but there are a thousand exceptions. It's better to have partners who aren't friends or relatives ... and yet, how many companies have been started by high school friends? I'm thinking of U2: don't say it's not a business, even though the initial idea certainly wasn't to make money, but to be successful and take their music around the world.
Many brands also come to mind that bear the name of the family that founded them : Fendi, Gucci, Pininfarina, Missoni, Zoppas, Amadori, Ferrero, Zegna, Antinori, Benetton, Angelini, Astaldi, Barilla, Beretta, Bracco, Colussi, Damiani, De Longhi, Guzzini, Loacker, Marcegaglia, Natuzzi, Olivetti, Scotti, Zuegg… I have mentioned many of them to make it clear how, contrary to what was said before, the value of the family can be decisive for the success of a company .
In any case, I believe that the success of these companies is determined by #culture, #intelligence, #foresight, #maturity, and #balance: there must always be a professional relationship within the company . Whether they are friends or relatives, it is essential to have the ability—and I would even say the preparation—to distinguish business roles from personal ones , avoiding transferring private #conflicts to the workplace. This helps prevent tensions and misunderstandings that can sometimes permanently affect the relationship, even outside the professional sphere.
After all, family feuds always happen over time: just think of #Gucci, as depicted in the film House of Gucci. And when friends argue at work, the friendship itself is often compromised. This is a key point: if you manage to find the right balance between private and professional roles, a truly magical factor is ignited . The list of successful companies created by real families demonstrates this. Who, in fact, can be more committed than a friend or relative who understands the value of what they are doing and makes themselves available even when situations become complex or irrational, because they are based on unconditional trust?
Author - Christian Nucibella