What’s the best way to incorporate your business?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Kickstarter, PBC – AVC

There are those who say that Benefit Corporations and venture capital are not compatible. We don’t agree and we think companies that align their values with their customers and communities will benefit over the long term, not suffer. And that alignment can produce value for shareholders sustainably and profitably.

What’s the best way to create a good company culture?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Loyalists vs Mercenaries – AVC

Mission. People are loyal to a mission. I’ve seen super talented people walk away from compensation packages 2-3x what they currently make because they believe in what they are working on and think it will make a difference in their lives and the lives of others. This is why investing in mission driven companies can produce great financial returns.

What’s the best way to retain employees?

Sam Altman (President at Y Combinator)
Employee Retention – Sam Altman

A great work environment. This consists of two things–cultural values and team

Sam Altman (President at Y Combinator)
Employee Retention – Sam Altman

If employees work at your company because they believe in the importance of the mission, they are unlikely to be tempted by more money elsewhere. Find a way to give everyone new challenges all the time.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Parental Leave – AVC

Each company needs to decide when and how they can consider such a parental leave policy. But for those that have the scale to consider this approach, I am strongly in favor of it and share Chad’s belief that what is good for employees and their families is good for business.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Path Forward – AVC

Our portfolio company Return Path built a “returnship” program a few years ago to help stay at home moms and other men and women who have left the work force to take care of children, sick parents, etc figure out how to get back into the workforce.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Why Startups Should Train Their People – Ben’s Blog

After putting economics, aside, I found that there were two primary reasons why people quit: 1) They hated their manager – generally the employees were appalled by the lack of guidance, career development and feedback they were receiving. 2) They weren’t learning anything – the company wasn’t investing in the employees.

Patty McCord (Chief Talent Officer at Netflix)
How Netflix Reinvented HR

The best thing you can do for employees—a perk better than foosball or free sushi—is hire only “A” players to work alongside them. Excellent colleagues trump everything else.

Jeff Bezos (Founder & CEO of Amazon)
EX-99.1

Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is “Please Don’t Take This Offer. ” We hope they don’t take the offer; we want them to stay. The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying some… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Access Code – AVC

Providing coding training to underserved adults who can fill tech jobs, as Access Code is doing, is another part of the talent equation that can make significant immediate impact. If you feel like you can support this effort with your time or your money or by hiring Access Code graduates or by teaching a class, please do so.

David Jackson (Founder, Seeking Alpha)
The two factors which determine how successful and happy you will be at work | A Founder’s Notebook

Only two things matter for individuals: Do you get to do what you are best at / love doing every day? Are you in a company where growth and success will spawn opportunities for you?

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

You need to take your employee base and categorize them as A’s, B’s and C’s. Any goodwill is already lost if they come to you and ask you for something. The golden rule of keeping employees happy is unexpected increases in compensation, role, or even just recognition.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

Often the amount of equity increases you can give isn’t going to have a profound impact. If you wait to give it at annual review time you’ve already lost the upper hand in terms of controlling the emotion.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

If you’re short on cash, the obvious place to increase people is equity. Another motivator is when you give people people gifts or experiences that are unexpected. For example, dinner for four at a top restaurant.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

If someone’s told you they want to break up with you, you’ve probably already missed out. Never roll out your red carpet when the employees on the way out the door. The key is to get ahead of it before you’ve missed out.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

Another easy give is title. I know people are afraid of title inflation. Suprisingly people can get motivated by increases in responsibility or if you publicly praise them infront of others.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

Another easy win frankly is taking them out to dinner and telling them how important they are to you. Invite their partner, boyfriend/girlfriend, spouse and make it a social dinner.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Retaining Your Employees – AVC

There isn’t one secret method to retain employees but there are a few things that make a big difference.
1) Communication – the single greatest contributor to low morale is lack of communication. 2) Getting the hiring process right – a lot of churn results from bad hiring. 3) Culture and Fit – Employees leave because they don’t feel like they fit in. 4) Promote from within. Create a career path for your most talented people. The best people are… (read more)

Bart Lorang (Founder & CEO of FullContact)
Paid Vacation? Not Cool. You Know What’s Cool? Paid, PAID Vacation

Once per year, we give each employee $7500 to go on vacation. There are a few rules: You have to go on vacation, or you don’t get the money. You must disconnect. You can’t work while on vacation.

Maura Thomas (Award-winning speaker, trainer, author)
Your Late-Night Emails Are Hurting Your Team

Being “always on” hurts results. When employees are constantly monitoring their email after work hours — whether this is due to a fear of missing something from you, or because they are addicted to their devices — they are missing out on essential down time that brains need. Refrain from after-hours communication. Discourage an always-on environment of distraction that inhibits creative flow.

What’s the best way to incorporate your business?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
From The MBA Mondays Archive – AVC

Flow through corporate entities don’t pay taxes, they pass the income (and tax paying obligation) through to the owners of the business. Tax paying entities pay the taxes at the corporate level and the owners have no obligation for the taxes owed. Your neighborhood restaurant is probably a “flow through entity.” Google is a tax paying entity. When you buy 100 shares of Google, you are not going to get a tax bill for your share of their earnings a… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
From The MBA Mondays Archive – AVC

The key distinguishing characteristics of a LLC is that you get the limitation of liability of a corporation, you can take investment capital (with restrictions that we’ll talk about next), but the taxes are “flow through”. Most companies, including tech startups, start out as LLCs these days. Owners in LLC are most commonly called “members” and investments or ownership splits are structured in “membership interests.”

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
From The MBA Mondays Archive – AVC

As the business grows and takes on more sophisticated investors (like venture funds), it will most often convert into something called a C Corporation. Most of the companies you would buy stock in on the public markets (Google, Apple, GE, etc) are C Corporations.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
From The MBA Mondays Archive – AVC

A nice hybrid between the C corporation and the LLC is the S corporation. It requires a simpler ownership structure, basically one class of stock and less than 100 shareholders. It is a “flow through entity” and is simple to set up. You cannot do as much with the ownership structure with an S corporation as you can with a LLC so if you plan to stay a flow through entity for a long period of time and raise significant capital, an LLC is probably b… (read more)

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Lastly, this doesn’t apply to everyone, but a C-corp makes decisions on what’s best for its shareholders and in contrast, many people here are starting healthcare based companies and they have social impact and social good, so one thing you can potentially do, this is a bit of an outlier, but you should consider potentially being a benefit corp, when they make decisions, they make decisions on what’s best for the community. A lot of financial dec… (read more)

Sam Altman (President at Y Combinator)
Startup Playbook

As a tactical point, you will usually need to be a Delaware C Corporation to raise institutional capital, so its best to just incorporate that way.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
From The MBA Mondays Archive – AVC

When you start a business, it is important to recognize that it will eventually be something entirely different than you. You won’t own all of it. You won’t want to be liable for everything that the company does. And you won’t want to pay taxes on its profits. Creating a company is implicitly recognizing those things. It is putting a buffer between you and the business in some important ways.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Kickstarter, PBC – AVC

There are those who say that Benefit Corporations and venture capital are not compatible. We don’t agree and we think companies that align their values with their customers and communities will benefit over the long term, not suffer. And that alignment can produce value for shareholders sustainably and profitably.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
From The MBA Mondays Archive – AVC

And most of all, get a good lawyer and tax advisor. Though they are expensive, over time the best ones are worth their weight in gold.

What’s the best way to create a good company culture?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

People are the reason companies fail. They can also ruin the culture. The wrong leader can cause dysfunction, they can cause fighting, they can cause people to quit as well. Always have a very low tolerance for under-performers. One thing you learn over time if you’re going to be successful is you need to have to courage to have the hard conversation to let someone go. We had a mantra, “Hire slowly, fire fast.” It serves us quite well.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Loyalists vs Mercenaries – AVC

Mission. People are loyal to a mission. I’ve seen super talented people walk away from compensation packages 2-3x what they currently make because they believe in what they are working on and think it will make a difference in their lives and the lives of others. This is why investing in mission driven companies can produce great financial returns.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Loyalists vs Mercenaries – AVC

In the Bay Area and NYC, your employees are constantly getting hammered to leave for more cash, more equity, more upside, more responsibility, and eventually it leads to them becoming mercenaries. It is incredibly hard to hold onto a team in the Bay Area and NYC. If you are building your company in Ljubljana, Waterloo, Des Moines, Pittsburgh, Detroit, or Indianapolis, you have a way better chance of building a company full of loyalists than if yo… (read more)

David Jackson (Founder, Seeking Alpha)
Moments that clarify what your values really are | A Founder’s Notebook

Here’s an interesting exercise: Instead of making a list of the values you’d like your company to have, make a list of the 5 core values you observe in practice. If your hiring, firing and promotions reflect your true values, then these events become values and clarifying moments for people in your company.

Caryn Marooney (VP Technology Communications at Facebook)
The Best PR Advice You’ve Never Heard – from Facebook’s Head of Tech Communications | First Round Review

To develop a compelling message, Marooney advises running it through the RIBS test: Relevant. Inevitable. Believable. Simple.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Loyalists vs Mercenaries – AVC

Teams come in all flavors. There are highly loyal teams that can withstand almost anything and remain steadfastly behind their leader. And there are teams that are entirely mercenary and will walk out without thinking twice about it. I once saw an entire team walk out on a founder. That company survived it, remarkably.

Sam Altman (President at Y Combinator)
Startup advice, briefly – Sam Altman

In addition to building a great product, if you want to be really successful, you also have to build a great company. So think a lot about your culture.

Dharmesh Shah (Co-founder and CTO of HubSpot)
Happy Birthday HubSpot! 9 Lessons From Our First 9 Years

Once you start writing your culture down, a couple of surprising things will happen: 1) You’ll realize you got parts of it wrong (because people will tell you). 2) You’ll increase the chances of hiring for “culture fit” without falling into the trap of toxic homogeneity where you just hire people like yourself under the guise of “culture fit”.

Dick Costolo (Partner at Index Ventures, former CEO of Twitter)
Pando: What Phil Libin learned from Dick Costolo, Steve Ballmer, and Jerry Yang

“You can’t preserve the culture, if you try to preserve it then you’re locking it into place, it starts to stagnate,” Libin said Dick Costolo told him. Costolo explained that the CEO’s job is not to preserve the culture, it’s to evolve it intentionally in a certain direction.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Values – AVC

Values matter. A lot. In a hypercompetitive world where technology eats at every advantage you have over time it is good to have unique and distinct values that you live as a company. That’s a form of differentiation that is not easily copied. It matters and is at the core of building great companies. The kind of companies I like to talk about when people ask me about my best investments.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What I Have Learned From Kickstarter – AVC

Maybe the most important lesson I have taken from Kickstarter is that you have to build your company in your own mold. There is no one right way to do it, as much as the advice giving pundits (me included) would tell you otherwise.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
How To Be In Business Forever: Week Three – AVC

Mercenaries have no place in your company and your culture. Doubters are a bit different. You certainly don’t want to create a culture of “yes maam” in your company. So some doubting is healthy. But it should be out in the open. The doubts should be expressed upfront and they should be discussed and debated. But once the decisions have been made, everyone needs to get behind them. Ongoing doubting is not helpful to a culture.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
How To Be In Business Forever: Week Three – AVC

So if you want to build a business that lasts, you need a big and long vision and you need to be a leader who can inspire the team to believe in the vision and to believe in you. You need to hire folks who will stick around for the long haul and you need to be open to the doubts and doubters. But if they keep doubting, you need to part company with them. Don’t hire mercanaries. They won’t work no matter how hard you try.

Scott Kurnit (Founder & CEO @ Keep)
MBA Mondays: Guest Post From Scott Kurnit – AVC

Many cultural imperatives are the same at every company. That doesn’t mean you shouldn’t write them down and socialize them, but come up with the 3 or 4 that make your company special, that make someone want to join your company… or not. Your people ARE your culture. The culture quickly takes on a life of its own.

Scott Kurnit (Founder & CEO @ Keep)
MBA Mondays: Guest Post From Scott Kurnit – AVC

Culture was extra important to the About model since our business needed to get big fast, but it also showed me that defining a culture sooner than later builds the best business foundation. It seems so obvious, but out of 150 start-up CEOs I’ve discussed this with I found only three who pre-determined their culture. That’s crazy!

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Who is us?

Who is us?
When you build a tribe or a movement, you’re asking people to join you.
To become, “one of us.”
That means, though, you need to be really clear who ‘us’ is. Not just who am I joining, but what does it mean to be one of you?

Peter Thiel (Co-Founder & Partner at Founders Fund)
Contently Founder Shane Snow ’10JRN Interviews Peter Thiel – YouTube

One of the things I’ve heard, I don’t know if its true is — If you have three really good friends at the company you’re working at, you’re likely to stay indefinitely. If you have zero good friends at the company you’re working at, you’re at high risk of turnover.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
How to Minimize Politics in Your Company – Ben’s Blog

Build strict processes for potentially political issues and do not deviate—Certain activities attract political behavior. These activities include: (1) Performance evaluation and compensation (2) Organizational design and territory (3) Promotions