Ockham Technology PAPER
Ockham Technology – what happened?
Board of Directors
Raised first round from VCs (Noro-Moseley & Monarch), with each getting one seat on the board
Added a 5th, very experienced industry person
Development/outsourcing –
Outsourced to ThoughtMill
Also hired Gus as internal development team leader
Founder tensions
Tensions continued to grow, and worsened after Ockham hired a COO
Mike left
Company sold in 2002 to competitor
Splitting Founder’s Equity
Lesson #1
Considerations in Allocating Initial Ownership
Potential Problem – Ockham founders split only based on amount of initial equity
Other criteria to use:
What cash, ideas, & property contributed?
If property, what is value?
What contributions are founders expected to make in the future?
What opportunity costs will each founder incur?
Career risk taken by each founder
Financial demands faced by each founder
May have to reserve ownership for future founders.
Potential problem - split equity very early
Dynamic equity-splitting
Building a Board
Lesson #2
Boards and new ventures
The Benefits of Having an Independent Board
Brings perspective and experience, and a set of complementary skills for the CEO
Recognize the need for long-term planning and assist in long-range strategies
Can provide a framework for control and discipline and give CEO someone to answer to
Can be challenging and objective critics, serving as an internal check for CEO
Can be mentor or coach
Can lend credibility
The Size of the Board
5-9 people
Small enough to be accountable and to act as a deliberate body, but large enough to carry out the necessary responsibilities.
Outsiders should outnumber the insiders
Usually, no more than 2 insiders on the board.
Type of Representation Needed on Board
Need functional skills needed to keep the business running smoothly and to bring business to next level of growth
Need right mix of personalities
Should inventory the resource needs of the company before you begin recruiting the board:
What is the
Board of Directors
Raised first round from VCs (Noro-Moseley & Monarch), with each getting one seat on the board
Added a 5th, very experienced industry person
Development/outsourcing –
Outsourced to ThoughtMill
Also hired Gus as internal development team leader
Founder tensions
Tensions continued to grow, and worsened after Ockham hired a COO
Mike left
Company sold in 2002 to competitor
Splitting Founder’s Equity
Lesson #1
Considerations in Allocating Initial Ownership
Potential Problem – Ockham founders split only based on amount of initial equity
Other criteria to use:
What cash, ideas, & property contributed?
If property, what is value?
What contributions are founders expected to make in the future?
What opportunity costs will each founder incur?
Career risk taken by each founder
Financial demands faced by each founder
May have to reserve ownership for future founders.
Potential problem - split equity very early
Dynamic equity-splitting
Building a Board
Lesson #2
Boards and new ventures
The Benefits of Having an Independent Board
Brings perspective and experience, and a set of complementary skills for the CEO
Recognize the need for long-term planning and assist in long-range strategies
Can provide a framework for control and discipline and give CEO someone to answer to
Can be challenging and objective critics, serving as an internal check for CEO
Can be mentor or coach
Can lend credibility
The Size of the Board
5-9 people
Small enough to be accountable and to act as a deliberate body, but large enough to carry out the necessary responsibilities.
Outsiders should outnumber the insiders
Usually, no more than 2 insiders on the board.
Type of Representation Needed on Board
Need functional skills needed to keep the business running smoothly and to bring business to next level of growth
Need right mix of personalities
Should inventory the resource needs of the company before you begin recruiting the board:
What is the