This blog has moved to Thanks for reading

Sunday, April 11, 2010

Founders Consulting

TLP brings together people interested in starting companies, or those already working at a startup. One of the most difficult challenges for these founders is maintaining a source of income while trying to start a company. One of the most common solutions is for founders to work as consultants, but it is challenging for individuals to develop the contacts needed for a steady stream of consulting work. At a recent TLP workshop, a potential solution began to emerge...

What if a group of founders companies combined forces and networks to better distribute and support consulting contracts amongst themselves. This kind of idea might seem impossible if the same activities weren't already happening on an individual basis. I'm amazed with the amount of consulting work that individuals are able to generate. In some cases more than they can handle by themselves. Pulling in well qualified founders can support the consulting effort, broaden the network to pull from and help build a reputable brand that might even help launch the startup companies.

Immediately there are several problems that emerge, and point to reasons why TLP would be the perfect platform to launch such a program.

1) How would you gate the consultants appropriately?
Founders generally get consulting contracts through close personal relationships or past working engagements. There needs to be enough trust between members of such a group such that they would be trusted for referrals. This means that a personal network would work best, or some other form of selection process. The application process for an organization like TLP could perform this selection process.

2) How would you distribute the income?
In the simplest form, each person would share in the revenue according to their contribution. A more complex environment might allow for more senior members to obtain a minimum base payment as they transitioned into more advanced levels of their startups. Advancement within the group must be carefully controlled so that senior members are not payed to continue the pursuit of a failed idea.

3) How do you generate new business?
Personal and professional networks are essential for individual consultants. Each individual can continue to bring in business, but build a brand greater than just themselves.

So are you a founder with enough time for consulting, but not enough time for a full time job? Do you need a source of income? Do you have to turn away consulting opportunities because of a lack of bandwidth? If you're in TLP or thinking of joining, consider this model. We have already had conversations with two groups; one considering taking on energy and materials consulting, another looking at IT and software. There is no reason to limit the technology focus except based on the expertise of the partners.

Certainly there are enough lawyers who sponsor TLP programs to help structure this new company. If you're in TLP and you didn't sleep through the early workshops then you should know whether this should be an LLC, Partnership or C-Corp.

All we need now is a catchy name!

No comments: