I wanted to write a post to cover off a few things:

Firstly, to bring to light the frequency of start up founding relationships not working out over the short / medium term.

Secondly, for founders to recognise the importance of having the conversation about what would happen in a break up early on.

Thirdly, to talk about how you should set up your vesting and shareholders agreement to prepare for the worst case scenario.

1. Partnership breakups: It happens for different reasons

2. Plan and talk about it early, even if it’s an awkward conversation

• What are the roles that each co-founder will have in the organisation, how are those expected to change over time?

• What are the deliverables or measures of accountability with each founders’ role?

• How big a company do we want to build?

• How much dilution are you prepared to have along the way?

• Are we both committing to this journey full time, when will that change?

• Is it our life’s work or does one founder consider it to be more of a project?

• How long would you be happy to be in the business for, what’s our time horizon?

• Is there a time at which, if X milestone hadn’t been reached a founder would give up, or are we both committed to the bitter/sweet end?

Once this conversation has been had it’s good to document this understanding in a formal way and clearly outline the steps that would be taken if a founder wants to leave. What is the mediation process, the meetings, the board discussion etc. How is this decision finally made? Having a simple understanding of how this will work can avoid a lot of distraction and dysfunction if the situation does arise.

3. What next? The pragmatic steps to take

So, the best practice in our experience is to document a vesting in a shareholder’s agreement that outlines the plan. Here is a great Simmonds Stewart Document Maker that can be used to set this out. Generally, we would advise a vesting period of 3–4 years. It takes a long time to create value in a company in most cases. If the vesting schedule is too short, or too much is vested on close of financing and a co-founder leaves the business, they could leave with 20–30% of the company. This is an awkward situation for the company and does not bode well for the next financing round if a large portion of the cap table is sitting with a now ex-employee that will no longer contribute to the future success of the company.

So to sum up; What can you do to avoid a founder break up?

1. Set up your vesting schedule with the worst in mind.

2. Focus on internal communication and getting comfortable with strategy among the team.

3. Let people know if you are feeling overwhelmed in the business and talk about it to avoid a total blow up!

In all cases — an exiting founder is a stressful and all-consuming process. But if you have the guard rails setup from which to operate within, it can make the process a lot easier.

Business is Boring is a weekly podcast series presented by The Spinoff in association with Vodafone Xone. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt. This week Simon talks to Ben Reynolds about how his company Spalk is making sports commentary more accessible. 

Have you ever turned on your favorite live sports game to be disappointed by the commentators? Maybe it is an Aussie butchering Māori or Pasifika names, maybe it is just that they are talking out of their hats.

Well, Ben Reynolds and Michael Prendergast did something about it. They used internet software to do their own commentaries, growing to thousands of fans who would tune in despite audio delays, lags from live action and all sorts of technical shortcomings – shortcomings in which they saw an opportunity.

So they built the perfect system to allow multiple commentaries on a single stream of video.

They prototyped, launched and have now built the tool into Spalk, a service that has let millions view video with their audio and is used by Māori TV, FIBA and soon lots of American sports outfits to allow choice for viewers and savings for broadcasters.

It’s an idea driving up viewership, engagement and getting backing from capital. It’s earned them a place at the Vodafone Xone accelerator that kick-started their growth. To talk the journey so far and the plans ahead, Ben Reynolds joined the podcast. 

You started out with the idea of providing alternate commentary for sports, pretty much for fun. Did you see pretty soon that there were actually people whose home team was playing and they weren’t getting their side of the story out?

Yeah, exactly, so what we did after we built this little hacky version of Spalk was we went out and said to a bunch of amateur sports organisations, hey, you’re not actually streaming anything, can we put some of your content online so us and our friends can commentate it?

So our first partner was Auckland Cricket, who streamed a bunch of their Plunket Shield matches and a bunch of their county level cricket games, and so we’d be sitting there with a camcorder following the action on the side of the field, streaming it to YouTube, it would go onto our system, and then people would be commentating it from all around New Zealand.

Soon we had a commentator in Australia, and then one in London. The commentators were growing and growing. We started doing a lot of work with other amateur sports organisations, the likes of New Zealand Swimming and New Zealand Squash and a lot of those other sports who weren’t quite at the broadcast stage but were really keen to get content online so their fans could commentate it.

We were getting good numbers of people tuning in and listening to all this good commentary. We had professional players coming on and commentating tournaments, and kids who’d just finished up at their high school champs coming on to commentate their friends and all sorts of things like that.

We started seeing a lot of grassroots people coming in and getting really really excited about what we were doing.

Did you have to build out the infrastructure to actually film everything and live stream it in order to get the Spalk idea off the ground? 

It was interesting, at that stage we didn’t really think that places like SkyTV or Māori Television who are one of our really good partners now would ever take us seriously. So we said to ourselves, what’s the easiest way that we can get access to some content? And the easiest way was to just do it ourselves. 

I borrowed a camcorder from Mum and Dad and figured out how to stream everything online and it was a pretty hacky setup with a camcorder on the side of the pitch and me sitting there texting scores through to the commentators so that they could give score updates because there was no score graphic or anything up on the screen.

We got the numbers and that really validated that we had a kernel of something interesting.

With that kernel you then went to Māori TV who were one of your first big broadcast partners. Was that driven by the horrendous mispronunciations of Māori and Pasifika names you hear?

Yeah that was part of it. It’s funny because they actually ended up coming to us. They got in touch and said hey, we’ve seen what you guys are doing and think it’s really interesting from the ability to have multiple different languages.

Obviously as a state broadcaster they’ve got to provide a certain level of coverage in te reo Māori so for them it was a really easy way to say here’s a really easy way to do English commentary, Māori commentary, and hey, if we want to throw in Fijian and Samoan and a variety of other Pasifika languages so we’ve got a really broad broadcast and a really appealing product to different demographics around New Zealand. 

Really for them it was where they saw the use case and so for us what it meant was we had to go back and rejig our entire infrastructure to be able to deal with being on a product like Māori Television.

Rather than dealing with a camcorder, suddenly we were on broadcast-level content coming out of the New Zealand High School Basketball champs, and we’ve got a certain level of service that we’ve got to provide, and so it was a really good opportunity for us to go and build a proper product and take the time to go and do a bit more research and development and really mature where the product was at.

A commercial facility for salvaging high-value metals such as gold, silver and palladium from electronic waste is being planned, after a partnership deal between two Kiwi companies. 

Mint Innovation and Remarkit Solutions have signed a deal to build the factory and expand the company across the country, and then internationally.

New Zealand Cleantech company Mint Innovation has developed the low-cost recovery process using specialised microorganisms which purify the metals from e-waste in what chief executive Will Barker says is an environmentally benign process.

"Our team, led by Dr Ollie Crush, has successfully extracted precious metals on a small scale and it is now time to take the technology further," Barker said.

"It's very exciting for us - we have developed a technology that we are very satisfied can be scaled and taken global and the first step for us is to build a New Zealand facility," Barker said.

"We're currently looking at Wellington and Auckland [for the facility], and Remarkit as a leading e-waste recycler is a key partner to enable us to have access to the waste that we need to process." 

Barker said the current process for most e-waste was for it to be broken into parts and sent to various areas of the world that could break it down into specific metals.

Over the past 3 years I have been fortunate to see five boards working in practice, one as member of the management team and the rest as an observer. Alongside that, every entrepreneur we invest in talks about their board: there is good, there is bad, and every one has some ugly.

"I’m unhappy with my board" - Every Founder, ever.

1. Boards, and their members, are put up on pedestals where success or failure is attributed directly to them. It is a flaw of our community to overvalue boards, neglecting teams, timing, markets, product and everything else that goes into a startup's success. This can lead to entrepreneurs, in their first board environment, underwhelmed that they aren't the superheroes they're made out to be... They're human, without infinite answers, connections or time.

2. Boards, by design, are a step removed from the day-to-day and, in part, are there to hold a CEO and her team to account. This means every CEO will spend as much time educating her board as she will receiving guidance, connections and value from them. It will feel repetitive and at times uncomfortably challenging, but it is not only worth it, it's vital. Why? It's hard to step back from within a business and see beyond the immediate challenges, and it's equally easy for "advisors" to have opinions without responsibility for their outcomes. Boards are in the unique position to balance these and provide unique value.

So they're neither superheroes nor a waste of time?

1. Do not treat board meetings as a CEO performance review: If a board acts as if they're only there to challenge and hold management to account, they're not aligned to creating value. If there is a genuine performance issue, that is important to address whenever it arises and most likely on a 1:1 basis between Chair & CEO. Waiting for a board meeting, the precious few hours you're all together to share expertise and address strategic issues, is irresponsible in both letting issues linger until its convenient and wasting the time of the board.

2. Compliance & governance are necessary evils: We all know horror stories about the high-flying startups that fail from lack of governance, control and risk-management. Sure, those stories are memorable, but what about the other startups that never take-off from fear and conservatism? I'd argue they vastly outnumber the former. I'm not a governance expert, nor do I hold the liabilities of a director, but I believe a board should view compliance and "good governance" as a necessary evil, but not the object or primary goal of the board.

Perhaps a better frame from which to approach each decision or action is: "Will this make the boat go faster?"

Contentious decisions and debate

Many assume that a high-functioning board is always high-functioning. But they're human, and I'm yet to see any board demonstrate such consistency. Most fluctuate from meeting to meeting, or topic to topic. It also isn't as simple as "having great board members" and the rest working itself out.

It seems obvious when stated, but opening conversations from this perspective aligns towards quick decisions, often at the expense of the best outcome. When discussion begins with a conclusion, board members can immediately, consciously or not, anchor to their position, work to justify it, and dismiss other perspectives.

Back to the original question: Who's on the board?

Founders, and investors, envision perfect a board member as someone who has founded a similar business, overcome challenges and achieved success in a similar market, with similar solutions, customers and pricing, against similar competitors and with similar funding. These features tell nothing of the person's culture, personality or approach to reasoning - only to the content of their experience.

In a startup, this means the role of a director extends to supporting the development, culture and well-being of your CEO and her team.

"If the company outgrows the founder, well that is probably the fault of the board." - Michael Carden

I'll add that founder/CEO burn-out, depression and other mental or physical health issues, are probably the fault of the board too. The role of a founder/CEO is lonely and almost impossible to empathise. It is beyond doubt in my eyes that a board should be their CEO's most ardent supporters and closest allies - investing their time and networks in ensuring her growth and well-being.

With all of this though, even the best board is only half of the picture.

 

Dear CEO's: You are responsible for getting the most from your board.

As a CEO, it is up to you to enable, equip and guide your board members to be successful, just like an employee. Board papers aren't a work report to announce "Look what I did". They're an opportunity to educate your board, to give them the information and tools to genuinely understand and assess the challenges you face, and then to give informed guidance and to create value in your business.

A CEO's responsibility extends beyond preparation to directing the meeting itself. In a startup, a CEO should not fall back on their chairperson to drive board meetings, because even the best lack the insight and information to define success in the fast-changing environment of a startup. Once a company matures beyond a "startup", its chairperson will own more of this role (and here's a great guide to that), but until then CEO's must define the metrics that matter, provide context to make relevant contributions, and focus discussion on your challenges.

Icehouse Ventures

IMeasureU, a division of the Academy Award-winning motion capture leader Vicon, today announces the release of IMU Step, a new piece of motion-sensing wearable tech designed to track the movements of professional and amateur athletes. Early units are already being used by both professional sports and collegiate programs alike, including the NBA, Pac-12 schools and Harvard University to help train and rehabilitate athletes across a wide variety of sports.

Consisting of two small, lightweight sensors that produce highly accurate movement data, IMU Step gives coaches and athletes the ability to precisely measure the movements and stress put on athletes’ bodies in any running-based sport. While IMU Step will soon be available to the public, IMeasureU has been working with professional and collegiate athletes for years. Harvard University recently used IMU sensors to study the impact of runners in the Boston Marathon, and Pac-12 schools the University of Oregon, Stanford, USC and the University of Colorado are also currently using the sensors to help understand the injuries commonly sustained by cross country runners.

“IMU sensors allow for the collection of biomechanics data in the wild,” said Harvard Medical School’s Dr. Irene Davis. “Devices like IMU Step allow the assessment of movement patterns on the court or in the field, and help to bridge the gap between laboratory research and applied sports science.”

Along with the Boston Marathon, Harvard is also preparing to use the sensors in an NBA/G co-funded study designed to measure bone stress injuries in collegiate and professional basketball players, and monitor changes as a result of fatigue. Thanks to the recent acquisition by Vicon, the world’s largest supplier of precision motion capture and tracking systems, IMeasureU hopes to offer its IMU Step technology to participants around the world in any sport.

IMU Step records movement data through two synchronized sensors placed above the ankle bone. The data is then interpreted through algorithms and software that precisely quantify the impact of each step an athlete takes. Unlike most single-sensor wearables that treat the body as a single unit of mass and only focus on distance, speed and heart rate, IMU Step precisely measures and classifies how hard each limb hits the ground to calculate asymmetries and workout intensity in order to offer an accumulative “bone load” score for each athlete’s training session. For running-based sports like basketball, where over 40-percent of injuries are sustained on the foot and ankle, these metrics can help coaches and trainers remove the guesswork from a player’s journey back from a lower limb injury, and dramatically reduce the risk of re-injury. 

The analysis of an athlete’s lower limbs and bone loading impact generated through IMU Step offers a first of its kind look at each athlete’s body and the impact of workouts on their musculoskeletal system. With enough data, IMU Step can create individual profiles for athletes, making it easier to produce personalized workouts and rest schedules. Even if the players themselves feel fine, constant metrics alert trainers and coaches to potential problems before they happen, ensuring that their athletes are at optimal strength for when it’s time to compete. The data can also help with recovery by enabling effective observations and strategic planning that personalizes the rehabilitation process and prevents future injuries.

“IMU Step brings about a new understanding of injury biomechanics as we move outside of the lab and obtain accurate measurements in the real world,” said Dr. Thor Besier, co-founder and chief scientist at IMeasureU. “Using the data collected with IMU Step, athletes, coaches, trainers and support staff can make informed decisions about how to get athletes healthy, and how to keep them that way.”

By: Rebecca Howard

Chief executive and founder Shaun Quincey says Genoapay is signing five new merchants a day and forecasts show the platform is on track to be available in more than 1,000 stores by the second quarter of 2018, enabling transactions for some 80,000 qualified users.

"I am delighted with our current growth trajectory, and we are learning every day how to grow faster and add more value to our merchants in the process," said Quincey.

The platform is bankrolled by Finance Now, a finance company owned by Southland Building Society, and uses Debitsuccess to manage its payment systems and credit services. Finance Now has a 10 percent stake in Genoapay.

“We’re delighted to have Promus as an early investor, and see Mike and his team as the ideal, strategic partners for Halter as we work to grow globally,” said Craig Piggott, CEO and founder of Halter.

This funding will enable us to scale our on-farm development ahead of providing commercial services in 2018. We’ve seen considerable demand from customers looking to run a pilot farm, and get ahead of the queue. We’re taking pre-orders and would encourage anyone interested to get in touch quickly.” 

Mike Collett of Promus will join Halter’s board of directors. Collett has existing investment interests in New Zealand after Promus invested in Rocket Lab’s Series D financing round. 

"At Promus we look to invest in tech companies run by visionary and tenacious founding teams,” said Collett. “Craig and his team are dedicated to revolutionising farming in a globally unprecedented way.”

“Halter is set to redefine an industry and truly modernise farming,” said Peter Beck, CEO of Rocket Lab, and an independent director of Halter. “I believe in kiwi companies that have big, billion-dollar potential - Halter is one of those companies.”

The Series A round of funding follows a seed round (2016) led by New Zealand angel network, Tuhua Ventures.

Halter will begin commercial roll out in 2018 and has plans to expand globally. 

About Promus Ventures

Promus Ventures is a venture capital firm based in Chicago investing in deep-technology software and hardware companies. The firm has invested in more than 60 private technology companies, including areas such as artificial intelligence, space, virtual reality/ alternative reality, machine learning, robotics, natural language processing, autonomous vehicles/connected car, bitcoin/blockchain, computer vision, digital health, fintech, insurance, and others. Promus Ventures focuses primarily on Seed and Series A rounds and has invested in such leading companies as AngelList, Kensho, Mapbox, Spire, Rocket Lab, Swift Navigation, Tulip Retail and others. More information can be found at www.promusventures.com.