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Rising Star Monitor Deloitte - Vlerick
Providing insight into remuneration and founding team composition of young, high-potential Belgian ventures
The Rising Star Monitor provides a snapshot of the trends and challenges involved in young, high-potential ventures in Belgium. This study is the first to provide insights into questions such as how many founders Belgian scale-ups have, where co-founders are found, how founding teams split their equity and what equity stake they retain. The study also provides detailed information on founders’ cash remuneration.
The key insights of the study
- Growing by working together – most highpotential ventures are founded by teams, consisting of prior co-workers. Professional familiarity among co-founders ensures a more realistic and critical look at one another’s
strengths and weaknesses.
- Founders often adopt a “we’re in this together” mindset when it comes to structuring their founding teams. Practices such as assigning C-titles to all founders, having co-CEOs, taking strategic decisions in consensus and splitting the equity equally occur frequently. Yet, these practices may be dangerous as they may signal a reluctance to discuss and take difficult decisions among cofounders.
- Half of the teams include a dynamic aspect in their equity agreements, mostly in the form of founder buy-out terms, which is encouraging as it helps account for the uncertainty inherent to young ventures’ future. Vesting schedules, however, are seldom used.
- Founders’ remuneration package mainly consists of an annual base salary – variable pay is rare. Starting entrepreneurs need to be realistic though; around 40% of scale-up founders do not pay themselves any kind of cash remuneration in the founding year. Two years later this is still 23%.
The study confirms that a great idea is not sufficient to build a great company. The (founding) team is crucial for the success of the company. Hence, it is also very important to organise the team optimally. The study shows that prior co-workers seem to be a good start for professional success. However, the decision process should be flexible and pragmatic in order to ensure quick but solid decisions. This also accounts for how the equity agreements are agreed amongst founders in order to prevent dilution and / or blocking minorities. Finally, founders should be realistic about their salary expectations in the early days of their venture. Nikolaas Tahon, managing partner Deloitte Accountancy
About Entrepreneurship 2.0
The Rising Star Monitor is part of the Entrepreneurship 2.0 initiative. Entrepreneurship 2.0 was launched by Vlerick Business School in collaboration with Deloitte Belgium to develop state-of-the-art knowledge about the key issues young, high-potential ventures struggle with. It also runs knowledge and community-building programs for entrepreneurs who are in the midst of tackling important scaling challenges with their ventures.