The Guide to Entrepreneurship

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Chapter 7

Organizational Structure

7.1 Introduction

This chapter focuses on the crucially important task of building a new ven-

ture team. The point emphasized is that a rm’s new venture team doesn’t

consist merely of its founders and its initial management and employees, but

of its board of directors (if it is incorporated), its board of advisors, its lend-

ers and investors (if applicable), plus all other professionals that compose the

stakeholders.

The founders must also be aware of the “liability of newness.” New ven-

tures historically have a high propensity to fail. The high failure rate of the

ventures is due primarily to three reasons