The Founder’s Dilemmas audiobook cover - Anticipating and Avoiding the Pitfalls that Can Sink a Start-Up

The Founder’s Dilemmas

Anticipating and Avoiding the Pitfalls that Can Sink a Start-Up

Noam Wasserman

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Entrepreneurship

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The Founder’s Dilemmas
Founder Motivations+
The Three Capitals+
Co-founder Dynamics+
Hiring Strategies+
Funding Decisions+

Quiz — Test Your Understanding

Question 1 of 8
According to the text, what is a key difference in the top motivations of female entrepreneurs compared to male entrepreneurs?
  • A. Female entrepreneurs prioritize financial gain over autonomy.
  • B. Female entrepreneurs include altruism in their top motivations, while financial gain drops off the list.
  • C. Female entrepreneurs are primarily motivated by affiliation and security.
  • D. Female entrepreneurs value prestige more than power and influence.
Question 2 of 8
Why did Curt Schilling's gaming start-up, 38 Studios, face potentially fatal problems?
  • A. He lacked the financial capital to fund the initial development.
  • B. He did not have the necessary technical coding skills.
  • C. He lacked human capital in the area of managing people in a business environment.
  • D. He spent too much time building social capital instead of a product.
Question 3 of 8
What is the risk of a potential founder lingering too long at a corporate job before starting a business?
  • A. They might accumulate too much financial capital and lose their drive.
  • B. They become too specialized in their knowledge, whereas founders need diverse skills.
  • C. They exhaust their social capital by overusing their professional network.
  • D. They become overly reliant on venture capital funding.
Question 4 of 8
How does the book suggest the title of CEO should ideally be decided among co-founders?
  • A. It should go to the person who originally came up with the idea.
  • B. It should be given to the co-founder who invests the most seed capital.
  • C. It should be delegated based on the co-founders' actual strategic and leadership skills.
  • D. It should be rotated annually to maintain equality among the founders.
Question 5 of 8
Why does the author advise against splitting company equity immediately at the start of a venture?
  • A. It is illegal to distribute equity before a company is officially incorporated.
  • B. Venture capitalists will not invest in companies with a 50/50 equity split.
  • C. Early distributions often fail to account for future changes in co-founders' commitment and contributions.
  • D. It prevents founders from hiring generalists for their early team.
Question 6 of 8
What is a proven advantage of hiring employees from a founder's personal network, according to the text?
  • A. It guarantees the start-up will not need venture capital funding.
  • B. It results in companies receiving valuations that are 37 percent higher.
  • C. It makes performance reviews and salary negotiations much easier.
  • D. It ensures that all employees possess specialized, corporate experience.
Question 7 of 8
Why are generalists generally preferred over specialists as early-stage start-up employees?
  • A. Generalists usually demand lower starting salaries than specialists.
  • B. Generalists bring extensive corporate bureaucracy experience to stabilize the start-up.
  • C. Generalists are more fluid and can adapt easily to the constant shifting of roles in a new business.
  • D. Generalists are more likely to attract top-tier venture capitalists.
Question 8 of 8
When might a founder choose to aggressively pursue venture capital instead of bootstrapping?
  • A. When they want to avoid board meetings and bureaucratic reporting.
  • B. When the market is highly competitive and they need to raise money quickly to enter first.
  • C. When they want to retain 100 percent equity and control of their company.
  • D. When they are building a highly specialized product that requires no marketing.

The Founder’s Dilemmas — Full Chapter Overview

The Founder’s Dilemmas Summary & Overview

The Founder’s Dilemmas (2013) reveals exactly what it takes to become the founder of a start-up company. Drawn from the author’s research and case studies, this step-by-step guide will help you navigate the rough waters of your company’s early stages.

Who Should Listen to The Founder’s Dilemmas?

  • Budding entrepreneurs ready to start a new business
  • Experienced business owners ready for a new challenge
  • Investors looking for advice on evaluating start-up companies

About the Author: Noam Wasserman

Noam Wasserman is a professor at Harvard Business School. He won the Academy of Management’s Innovation in Pedagogy award in 2010 for the course he taught based on The Founder’s Dilemmas. It was also named one of the top entrepreneurship courses in the country by Inc. Magazine in 2011.

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