NanoGene Technologies, Inc - Essay Example

The founding team members wanted Miller on board as she had experienced in the Life Sciences industry, after graduating from Harvard Business School in 1995.However, Ms. Miller was supposed to join the management team, not as a founding member of the company. In addition, the size of the founding team was considered to be big by the VC Stone. This view was expressed by other VCs also, who thought that apart from being the too large size the founding team had no member, who had any experience of commercialization, as none worked in a company, prior to this.

Founder’s decisions regarding the split of equity and compensation levelSince compensation, be it for the employee or any founding member, is directly related to the venture funding; Stone had concerns about the equity distribution pattern among the members and salary for CEO, apart from the size of the team being more than normal three. Tompkins discovered during his meeting with her that the compensation of $120000 was low for CEO, while the other members should be treated as senior scientists with a compensation figure of no more than $95000.

However, resolving this issue could not be an easy task, as Mark Masterson earned $90000, before the team founded the new company, while Tompkins earned $80000. Ravi Rhoota and Garfield earned $65000 and $55000 respectively. Considering the support of Report to the newly founded venture, an Angel investor agreed to arrange an investment of $60000, having a post-money evaluation of $2.5 million. Accordingly, the founders agreed on the financing pattern for their own investment. This schedule included immediate funding, equally distributed, to the tune of 20%, followed by the same percentage towards the end of the first year and balance investment of 60% to be covered at the rate of 2% per month.

However, prospective VCs had different views on the equity distribution pattern.Hiring Paige MillerMiller had a bright professional career after her graduation from HBS. However, during early 2002, she had quit her latest job and looked for new challenges, taking help from her VC network. While she had attended a few meetings in this direction with different prospective employers; her expectation was around $175000 salary plus 2.5 to 3% equity participation. She expressed these views firmly, during her meeting with Tompkins, in the direction of hiring her as VP for NanoGenes.

However, as other team members were surprised by the outcome of such discussion, the question of hiring an expensive VP, like Miller was debatable. They felt that hiring Miller, on a salary package, which is more their own, is not advisable at this stage. While NanoGene would require a book-keeper or an office manager, now, hiring Miller can be justified, later, when company operations really begin to take place. (Roberts & Cyr, 2003)