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Build a great team
Venture capital syndicates typically take a controlling stake in your business in exchange for funding. If you don't perform according to their expectations, the VCs can - and will - fire you. So it's crucial to surround yourself with talented associates who fill the gaps in your own expertise.

"VCs won't change the CEO if a company performs well," says Spencer Tall, managing director at Santa Monica-based Allegis Capital. "The way to avoid getting sacked is to hire smart people."

"The single most important thing I do is recruiting," agrees Mark Watkins, CEO of the Boston-based search startup Goby. Both he and his partner Mike Stonebreaker, an MIT professor who has founded other VC-backed companies, including Ingres, Illustra, StreamBase and Vertica, boast deep technical and operational expertise. But Watkins rounded out the management team with business development and technical leaders as well as product designers and developers. And besides hiring niche experts, Watkins recommends seeking out employees who are comfortable working in the rewarding but risky world of early-stage entrepreneurship.

NEXT: Think big

LAST UPDATE: Apr 21 2009 | 10:57 AM ET
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