Spinning out: Invest in bigger and experienced team

Spinning out? What you are able to take with you to your new company will determine how well you do. When it comes to leaving a company to start your own, whether you sink or swim could depend on how many good people you can bring with you. According to a research by Rotman School of Management's professor April Franco, it's a founder's ability to attract a large and experienced team of colleagues that will determine success of a spin-out company.

Spin-outs are start-ups created by employees who leave one company to form another in the same industry. Quite often it's the charismatic founder who is given disproportionate attention when a company "spins-out." In fact, existing research looks at the "founder effect" and the value of a team as separate factors when considering spin-out performance. But the two, Franco says, are closely related.
 
"A founder's individual characteristics are important but what's more important is that person's ability to bring a bigger and more experienced team with them," she says. "And the bigger that team the more likely the firm will succeed."