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Episode Info: If you’re a business owner and you’re serious about scaling your business, don’t give away equity too easily. A Chief Technology Officer (CTO) who is going to turn your vision into your strategy needs to understand you, your business and where you want to go. For more on what to look for in a CTO, head over to last week’s blog post. The key thing to remember is your CTO must share your vision and be able to put it into action. You are serious about growth, scaling up and want to take your business to the next level, but how? Equity and CTO’s often come hand in hand but it isn’t always the best path to take. Avoiding equity can often see your business thrive and scale faster because you are not locked in with your CTO. Here are 10 reasons why I think you should avoid equity when hiring your CTO Giving equity to a CTO is agreeing to a business marriage If you offer equity and combine it with your vision, you’re getting married to your CTO! It’s important to remember this. Offering equity is a bit like getting married - is your CTO someone you want to get married to? Think about how you spend time with that person before you commit to an equity stake and start a business marriage. Work out a way to date your CTO first, before you give any equity away! Your strategy needs to evolve to scale A clear strategic plan on what technology you need is essential, as so is selecting the best person to action this. Work out how your CTO can scale with your plan. If your needs change as the business grows, can the person that you initially thought would grow with you do so? They may not have the understanding to take your business forward. If you are tied into an equity stake this can be problematic. Falling into the ‘title’ trap If you have a technical co-founder, a significant equity stake is common because they’re trying to develop your business and they already understand the technology behind it. Ask yourself if they are a true CTO or if they hold that title for ease. A co-founder can be in love with your dream, whilst a CTO is unbiased. Differentiation of roles is key to success and growth. Is your CTO scalable? Think about thRead more »

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