Case Study: Front Square

TECHNOLOGY START-UP, Front Square Solutions, is finalising the allocation of 10 per cent of its share capital to employees.

Geoff Beggs, Sean Blanchfield and Brian McDonnell set up the company last year and it uses social media to provide lean operation training on a large scale to big, blue-chip organisations.

Beggs is an engineer by profession who developed a particular interest in business process improvement.

As a training consultant, he had carried out extensive in-company training programmes and was interested in developing an online training solution that would allow him to sell a product, rather than his time.

He had been using games and simulations widely in the classroom and last year was introduced to Blanchfield, an entrepreneur, and McDonnell, a software engineer, who were experts in online gaming.

Blanchfield was the co-founder of software development company, DemonWare, while McDonnell had considerable experience in building technical development teams.

“We saw there were strong synergies between our corporate social media experience and the world of operational excellence and identified an opportunity to revolutionise the way companies undertake lean transformations,” Beggs says.

“We believed there was an opportunity to bring the compelling aspects of the classroom experience online, eliminating the logistical nightmares of company-wide training and reaching more people than ever.”

Initially, two of the companys software developers will benefit from the equity-sharing scheme, while part of the allocation is being retained as a possible incentive for a key hire (probably in sales) at some point in the future.

“Were doing it because they are good people and we would like to keep them,” Beggs says.

“It has taken around three months to put the process in place as there is a lot of to-ing and fro-ing while you’re deciding what best suits your business.

“There are no set rules. It’s really up to you to decide what you want to do. We got good practical advice from someone who had already gone this route.

“In any start-up, there is a lot going on. Youre trying to deal with product development, marketing, sales, finance, and legal issues. So be mindful before you start that adding something like this into the mix is another item to juggle.

“There are issues around tax and you may need legal and financial advisers to help, which can be expensive. But in my experience there are tax and legal people out there who will come to an agreement on fees with start-ups.

“To anyone thinking about this, my advice is to do it in the interests of building your company not because you don’t have the money to pay staff. Its not something to rush into either. Hold off until you are sure its right.”