Context Rules is a navigation system for entrepreneurs that provides a methodology proven over 30 years that guides What to do, Why and When, by Whom, How well and then How.
We have identified 21 core competencies necessary for building successful companies. We call this the Task Physics - the What to Do.
Context Rules differ from other methodologies and advisory services in the importance we place on understanding, supporting, and growing the people - we call this the Human Physics.
~Context Rules Mantra
Context rules increases efficiency and reduces failure-risk by calculating and then directing WHO is the best suited to take on specific tasks.
The best person to take on the task.
Our journey begins with your financial end goal. Our proprietary Equity Modeling Tool allocates equity based on your goals, the skills needed, and the expected work required. It is a trust building exercise that aligns all of us for success.
Context Rules includes an equity modeling tool in its navigation system. The system is unique in that it starts with the end in mind and provides an equity structure that incorporates the founders goals, anticipates resources needed, and shows a path to the founder to meet his/her vision for the company.
Your Personal Goals establish the destination.
Your Financial Goals at Exit, using different possible outcomes, establishes the promise of the business.
Then, based on the competencies of the team and the needs of the business, you decide the people you need to bring on the journey. with you.
There are several inputs that create inputs into this equity model:
Gets at what the founder really wants to do, how much time they are willing to devote, why, and ultimately, their goals for the business.
If you are successful based on the effort you are putting in, what is the dollar amount you’d like to receive if you’re bought for cash.
This tool illuminates the skills the founding team has and doesn’t have that is needed to complete the journey. This is an important input source for Part 3, Initial Founders Shares.
From there is a process to validate these inputs with detailed bottom-up financial plans supported by key action steps. There are Three parts to this equity model that founder(s) optimize to structure their company:
The exit value is the anchor for the model; it establishes everything and because it’s the key driver of the founders’ "number." It’s important to us because we believe in your journey and want you to fulfill and breathe life into your dreams.
We believe you should raise as little as possible. In the early stages of a business, risk is higher and what you give up is higher. We can help you and be efficient by mapping milestones and complimenting the resources needed to complete your success at each stage.
As others are investing their time and talent, this thoughtful approach of sharing creates certainty that you will need for others to be motivated to help you along the journey.
Early stage companies exist in an ecosystem that is consistent with the General Systems Theory of organic systems. GST proposes that complex systems share basic organizing principles irrespective of their purposes, and that these principles lead to explanations and predictions of both system limits and opportunities for optimal functioning.
Early stage companies are susceptible to existential threats and permeable boundaries
Growth oriented organic systems move toward complexity and differentiation
Organic systems have feedback loops and are constantly adjusting to internal feedback and external inputs
There are limitations on the system with hard boundaries
Organic systems must maintain homeostasis and adapt to survive
With growth come new stages with new challenges; system tasks and people adapt, and the system learns over time
A founder's personality and behavior has an outsized influence on the system, as do certain key leaders. Also, systems develop procedures and processes that become structured and reified in the service of efficiency and predictability. These human and task “physics” impose limitations on the organic dynamism of the system.
Windows of opportunity open, stay open, and close; some decisions need to be made with urgency, some are better delayed
Our methodology and operational principles make starting a business more predictable and efficient
Founders have a higher likelihood of hitting exit goals
The founding team understands what they have and don't have and what will be needed for the journey, allowing for predictable planning
We can improve success rate + enjoyment along the journey
Investors are drawn to companies who use context rules as it de-risks their investment
Founders combine personal goals with a fundraising approach that helps them achieve their goals and reduced dilution
Founders see bumps in the road before they happen
Most other models and resources focus on doing the ‘what’ and ‘how.’ These models don’t provide a methodology that addresses the dynamic and situational (context) nature of real life. We provide a way to analyze key decisions and opportunities, continually moving foward
Applying Context Rules effectively results in doing what matters most by, “always knowing what to do, when, and why, and by whom, and how well, and then how.”