A Good Start: New ventures can make ethics part of their business plan.

Examination of the best practices of these start-ups reveals several key steps new ventures can take to make ethics a distinguishing mark of the start-up's culture:

1. Ethical start-ups recognize the ethical dilemmas that surround them in the first few months
The pressures to cut ethical corners are great in a start-up.
How much puffery do you use in presenting your idea to venture capitalists? How do you divide stock ownership and options fairly among the founding team and later hires? How reliable does a product have to be before you ship it?

2. Ethical start-ups make ethics a core value of the enterprise
Start-up founders have discovered that they must explicitly embrace doing business ethically to counter the temptations to fudge various standards.

3. The ethical entrepreneur finds early opportunities to make his or her ethical commitment real
A Silicon Valley entrepreneur who took over a months-old company recently refused to send faulty financial data to the venture capitalists, over the objections of his new team. "You just don't do business that way," reflects the entrepreneur, who enjoys both financial success and a superb reputation today.

4. The ethical entrepreneur anticipates the ethical tensions in day-to-day decisions
As business plans are written and product capabilities are described, the ethical tension between the truthful and the "hopeful" is inevitable. The ethically thoughtful entrepreneur anticipates these tensions and talks about them with the team before the situations are confronted.

5. The ethical entrepreneur welcomes ethical questions and debates
Some situations cannot be anticipated, and the ethical entrepreneur must always keep an open door so that new ethical issues can be worked out.

6. The ethical entrepreneur is watchful about conflicts of interest
It is hard to single out one area of particular ethical concern in start-ups because there are so many of importance. However, the world of high-tech start-ups emphasizes partnerships, strategic alliances, and "virtual relationships." These arrangements are rife with opportunities for conflicts of interest where an entrepreneur or start-up employee can line his or her own pockets to the detriment of the organization. An early and consistent stand against questionable conflicts of interest is an important dimension of a start-up ethics effort.

7. The ethical entrepreneur talks about the ethical values all the time
The frantic pace of start-ups and their rapid growth create short memories and a staff that is often very new to the enterprise. Only by continually articulating the ethical commitment can the entrepreneur be sure the members of the organization particularly new hires understand the ethical commitment and know it is real.

TO BE CONTINUE