Hi! Steve [Anderson] is trying to bring me into the new age of digital media, by having me write a blog rather than an article--or put another way, I offered to write another article about funding early stage companies, and Steve talked me into writing a series of sound bites, instead. The idea is to put something up every two weeks, and encourage an interactive forum where budding entrepreneurs can pose questions or topics, and I will try to answer them in the course of the blog. I’m a serial entrepreneur, morphing into a venture capitalist (VC), so hopefully before the disease takes full control of my system I will have enough humanity and humility left to be useful to fellow entrepreneurs in their quest for funding the next great idea.
I came to the
My first topic is "First time CEOs."
So you are a young engineer with a great idea, in my case my boss wouldn’t listen and at one point actually told me he’d come after me if I tried to start any company--it was a very East Coast approach … anyway, you hopefully want to start a company because you are passionate about supplying a need that isn’t well served (or you want to be rich(er), in which case your probability of success is actually lower, but more on that later).
You go in for your First Pitch, and the VC doesn’t want to hear about your idea, he or she first wants to hear about you: who are you? what have you done? what qualifies you to be successful in your dream? He isn’t being antagonistic, he really wants to believe in you and fall in love with your idea as you have. So VCs tend to fall into two camps. The one you are worried about is the one who believes they need to recruit a really good CEO and management team for your company and that you will be a founding original contributor. So first, take heart, this is a really good sign--they like your idea and want to build a company. It actually doesn’t matter whether you are the CEO or not, but that’s a separate issue. If being CEO is important to you, there is another class of VC, generally newer, who believe in first-time CEOs.
Here’s why: first-time CEOs are hungry, they are not spoiled by success, and, as Darwin Smith said they “just want to qualify for the job” so they are great to work with and imminently coachable which VCs like (
Don’t get married to the idea of being the boss, but don’t assume that lack of CEO experience will disqualify you either. I don’t need to point out Michael Dell, Bill Gates, Andy Grove--but how about Kevin Kalkhoven, or Phil Merrick. Okay, so they are fellow Aussies, but talk about a great debut as a CEO--and in Phil’s case all the way from startup through IPO and beyond. Often a company could go through three CEOs to achieve this (Phil also opened Nasdaq on the all time high and jokes that he pressed the wrong button …).
But don’t be married to being the CEO. Almost certainly you will want or need to replace yourself as your company grows. But don’t write it off either. Talk to your VCs. If its important to you, chances are they will give you a shot. Be careful what you wish for however, as they will do everything they can to find the diamond in the rough, but if you are pretty rough to start with (as I was) they will grind away pretty hard to polish you, and it can hurt.
Next time – “Do you want to be rich or king?”