This term is frequently applied to describe an ideal founder for a startup – or his successor. The implications of this term are very important.
A startup’s leader is typically its founder. That is both a social acknowledgement as well as a legal title. Sometimes there may be two or three founders, but that’s not as common.
The founder is the first employee of the company. That’s the person who is the sole owner of all the shares of the company. Soon fresh shares will be created and sold, diluting the percent owned by the founder, when cash is raised from investors and new talented employees are attracted by being given the right to purchase shares at low prices via options contracts.
The founder is the first legal officer – the President – of the corporation that becomes the startup. Some immediately take the title of CEO, chief executive officer.
The founder is typically expecting to be in that role for many years to come. However, that is seldom the result: history has shown that is not likely to happen. My log shows 9 in 10 founder CEOs are gone within three years. Even Steve Jobs got fired. Rare are the Mark Zuckerbergs.
Experienced venture investors look for “the marketable CEO.” That is the amazing person who can do the following year after year after year.
- Raise Capital
- Recruit Employees
- Sell to Customers
Raising capital is constant, occupying around twenty present of the time of the CEO. Find qualified angels and venture partners. Get introductions. Present and present until the cash is in the bank. Then go to the meetings of the company’s board of directors. There sit the investors’ representatives expecting the CEO to report on how things are going, what they can do to boost results for the startup. As cash is burned monthly, time approaches for replenishment and a new round of financing is planned and executed. The CEO does the heavy lifting, leading and presenting the company – constantly.
Recruiting is constant. The number one reason startups fail to meet their growth plans is they fail to attract enough of the talented people required. Thus, the recruiting skill of the CEO is high on the list of what experienced venture investors look for. Other managers and employees of the startup are going to help the recruiting, but especially during the early years, prospective employees will insist on talking to the CEO. Screening resumes, interviewing and discussing candidates with managers takes a lot of hours each day. Startup CEOs expect another twenty percent of their time taken to recruit people. The CEO should also expect to be required to privately talk to troubled employees, calming their emotions, getting people to return to productive work. And then there are those dark days when employees get fired. People management is a mandatory skill for a startup CEO.
Selling is constant. The entire company is focused on more sales every day. Urgency drives everyone. The CEO is central to making that happen. It occupies most of the rest of the hours every week. Yes, a lot of this work – creating the products, delivering them, marketing brands – are done by others, yet the CEO is expected to be up to the neck in customer intensive work, doing what it takes to deliver growth in sales.
That’s what a Marketable (founder) CEO is.
- Startup Managers Are Special
- Startup Managers Work in Turmoil.
- Startup Pivot Managers Have Guts
- Startup Recruiting and Organizing
- The Marketable Startup CEO
- The Floundering Startup Founder
- Startup Builders Focus on What’s Important
I wish you The Best on your adventure!