Be a Good Startup CEO- Your Role
The good startup CEO role can be hard to define. Simply put, you’re job role is everything and anything. That’s where the startup CEO is at this moment…but you’re end goal is to move out of that managing phase, and into one of freedom; while still preserving your vision and the startup you built. There’s alot of emotional challenges and issues that come along with building a team, recruiting a startup ceo, or even being the founder and ceo. I’m not here to bore you with typical startup ceo role duties, but rather…what you’re real role is. And the challenges you’ll be experiencing. If you can read (or rather maintain attention long enough!) this is a really good article…filled with real life information.
The startup ceo role can be categorized into 3 clear roles. You should attempt to delegate anything that doesn’t fit into these 3 roles:
- Fundraising & Relationship Building
Startup CEO Role 1: Vision
When I became a startup ceo the first time, I never knew those visions I created in my head were what would define my companies. But they are…and they are so valuable. A startup without a passionate vision is worthless.
Leaders VS. Inventors (who are you?)
Leaders generally have visions, whether they are leaders yet or not. Inventors have ideas, and they may not always see the practicality in those ideas…or how it may even relate to others. Leaders are usually very aware of their surroundings and highly perceptive of others (intuition). While inventions are awesome, and they certainly contribute to the startup world, an inventor typically can’t fulfill the duty of a startup ceo (inventor: usually comes from a mathematical, science, or engineering background. Also very detail oriented).
Vision VS. Idea
All Entrepreneurs are defined by their ideas. And yes, ideas are a form of a vision. The core difference between a vision and idea, is ideas will come up a few times a day for most Entrepreneurs. A vision, on the other hand, is a repeated idea that the Entrepreneur or Founder usually has a deep belief in..and relates somehow to their past. This is so important because the vision is a “dream”, dreams fuel persistence, which creates success. An Entrepreneur will risk everything for a dream, but probably won’t risk much for an idea.
Since your job as a Founder, Entrepreneur, or Startup CEO is to eliminate risk…you can see how all this ties together.
Why The Vision Is Important
This is Ann Winblad’s mantra (famous Silicon Valley VC of Hummer Winblad): “You’ve got a vision, I got money”. That doesn’t say “you got an idea, I got money”. The vision is what makes the startup good. It’s what makes the startup “investable”. A vision can be protected, a vision can be monetized. But it’s 10x harder to monetize something that doesn’t have a vision behind it. Those are all things that will come with time as you make the vision a reality (ie: execute it).
Because of this, maintaining and preserving that vision is role #1 of a startup ceo:
- Break the vision down into milestones, either for yourself or your startup team.
- You have to clearly articulate the vision to others (this is easier said than done).
- Maintain the vision. The road will get tough, but don’t let it sway.
- Help others see the vision (this is where passion and purpose comes in).
Watch out for:
- Preserving your vision can come off as control.
- All founders, leaders, and startup ceo’s have emotional ties to their visions.
- This is a good thing, it’s what drives the persistence and pushes the startup to market.
- The stronger the bond, the harder the startup ceo will push.
- Lead with encouragement, excitement, and passion….instead of control. Watch yourself carefully.
- If you revert into a control mode, make it right as soon as possible.
Working The Vision With Other Entrepreneurs
Any other Entrepreneurs you bring on your team will also have emotional ties to your startup vision. It is no longer your vision at that point, it is “our vision”. That may upset you as the startup ceo or founder. But I look at it as you have two choices: either work with people who won’t take a risk & want a paycheck, or work with other Entrepreneurs. Get a bunch of Entrepreneurs emotionally invested into a startup, and see how fast it flies. But like you (because we’re all Entrepreneurs), we seek fairness and equal gain/struggles. Giving low equity stakes and outrageous milestones don’t work well with other Entrepreneurs. Entrepreneurs are value conscious. They’ll want to be equal.
Most Entrepreneurial Founders and Startup CEO’s are very protective parents, friends, and founders. They’re generally laid back until something violates the vision, core values, or hurts something close to them. It’s the same with their startups or businesses.
Synergy comes into play here: using other Entrepreneurs with opposite skill sets, that have the same values and vision. They won’t violate each other’s values (the main cause for strife among Entrepreneurs), because they’re the same. If you’re a startup ceo joining a founder (maybe taking on the role of co-founder and ceo), you have to work to understand the founder’s vision & core values…or else the startup will fail.
Startup CEO Role #2: The Team
I feel like I just touched quite a bit on the team in the above paragraphs (whoops). A common misunderstanding founders and startup ceo’s have is building the executive team. We automatically think the executive team is employees (salaried). So let’s not call it the executive team, let’s call it the startup team.
Have you ever heard one of the most important factors in determining investment is the startup team? It is.
Who is the startup team?
- The startup team (ie: executive team), is not paycheck oriented players.
- The startup team is Entrepreneurs, Visionaries, and Leaders.
- You’ll usually only start off with one: your co-founder, who will likely assume the role of a CEO, COO, CMO, or CFO.
- As time goes on, you’ll meet more Entrepreneurs to fill in these gaps.
- As time goes on, you’ll meet mentors. These may become your board advisors and/or strategic partners.
- As time goes on, you’ll meet investors. These will (more than likely) become your board directors (so choose carefully!).
What’s the Startup CEO role when building the startup team?
- Pick the right people, fill in your gaps.
- Motivating them to join you (again passion).
- Leading with compassion.
- Be humble. If you’re leading Entrepreneurs, they’re high energy. You’re a “calmness” for them.
- Be unselfish. People who are building your business, yes, they do realize they’re doing the bulk of the work.
- Understand your team, understand their personalities.
Bottom line, DO NOT ATTEMPT TO CONTROL OTHER ENTREPRENEURS. They will rebel, and you’ll have trouble on your hands. DO NOT RESTRICT FREEDOM. Basically, anything that makes you tick…makes other Entrepreneurs tick.
Startup CEO Role #3: Relationship Building & Fundraising
Ah, fundraising. It’s the worst part. Sometimes as a startup CEO role you won’t be fundraising, sometimes you will. I included relationships in here, because it goes hand in hand in the startup ceo role.
Fundraising can go alot farther in depth than just finding money. It’s about building relationships with other successful Entrepreneurs, founders, companies, investors, venture capital firms, etc. And fundraising money can come from many different places, and many different sources.
Fundraising may come from:
- Strategic Partners
- Angel Investors
- Private Equity
- Banks and Loans
- Venture Capital
In the form of:
- Partnership Investment
- Cash Investments or Cash Draws
Outsourcing the Small Deals to Entrepreneur Consultants
Your role as a startup CEO or founder, is to build these relationships and maintain them. But since most founders are anti social, if you’ve taken on the startup ceo role as well…this can be a challenge. Alot of founders are easily overwhelmed by all the new relationships, and the maintenance of them. This is where Entrepreneur consultants come into play. It can be alot less painful to build a good relationship with one trusted consultant that already has other relationships, then to build relationships with 100+ people (the average number of connections an Entrepreneur needs to launch a high growth startup). Also, relationships take time to build, and are usually built over a period of years. Ouch, if you’re an Entrepreneur with that natural urgency.
The small relationships can usually be outsourced to Entrepreneur Consultants, such as angel investments under $50K. But the right kind of Entrepreneur consultants aren’t just anyone. Only they know who their networks are, and if they can help you with their networks. It’s like sales. Sales professionals generally have established relationships and networks they can work with. If you, or your startup product/service, doesn’t work for their network, then the sales professional could push it…but he would risk his relationships. He’s got to make sure you’re good.
How to Pay Entrepreneur Consultants
The good ones know Entrepreneurs and Startup CEO’s are looking for money, so it doesn’t make sense to charge up front. Why would you ask someone to pay you, who’s looking for money? So most Entrepreneur consultants take fees on the back end, via equity or commission, or known as “finders fees”. This of course poses a risk, if you’re not good enough..or their network isn’t interested in your startup…then the Entrepreneur consultant is screwed out of
Beware of any Entrepreneur Consultants charging money upfont, or those that want to be paid to write a business plan first. That says to me they don’t believe in you, or yourstartup. Someone who doesn’t believe it, won’t put forth the effort it will take to get the job done.
How to Find Entrepreneur Consultants
Once you have gotten over the “idea hump” into the “I’m building my network, product, and lining up opportunities phase”, the Entrepreneur consultants will generally find you on their own. After all, that’s their job. Another good way to go about it is to connect with them on LinkedIn (undermanagement consulting). Just personalize the message a little bit so they know it wasn’t some random connection. Most screen their connections, so if they can help you they’ll say so. If they can’t, they’ll probably just ignore you…so continue your search.
Look for good ones that have taken startups to the top. They may have been a previous founder, or played a startup ceo role and are exited…leaving behind valuable relationships. Never get an entrepreneur consultant that has never started a business before. Their advice is not valuable, or worth your time.
Whew! That was a long article!
If nothing else, I hope you’re walking away from reading this with a much clearer sense of your startup ceo role and cleared up some questions you may have. Now go take on the world!