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Concept Stage:
The CEO: So now what
do you do?
By
Gerald Youngblood and David Mackie
Managing Partners, seedstage.com |
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The chief executive
officer is in charge of the company, accountable to the shareholders and responsible
for running the company for their benefit - not for the benefit of the employees
or the founders. This is the most critical player on your team and is not necessarily
a founder of the company.
Why
It's Important
Getting the right CEO
is becoming more important and increasingly difficult, as the number of companies
starting and growing now is exceeding the number of people with good experience.
Eventually, it may be that okay ideas with great teams get funded before great ideas
without great teams.
How It
Works
Growing a company is not
a trivial matter and having someone who's done it before is very important. This
means you may need a different CEO at different stages in the company's development.
Founders often find it difficult to hand over control of their companies, but there
is absolutely no substitute for the right CEO. You're going to have to give up some
control and some stock, but look at it this way: the size of the pie is more important
than the size of your slice. It's better to have 1% of a large successful company
than to have 100% of a small struggling company. If you're faced with giving up 20%
at the seed stage of your company to attract someone who can double the stock price,
don't hesitate for a nanosecond. |
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- Find a CEO who appeals
to investors - they see this as the person to whom they're going to trust their money.
- Find a CEO who can
serve as the leader for the corporate culture.
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| DON'T: |
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- Pass up an opportunity
for the right CEO, even when it means giving up control and giving away more of the
stock than you might like.
- Forget that the CEO
is responsible if the company does something wrong.
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