By David Frankel, Managing Partner
Working with a board of directors is one of the key challenges facing founders. While tech has an egalitarian mien, there are material power imbalances and they can cause tremendous stress for founders. Some thoughts on how to manage those concerns:
👏 Your investors want you to succeed
There’s a belief that VCs are keen to replace founders at the first misstep. Nothing could be further from the truth. The reality is that you are more likely to be replaced if your startup *succeeds* than if it struggles.
At the early stage, investors know that firing a CEO is likely to kill the company. Practically speaking, it’s also very hard to find talented outside CEOs who are keen to take over an unprofitable business with an uncertain future.
The thing to fear more at the early stage is that those of your investors who are expected to invest at each stage will choose not to invest *at all* in the next stage. This signal is damaging and potentially fatal. Fear this way more than a pink slip.
🏆 Your VCs expect you to level up
Part of being a CEO is getting comfortable on the expectations treadmill. You have signed up to be a peer to Mary Barra, Jeff Bezos, and Sundar Pichai If you want to compete, you must scale the learning curve. Rapidly.
You are going to make mistakes. Your investors know this and expect it. The important thing is not to make the same mistakes repeatedly, and critically, to recognize and fix those mistakes. Your reaction to a mistake is often viewed more critically than the mistake itself.
Fair or not, you are going to be compared to the highest performing CEO in each VC’s portfolio. That’s a lot of pressure. Take heart, every great CEO you now look up to was once in your shoes. It is doable.
🤬 Don’t overreact to criticism
You’ll likely get a lot of feedback from your VCs, and at times, it will feel harsh. Your investor may get frustrated with you. This can be worrying, but it’s also (sometimes confusingly) a sign that they care and believe in you.
It’s not a perfect analogy at all, but the relationship between a startup CEO and VC is like that of Olympic-class athletes and their coaches. It’s punishing, it may even feel adversarial at moments, but it’s ideally in the name of pursuing excellence together.
Most founders were high-performers in previous roles and unaccustomed to the incredibly high expectations of being a CEO. Learning to be a CEO is a job unto itself. I’ve gathered some tips on how to build the necessary skills in this post:
📈 How to scale as a startup CEO, from seed to series A (and beyond) 📈
A startup founder can become a world-class executive of a big company, but it doesn’t happen just because you convince…
There is no other space, in my experience, where career acceleration happens as quickly as in startups. In closing, when choosing a VC, make an effort to find partners who have a demonstrated track record of helping CEOs develop and fulfill their potential.