Many (most?) founding CEOs don’t survive their VCs. As Galen Moore states in his Mass High Tech piece, “Venture capital investors are notorious for investing in a startup, then replacing its founder with a more-seasoned CEO from their network.” Galen highlights four founding CEOs that have survived, though the article is a bit light on specifics as to how each achieved their success.
Here’s one way: In the last decade, I’ve seen first-hand a number of companies where a founding, first-time CEO heads the VCs off at the pass by bringing in a seasoned COO, on an interim basis, to help them through a rough patch.
It’s true that half of my ten interim assignments have been as CEO, where the VCs wanted to replace a founding CEO. In each case I was asked to take over from a fired founding CEO and “right the ship” before an executive search for an industry-specific CEO could be undertaken.
But the other five interim assignments have been as COO, where the founding CEO themselves decided to head their VCs off at the pass by calling me in to help for a short period of time.
How’s this done? Because each company is unique — with it’s own set of problems, strengths, and market constraints — each company requires a unique set of actions. But in an earlier post, I did describe a consistent process for the first week; a process that helps determine the real problems and possible solutions.
As Steve Hafner notes in Galen’s article, founding CEOs often find the “firing” process difficult, so that’s often one of the first actions I take. But my strangest first action was at a $20+ million, unprofitable software company; the first thing I did was clean the company kitchen! Here’s why this very odd “first action” may have been my most effective.
Oh yes…as in other interim COO assignments, in this case the founding CEO did survive!