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Should Founders be CEOs?

A Thought Leader Guest Post from Dr. Fred Haney, Author of The Fundable Startup:

The Fundable CEO Should Founders be CEOs

Many company founders want to be the CEO of their firm, but is that the best approach?

Most successful CEOs work for 15-20 years to acquire much-needed expertise. A study of 2.7 million startup companies tells us that the average age of the successful startup CEO is 45. Venture capital investors have many opportunities to invest in companies with proven management teams. Startup founders need to consider all these factors when deciding who will make the best CEO for their company.

Who is the most fundable CEO of a startup company?

James Kwak, in an article in The Atlantic, wrote that Steve Jobs’s Law says, “Founders make the best leaders.” 

Well that’s easy for Steve Jobs to say and for him it was true at least his second time around at Apple. And there have been other notable successful founders like Bill Gates and Mark Zuckerberg. But is “Steve Jobs’s Law” true in general?

In my experience as a venture capitalist, about half of the founding CEOs I observed were eventually replaced by more experienced executives because they simply were not meeting their objectives.

Steve Jobs’s Law states that an inexperienced founder can do a better job of running a startup company than an experienced CEO. Does this really make sense? Who will be the most fundable CEO for a startup company? Let’s address this question from four different points of view. 

  • Logically speaking, what does it take to be the CEO of a startup company?
  • What career path do successful CEOs follow?
  • What do statistics tell us about the age of successful CEOs?
  • What kind of CEO do venture capital investors look for?

“Talent is the No. 1 priority for a CEO. You think it’s about vision and strategy, but you have to get the right people first.” Andrean Jung, Grameen America

What Does a CEO Do?

If you look at the long list of skills that a CEO must have and the amount of time it takes to acquire them, it’s hard to see any logic to support the premise. Of Steve Jobs’s Law. Do passion and perseverance really make up for a lack of sound experience?

My book, The Fundable Startup: How Disruptive Companies Attract Capital, lists 13 very broad skills that a successful CEO must possess. These skills require extensive experience to develop. For example, it can take years to become adept at long range planning or corporate planning. And it can take many years to develop the skills required to manage other managers or understand financial statements.

One very critical skill that more experienced managers have is financial forecasting. This is an area where many first-time CEOs fail. Being a good forecaster requires that ...

Read the rest of this article at…


About the Author

Thanks for this Guest Post to Dr. Fred Haney, the Founder and President of the Venture Management Company, a firm that provides assistance to high tech companies. He is the author of The Fundable Startup: How Disruptive Companies Attract Capital, published by Select Books of New York.

Download the first chapter free here. 


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