Please see the blog written November 11, 2009 in the online version of The Wall Street Journal entitled “Start-Up CEOs Gripe About VCs’ Lack Of Operating Experience” (http://blogs.wsj.com/venturecapital/2009/11/11/start-up-ceos-gripe-about-vcs-lack-of-operating-experience/tab/print/ ).
The main point of the article is based on a survey of start–up CEO’s that points to a lack of real world entrepreneurial and operational experience at the board level. Cava was founded on this very premise. Having been a veteran of five previous start-up experiences, I can tell you first hand that the lack of operational talent in the board room is frightening, especially in early stage companies. That is not to say there aren’t smart people in the room or those wanting and willing to help. The problem is if you haven’t woken up at 3am in the morning worried about making payroll that day, or how to get the marketing plan done to drive traffic growth, you cant possibly be all that useful. Being strategic is fine, but what early stage companies typically need most is tactical help. Be there to help scrub the pipeline. Be able to help create an HR plan that makes use of limited resources. Know what suppliers might be consolidated, negotiated with or added. Open a few doors at prospective clients that could change the game on the quarterly plan. These are all real issues and ones that you must have dealt with regularly to add value. If you make your entrepreneurs successful, you will be successful. Influence where you can. Be willing to be operational, even if it means sitting on fewer boards and getting more tactical with each.
Jim Caparro, a member of the Cava Network, puts it this way:
There is an artful balancing act between an entrepreneur executing on his vision and building a successful business, and the interests and motivations of a funding sponsor. Having experienced it firsthand, I totally appreciate the challenge.
These inherent conflicts need not be overwhelming to either side. It’s all about aligning interests and expectations within realistic timelines for both sides. Then the “art” is managing the process and relationship in a way that the environment created seems supportive and encouraging, yet demanding of results. Build a strong and progressive culture that motivates leaders. Many say it, few execute it.
Good luck investing out there. The opportunities are exciting, lets make them successful.