Month: February 2013

Well, the networking continues.  I had conversations with three people over the past few days that have firmed up my thoughts and clarified how I should proceed.  Below is a summary along with an assessment of where I’m at.  In retrospect these conclusions seem somewhat obvious—especially to anybody who has already been involved in startups.  However, I don’t know that I could have reached these conclusions with strong conviction without going through the process that I have.  In any event, the timing is good as this weekend I leave for a two week vacation which will give me a much-needed opportunity to step back, take a break, and re-examine things with a fresh perspective.

The three people with whom I met recently have all been involved in various startups roles including CEO, CTO, COO, VP Product, VP Business Development, and investor.  The topic which I explored most deeply in these conversations was how to go about achieving the goal I’ve established—to be a startup CEO.

There was a high degree of consistency amongst what I heard.  The common view was that I would have a hard time right now getting somebody to hire me as the CEO of an existing startup.  Without regards to what talents I may have the fact is that investors invariably seek somebody who has startup leadership experience when hiring a CEO.  The few exceptions are special cases where specialized knowledge in a particular market area is needed or the job involves a turn-around situation that may not be attractive to experienced startup CEOs.

This leaves me with two options.  The first, of course, is to start my own company and make myself the CEO.  The second option is to first find a position on a startup’s executive team and not be the CEO.  It doesn’t really matter whether this is an early- or late-stage startup as either would offer the learning experiences that I’m seeking.  This would seem to be the more prudent, methodical approach.  However, I have to admit I am intrigued by the notion of jumping right in and starting my own company right away so I am keeping both options open for the moment.  The key, in either case, is to find an idea/technology/position that I feel passionate about.

This leads me to the second topic—that of what technology/market area I want to work in.  As I have previously noted the field in which I have been working, semiconductors, is a pretty mature space without nearly as much investment occurring as with other technologies.  However, it is the space I know best and remain interested in.  Transitioning to other areas is certainly possible and something I am considering. 

I’m going to allow things to “settle” for the next two weeks while I am away.  However, I am thinking that the time has come to focus in on one or two specific technology areas, while keeping open the options of joining an existing startup or founding my own.  To be specific, below are my next steps open returning from vacation:

• Continue to participate in advisory/mentoring opportunities.
• Select two technology areas.  Upon researching a range of options I would focus in on two areas that offer good opportunities and also spark my interest.
• Within my selected areas start looking for startup positions in parallel with exploring the possibility of starting my own company.

That’s it for now.  We’ll see what a two week break does to my thinking…

As I wrote in my last post, I had several conversations last week that touched on the topic of the early-stage CEO.  These were with a number of people that collectively include experiences as founders, CTOs, and CEOs.  The subject that dominated these conversations was that of fundraising.  Previously, I had received conflicting inputs as to how much of a CEO’s time is consumed by this and to what degree is my corporate experience relevant.  These new inputs helped clarify the key factors that play into these questions.

On the topic of a CEO’s time allocation to fundraising I had received early inputs ranging from “all encompassing” to “not so much if things are going well”.  One of my conversations Friday addressed this by parsing out a CEO’s experience to before and after VC financing.  Prior to receiving venture capital a CEO’s time is largely consumed by fundraising as the startup is operating on limited funds and is racing to hit milestones and attract additional investment before these funds are consumed.  The survival of the company is at stake and nothing takes precedence over this.  After receiving venture capital the focus shifts more to execution as this now becomes the gating item to gaining market traction and additional investment.  Certainly, after receiving venture capital the CEO still is spending time with investors and is positioning for further investment but the sense I got was that this is at a lesser intensity than before the initial round of venture capital.

The second item I explored was the comparison between internal corporate and external startup fundraising.   I am seeking to understand how much of the experience I have in soliciting funds from senior managers within a large company is applicable to raising money from potential investors for a startup.  Taking the various inputs I received in composite I put together the following set of conclusions.  First, there is the simple dynamic of getting a meeting with the potential investor.  In a large company the path is usually clear and involves working up one’s chain-of command.  In a startup, before one can even make a pitch for funding there are the challenges of determining who to pitch and how to get their attention.  Second, there is the obvious difference in that with corporate fundraising one is usually dealing with a single potential “investor” while with a startup there are many.  This, by itself, implies a larger time commitment as multiple engagements with multiple entities need to be pursued to successfully obtain funding.  Third, with internal corporate fundraising there is a stronger focus on the execution plan as opposed to the factors startup investors focus on—opportunity, differentiation, positioning, business model, team, etc. 

Having said this, there nonetheless are different flavors of corporate fundraising with varying degrees of applicability to startups.  Seeking approval for next year’s budget for a mature, modestly-growing business is very different than seeking funding for a completely new corporate initiative.  As my experience lies primarily with the latter I do think much of it is transferable to startup fundraising.  There are certainly many rookie startup CEOs who have successfully raised millions of dollars without this experience so I feel comfortable that I can as well.  The real question is whether this is a role I want to have.  Do I want to be spending a large chunk of my time raising money than being more focused on strategy, execution, customers, team-building, etc.?  If yes, then an early-stage CEO role would be appropriate for me.  If no, then either an early-stage VP Marketing or a late-stage CEO might be better.  More food for thought…

Last week brought an assortment of activities.  I won’t go into these with as much depth as in some earlier posts as the week’s activities, with a few exceptions, were continued discussions and explorations of familiar themes. Having said that, however, a primary purpose of this blog is to document my experiences so below I list these activities with brief summaries.

The exceptions were the last three meetings shown below.  These particular conversations shared the common topic of what life is like as an early-stage CEO.  I will write about this topic in greater depth in my very next post.

• A technology development leader at an electronics startup.
  This person was referred to me by an engineer at this startup that used to work at Analog Devices.  He spoke at length about his career progression from a large company to a startup.  He also offered to introduce me to his company’s VP Business Development.
• MIT Enterprise Forum Start Smart Workshop.
  I attended the first session of this workshop.  There were about 25 students in total covering a very wide range of industries, technologies, and experience level.  I did not find this first introductory session to be very interesting but hopefully future sessions will be.
• Massachusetts Technology Transfer Center (MTCC) Platform Meeting.
  This was a meeting of an advisory panel for which I had volunteered. An energy storage company presented at this meeting and received feedback from the panel.  I was very impressed by the extraordinary depth of knowledge one of the panelists (an investor in this field) had in the company’s field.
• A former colleague.
  This person has been working as a consultant for two years and is now leaning towards returning to a large-company position.
• A recruiter.
  This call was initiated via a LinkedIn inquiry and was in regards to a leadership position at an out-of-state semiconductor startup.  This position is of interest to me and we’ll see how this progresses.
• An experienced technology executive.
  This person was referred to me by a former colleague and has held senior positions at both mature and startup companies.  We spoke about his transition to startups and a variety of other related topics.
• An experienced entrepreneur, investor, and coach.
  This person was referred to me by yet another former colleague.  He has worked at a variety of companies large and small including multiple startups.  He has held many different positions including Founder, CTO, VP Engineering, and VP Marketing.  Our conversation covered many topics but most significantly that of what being an early-stage CEO is all about. This person also offered to introduce me to a few existing executives/investors in the cleantech space.
• A late-stage startup CEO.
  This is a person with whom I had had some dealings with while at my previous position.  We spoke at length in regards to the CEO position and its challenges.

As I enter the second month of my explorations I expect that I’ll have many more weeks like this.  I am starting to touch on familiar topics repeatedly with different people.  Nonetheless, all these interactions are useful as they bring different opinions, perspectives, and experiences that are shaping my views and helping to clarify the direction I want to take.