Do Not Cut Off Your ColleaguesStuart J. Ellman Oct 14, 2011 Back to blog
I have been thinking a lot about what to write on my blog. It has been a crazy year for me, and, as usual, I have not written much. I don’t feel the need to blog about everything that comes to mind as I tend to be more of a private person than an “out there” person. But, after 17 years in venture capital, I do have the pattern recognition that experience gives you. As we are truly having a startup renaissance in New York City, I am seeing younger and younger people drop out of school or start companies while still in school. They are making some rookie mistakes which are killing them in front of venture capitalists. I have come up with a list of 17 pieces of advice, one for every year I have been in the game. I am going to write 17 posts (maybe more) that I think everybody starting a company should know.
People that start companies have many traits in common, many of them positive for company formation but many of them negative for human interaction. In order to start a company from nothing but an idea and grow it, entrepreneurs need to be outspoken, controlling, driven, tireless, and they need to be convinced that their path is the right path to success. Think about Steve Jobs. He had visions for his products and would not let anything stand in his way to get them to market the way he wanted.
Now, lets enter a meeting with a 22 year old entrepreneur and his two co-founders. There is always one alpha-dog in the pack. The alpha dog is usually the CEO. The other two co-founders are the Chief Technology Officer and the Chief Marketing Officer. The CEO gives his pitch, then he introduces the CTO. While the CTO is speaking, the CEO may cut in because he doesn’t believe the CTO is explaining things cogently enough. Perhaps, as is the case sometimes, the CTO is introverted. Then, during questions and answers, a question about the marketing comes up. The CEO feels the need (actually cannot stop himself) from answering the question. Why? Because he feels he knows the answer better than anybody else. After all, this is his baby. He created the vision. It drives him crazy to hear a sub-optimal answer. But, THIS IS THE KISS OF DEATH.
A venture capitalist will just shut down. That kind of action in a meeting shows a lack of maturity, a lack of willingness to listen to others, impulse control issues, and just spells trouble. I went to see a company this week where I was warned, literally warned, that the product looks great but the management may be unfundable because the co-founder cannot stop cutting off his other founders. An entrepreneur gets one shot to make an impression on venture capitalists. That reputation will leave with him or her. Do not blow it with something stupid like this.