Preparing yourself for the progression from founder to CEO
We had the pleasure of interviewing Maxine Minter, General Partner (GP) at Co Ventures and Co-host of podcast, First Cheque, for the Startup Board Course. Maxine invests exclusively at the pre-seed stage, and having a background as a lawyer, executive coach, founder, and investor, Maxine’s experience offers multi-faceted insights for founders on the startup journey.
Here we share some brief excerpts specifically on the founder to CEO progression from our broader interview with Maxine where we discussed when founders should start thinking about setting up a board, lessons learned and gotcha moments along the way, what good can look like, and how you can do due diligence on potential investors ahead of making that long-term commitment.
You can find the full interview in the Startup Board Course portal, with our next cohort kicking off on 14 August 2024 - apply here.
Excerpts from our interview with Maxine Minter, in conversation with our Startup Board Course Director, Ashleigh Camm.
Tell us a little about yourself:
I’m the Co-founder and solo GP of Co Ventures, one of Australia's first pre-seed-only funds. We focus on companies that are growing internationally from day one.
I started building Co Ventures because I live half between Australia and half between the US, and have lived in the US for about seven years. I moved to the US to go to college, and at that time, I started what was maybe my fifth company, but it was my first venture-backed company. My entire experience in the venture-backed ecosystem of operating businesses and building businesses has been in the US, or was up until I started the fund. I also became an angel investor here, as an operator angel, which is normalised in the Bay Area, but a relatively new thing in the Australian ecosystem.
Prior to that, I was a lawyer in Australia for about ten years, five of them as a qualified lawyer and five as a paralegal. I built a bunch of companies while I was at university, and ran a bunch of companies as side hustles while I was operating as a lawyer. With this experience, I also worked as an executive coach for startup founders before setting up Co Ventures.
When thinking about startup boards, I wear three different hats to share my experience on this topic: as a pre-seed investor, as a founder and operator, and as an executive coach. Having operated across all three means that I really love a well-operating board. I’ve seen how valuable it is when it works well and how painful it can be when it doesn't. I’m excited to dive into this topic!
Defining the founder to CEO progression in early-stage startups, and how this relates to the company’s board:
Excerpt: ‘... I don't know how many folks will be doing the Startup Board Course who are pre-seed operators, but I think for context, my opinion is you should have a board, a formal structured board with third parties in that room as late as humanly possible. The reason I think that is true is at that pre-seed stage, and even in the seed stage, you are focused on existential risks. You actually haven't earned the right yet to start building the company around the product-market fit, and part of that company building is, in my opinion, the building of a high-performing board. To make that progression, you are a founder first and you have to earn the right to progress to being a CEO.
Now there is a reality that you will have to incorporate to raise capital, which means you do actually already have a board when you do this, as in it physically already exists, so it's just about running that on the bare bones to meet the requirements that you have to comply with. In the same way that you can't not file taxes, and it isn’t advisable that you never do your accounts, there are base requirements that you need to meet from a legal perspective, and there are ways to fulfill those with minimal overhead…’.
How founders should think about running their company before finding product-market fit:
Excerpt: ‘… My suggestion is, at the very earliest stage, to do the bare minimum on legal, accounting, and taxes until you have found a product-market fit that’s sufficient to start to build out these capabilities around the requirements of running the company…
As a founder in the progression to CEO, you need to understand the requirements of running the company and have the capability to fulfill these requirements, ideally by the time you have product-market fit or Series A.
The reality of human skill development is that you can't download a skill set (yet). If you leave it until product-market fit or Series A to start learning how to do this part of your CEO role, you’ll find you’re setting yourself up for a very hard learning curve at a time when you have many competing priorities…’
How founders can think about developing their CEO capabilities to run the company efficiently as they progress toward product-market fit:
Excerpt: ‘... Unless you have come from a context that has allowed you to practice the skills you need to manage a company, you will need to build these skills early on. That includes familiarising yourself and gaining sufficient knowledge about governance and legals to manage the board and your investors, as well as knowing your financials and the compliance needs of your business to meet the requirements of your jurisdiction. You need these core skill sets as a founder and CEO of a company, and when you're a director.
As the founder CEO, you will constantly have to go through this journey of knowing enough on a topic to be strategic and knowing when you need to bring in third parties to give you leverage versus what you can do sufficiently yourself. Knowing enough on board governance, legal structures, contract law, and fundraising dynamics, for example, is all par for the course. As you get larger, there will come a point when you need to be more of an expert in these aspects, but by the time you need to be, you probably should have enough cash flow to be able to pay someone to educate you and/or for the company to employ experts to support you.
Building your way up to this level of knowledge and understanding is really important, so even at the earliest stage, it's worthwhile learning enough about the fundamentals of companies and how you need to navigate them from a legal and strategic perspective.
At the point that you successfully make the transition from founder to CEO, your job as the CEO is to maximise shareholder value, and/or stakeholder value, depending on how you draw that circle. You've taken on a really big job, and it's complex, sometimes scary, and mostly really fun and exciting. As the CEO, running your company and board effectively can be one of your most impactful levers for success…’.
Whether you’re a founder or in the management team of a startup, if you would like support to understand what you need to know when it comes to running your company and the obligations of being a CEO and director, we talk about all of this and more in our Startup Board Course - find out more here.
Ends.
