4 Lessons I Learned in My Journey From VC to Founding CEO

Someone can be an expert in the design and construction of pools, but that doesn’t make them a great swimmer.

This was the first lesson I learned when I made a major career switch from VC to CEO. After several years at Bay Area venture capital firms, I had decided to go the other way and become the cofounder and chief executive of a cyber security company.

I was on the deep end of entrepreneurship now, and it felt very different. I quickly realized that no matter how much I imagined the role of CEO as a VC, no matter how many company leaders I mentored, living it up is another matter.

To swim rather than sink, I knew I had to understand and appreciate the differences between the two gigs and hone my leadership skills accordingly.

It’s hard to know how often VCs go to the corner office because such data doesn’t exist. I think it’s quite unusual, though. It is more common for ex-CEOs to become VCs, a recent example being Bessemer Venture Partners. Announcement In May, Sameer Dholakia, former CEO of SendGrid, was joining the firm as a partner.

However, I suspect we may see more investors switching. competition The heat continues among VC firms, and at a time when the world in general is more willing to seek out new experiences.

In some ways, of course, the roles of VC and CEO are two sides of the same coin. Both types are driven by an innovative spirit and passion for building and nurturing companies that will change the world, or at least the markets. Venture capital gives an opportunity to work with really smart people, and vice versa.

But in other ways, as I learned, funding a company and setting up and running a company is profoundly different. Here are four examples from which anyone considering a transition can learn from.

VCs supply Rs, but buck stops at CEO

VCs are invaluable sources of funding and expertise, but CEOs take on ultimate responsibility for every aspect of a company’s operations, from development to communicating with board members to corporate reputation. What a deep responsibility.

In other words, VCs take advantage of them by finding great investment opportunities and helping those companies with mentoring, introductions to executive talent, and other value-added. But it is up to the CEO to execute the building of a successful brand in myriad ways. He should have ownership of every decision made.

It’s too big a hat to wear, and I had to wrap my head around it. I would suggest any other VCs moving into the CEO role with their eyes open to differences of opinion and mentally well prepared.

Strong CEOs Must Often Embrace Risk

Venture capital works on a portfolio model, i.e., VCs will invest in ten companies, hoping that one or two will return significant profits and the others will fall short. This naturally puts the VC in perpetual risk-calculation mode. To optimize portfolio growth, they must be equally rigorous in determining the potential downside of a startup to its upside.

A CEO, however, must be an eternal optimist, focused on creating growth with every available dollar of capital. The equation is far more weighted for opportunity than risk, as is the case with VCs. If they are prominent at risk, CEOs can end up with analysis paralysis, constantly overthinking and falling prey to the adage that “more gets lost in indecision than in wrong decisions.”

It’s just a different mindset, which took me a while to fully appreciate. So I decided to seize risk-based opportunities by aggressively devoting 10-15 percent of my company’s capital to risk that could change our trajectory. I believe this has helped our company to identify new market opportunities while simultaneously promoting our culture. This is because a culture that embraces risk empowers employees to take calculated risks without fear of punishment.

CEO job can be an emotional roller coaster

You wake up one morning and you marvel at the pace of business; You wake up the next convinced it’s in trouble. Startup CEOs are prone to the wildest emotional ups and downs. This is the nature of the game.

Of course, what this really means is the cutting-edge and risk-based approach at the heart of entrepreneurship I described in the second bullet: Company founders and leaders embark on this thrill ride. In fact, if the CEO isn’t experiencing these swings, something is wrong. They shouldn’t be taking enough risks!

VCs, of course, experience some of this dynamism as well, but not nearly as intensely as the CEOs on the front lines who put their full investment in the success of the company.

CEOs tend to go into weeds than VCs

Sales commission structure. Recruitment and retention. The best way to run a Leadership Team Meeting. These are just a few of the day-to-day items on a CEO’s plate that differ from the amount of time a VC typically takes. Whereas a VC cares about how a portfolio company is going to be run from a 50,000-foot view, the CEO is on the ground and doing it all.

For example, I already learned that I wanted to foster an ethos on my company’s leadership: that every approach has value. It is so easy in any organization to bias the CEO on any topic of color.

That “my way or the highway” attitude inhibits creative and bold thinking, though. That’s why I was careful from the start that the meetings flow in a way where everyone is encouraged to speak their mind on every matter. I never try to make decisions without authentically considering the point of view of others.

As these four points show, the move from VC to CEO is not as easy as it may seem. But my visit has been an amazing one, and I hope these remarks will help VCs and CEOs alike understand what affects each other.


Bipul Sinha CEO and co-founder of Zero Trust data protection company rubric, Earlier, he was A.P.Arter at Lightspeed Venture Partners, where he focused on the software, mobile and Internet sectors, and at Blumberg Capital, where he was a founding investor and board member of Nutanix and Hootsuite.

Author: Admin

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