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Tuesday, February 22, 2022

The 9 Types of CEOs That Are Really Hard for VCs to Work Well With


Q: What type of CEO is the most difficult for the Board to work with?

In rough order:

  • The “surprise springer”. Big surprises that could have been disclosed long ago, in a lower-drama format, pop up at a board meeting. Often repeatedly.  This instantly undermines confidence and buys the CEO no advantage at all in the end.
  • The “third check-er”. The CEO who struggles to raise money and asks his investors to write a third check into the company without a new, outside lead. VCs plan to write a second check, if they have to, to bridge the company. But they really, really don’t want to write a third check / second bridge.
  • The “we’ll make it all up in the last 2 weeks of the quarter-er”. Investors understand there will be rough patches. Claiming you can make up for a bad month, quarter or even year at the very end — unless you magically do — just undermines confidence.
  • The “miss every single plan-er”. A variant of the prior point. Not as bad, but still not great. Every plan is missed, all the time. Optimism is good, but delusion isn’t great.
  • The “seller/schmoozer-upper”. The CEO who spends more time schmoozing with the board, and less time supporting her/his team, at least at the board level.
  • The “thin-skinner”. I’m one myself, I guess, but the thin-skinned CEO is one no board really wants to work with. Board meetings shouldn’t be all critical feedback. But they tend to always have their fair share. You gotta expect it.
  • The “blame someone-elser”. Maybe this should be #1, but anyway, when the buck doesn’t stop there, that creates a lot of stress and concern.
  • The “never-hear-from-anyone-elser”. The CEO should set the stage, but each functional area (Sales, Marketing, Product) should be presented by the VP owning it, once there is one. Too much talking by the CEO doesn’t give the board any insights into what is really happening.
  • The “board meeting materials are always late and incomplete-er”. Subtle but undermines confidences and creates stress.

Be yourself, get the materials out 2–3 days early, have the team talk more and you talk less, be positive but frank, that’s all it really takes. Board meetings then can be pretty low drama, and become a great vehicle to align your team, and get them to be accountable to someone else besides you.

(note: an update of a SaaStr Classic answer)

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Jason Lemkin, Khareem Sudlow