3 Things a CEO Should Never Delegate
Entrepreneur Dan Shapiro is a three-time CEO who has raised more than $30 million in venture capital. In 2011, Google bought one of his startups, Sparkbuy. Since then, he's worked at Google. He's writing about these experiences in a forthcoming book called Startup CEO Secrets.
How does any of that help you today? In advance of the book's release, Shapiro has organized his experiences into some valuable lessons for today's entrepreneurs. He presented some of these lessons in a fascinating 20-minute talk at the recent Dent the Future conference, which took place at the Sun Valley Resort in Idaho last month.
Shapiro's talk was called The Six Things You Can't Delegate, and the "you" he's talking about is the founder/CEO. Here are three of his six things:
1. Fundraising. "Shouldn't you be able to hire someone who's done it before?" Shapiro asks the crowd rhetorically. "You can," he answers. "But you'll call her CEO."
His point is that your investors will always want a direct line to the CEO. From the movies or from HBO programming, you may have visions in your head of restless founder/CEOs who get bored at investor meetings, and who just wish they could be out coding or creating instead of sitting at a table making deals.
Shapiro's message, in a nutshell, is that you cannot be that person. You must be fully engaged in the financing. "The investors want to see you make a deal," he says. "They know it's how you're going to treat your other negotiations."
You might be thinking: How can I be the one who makes a deal and does all the talking when I know nothing about financing?
Not to fear. Shapiro recommends a book called Venture Deals: Be Smarter Than Your Lawyer and Your Venture Capitalist by Brad Feld and Jason Mendelson. "This book is the bible," he says, extolling the way it will help you grasp all the essential financing concepts that you need to master as a CEO/founder.
2. Investor relations. How is this different from fundraising? Think of it this way. Fundraising is the actual act of raising money and cashing the checks. Investor relations are all of the conversations you'll have with your investors (some of whom will become board members) afterwards, explaining to them how you're spending the money.
Why are these conversations important, after you've cashed the checks? For one thing, if you're building a company for the long-haul, you will know these investors for a long time--seven years or more, Shapiro says. You need to keep them happy. You need to continue to display that you're the best person to run the company. None of that will happen, if you delegate investor relations to someone else. "Investors also want to build a relationship, and they can't do it if they're always talking to a banker," he says.
Moreover, happy investors will continue to nourish your company and help it grow. Not only will they be inclined to participate in subsequent rounds of financing, but they will also "send you reams of employee referrals."
3. Company culture. "Whatever the culture is, it comes from the leader," Shapiro says. You probably already knew that, in principle. But can you act it, in practice?
It's one thing to behave like your authentic self, all of the time. But now that you're the leader of a budding organization, you need to think about how your team will perceive your behavior. "You may be forming a cult of personality around your best or worst quirks," notes Shapiro.
This simple fact should give you some pause. Shapiro encourages founder/CEOs to embrace it, and to "try to guide it toward something positive." If you relax about it--if you're a little too comfortable just speaking your mind or acting your will, authentic though it may be--you may be unwittingly creating a poor work culture, to the extent that your behavior is less than team-oriented.
On the other hand, if you're a model citizen at all times, you have little to worry about.