Why Founders Clash With The Investors on Their Boards
An analysis of the common causes of tension between CEOs and VCs, and some recommendations for how to fix it
At first it looked like it was going so well. Gavin had circulated an stylish, informative deck two days before the board. His investors showed up to the meeting on time. They’d read the materials. And they looked pleased with the great progress being reported. Yet three hours later, by the end of the meeting, Gavin felt like he’d been put through the mangle. His product, his reports, his sales processes, his team, his hiring: everything was bad, they seemed to be saying. “Before I went in,” he told me, “I’d have given our execution an 8.5 out of 10. After, it felt like a 4.”
What went wrong? As Gavin’s CEO coach, it was my mission to find out. At first sight, the superficial answer was obvious: the investors had asked some searching questions, and had concluded that things weren’t going as well as the CEO thought. And it was their fiduciary duty to the shareholders — not to mention to the limited partners in their funds, whose money they were managing — to pull the alarm cord. One of the board members, thinking of himself as a fearless truth-teller, had even talked Gavin through some quick mental arithmetic. In three heartrending minutes, he proved that the current trends in customers and revenue simply wouldn’t allow…
