Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at email@example.com.
Q. I’ve been pursuing my own idea, but I want to go back to working on something more stable, though still meaningful. I have an offer to be a CEO at a company that is almost out of cash but about to raise a Series A. (The current board will make introductions to other investors but is not planning to lead the round.) It is risky, but I know I can make a difference. Your advice?
—Founder considering a CEO gig
This is a big question, not only because you have a big decision to make, but because that decision rests on figuring out what truly matters to you. What are you looking for? What’s most important?
I understand that if you are coming from a startup that didn’t take off, you are desiring a certain sense of security. If that’s the case, a company that’s raising a Series A round might not be the right move for you. That’s pretty early in a startup’s life—way too early to know with near certainty that it’s going to make it. It might make sense to join a company that’s more mature but that still has exciting prospects.
Of course, the opportunity of joining something early is exciting, as we believe there’s nothing as exciting than building something from the ground up. But that also means that too often we dismiss later stage companies as being able to offer incredible opportunities. I joined eBay after it had already gone public, and I can tell you there was an opportunity to make a real impact as well as reap significant financial rewards.
Don’t limit yourself to this one offer. Joining a startup that doesn’t have funding, and that makes you responsible for raising money, puts you in a tough position. The biggest thing this company needs is cash, and if the board isn’t willing to give it cash, that’s a red flag. Board members who are truly excited about an investment want to keep it to themselves, not give the opportunity away to other investors. A happy board member doesn’t just open doors, it opens its checkbook.
Maybe you find the CEO title very compelling. That’s not surprising. Oftentimes, I see people become enamored with being a CEO. But I’ve learned that the title doesn’t really matter. Think about it: Anyone can start a company and name themselves CEO. Poof! There’s the title. But it’s meaningless. Instead of fixating on positions, we should be fixated on outcomes.
Congrats on your offer—it is wonderful to have an option. But let’s keep this in perspective. This is the first thing to come along, and it makes common sense to look at other opportunities as well. Instead of just jumping into something, approach this as a process. Get out there and start networking. Don’t write off opportunities at later stage companies that can use your skill set and knowledge. Instead, look at all of your options, and vet them carefully. Prize the companies that are breakouts and going to have a lot of growth.
You have already spent some years at a startup that didn’t take off. That came at an opportunity cost, among other costs, as well as some great experiences and learnings. You need to make sure that your next investment pays off. You want to make sure you’ll see a return—financial and otherwise.
I know you will work at hard at anything you invest in, but it’s much more fun to work on something that is growing and making an impact rather than something you have to dig out and try to save.