A business startup has several needs that are different than other companies in the area of leadership and in the area of startup investment (startup business financing). This is important both for the founders of startups as well as for investors and those engaged in serious business coaching.
We’ve already discussed such issues as leadership styles, leadership traits and leadership skills for successful entrepreneurs. In the case of startups, there may not be enough money to hire all the kinds of leadership needed to round out the management competency ultimately needed, or so you think. This may be the most compelling reason from your point of view to seek a startup investment (startup business financing). It’s true — the need for hiring additional management help is one of the key reasons often given by entrepreneurs for the use of funds in small business startup funding. Is this really the best use of small business startup funding?
To answer this question, one key recommendation remains true, whether or not you are trying to locate a startup investment (startup business financing) or just trying to grow the business: the visionary founder of a business startup is best advised to find another individual who he/she can trust to manage the day-to-day aspects of the business, as soon as possible. Surprisingly, such individuals are widely available, yearning for a new challenge after years spent in corporate management. You may be surprised that such an individual, possessing the “managing leader” skillset, requires no pay at all for the first year or two of your business, willing to work for stock alone. It’s not uncommon for such individuals to actually invest their own money INTO your startup, as well as their time, for the opportunity to implement and manage the growth of a visionary business. Small business startup funding may not be an issue at all with the help of such an individual.
The benefits of this course of action for your business startup are enormous. First of all, as documented in the successful-entrepreneur blog (www.successful-entrepreneur.com), under Steps to Extraordinary Leadership #4, there is an extraordinary correlation between business success stories and partnerships, where one of the partners is of the “disruptive leader” type (inventor, innovator, visionary entrepreneur) and the other is the “managing leader” type. Investors are usually aware of this correlation, and so are almost always looking for a managing leader (business manager, CEO or president) paired with a founder when thinking about small business startup funding. What helps the business also helps you achieve startup investment (startup business financing).
You can understand the benefits to you if you think about it this way: Consider the range of skills needed to build an originally designed house. The architect (like the visionary founder of a startup) has the vision for what is possible and lays out the design. The contractor (like the business manager or CEO of a new business) constructs the house brick by brick according to the vision of architect. The skill set is entirely different. The way of thinking is entirely different. When waking up in the morning, what each wakes up looking to do that day is entirely different. It is very unlikely that an architect will have the patience, let alone the management and technical skills, to successful act as his own contractor. Likewise, it is (in our opinion, supported by observing many businesses over the years as investors) sheer folly for a visionary founder to also attempt to build the business brick by brick on his/her own. Even if it is possible to shift to business manager role, the founder is no longer able to work on the business as at visionary, no longer able to pivot the business as the market demands changes. It takes a combination of both types of leadership to ensure that a startup prospers.
From the point of view of providing business coaching for a new business, particularly one that is looking for small business startup funding, there is no more important issue on which to coach the founder, and no more difficult. Founders, especially those seeking a startup investment (startup business financing) are notorious for believing that they can successfully act simultaneously as business architect and business manager. When doing business coaching with a startup founder, we believe every effort should be made to persuade the founder of the importance of finding a second person to help build the business as CEO or business manager. The coach or advisor engaged in business coaching, whether professionally or informally, should point out that this kind of partnership does not have to be equal. The founder can retain a much larger percentage of ownership. What is important from a business coaching perspective is to address this issue as early as possible and to continue to address it until the founder is open to bringing on a business manager type.