This week I’m speaking to Jonathan Lerner, a partner at Smedvig Ventures. Jonathan invests €4-8m in B2B tech startups that passed €750k ARR, participating in or leading rounds of up to €20m.
As an investor, Jonathan sees companies grow from Series A to Series B, and the evolution their founders go through on the way to taking their seat as CEO. We dive into all of this in today’s episode. I shared my own reflection on the parallels between these two journey in a separate essay last year: From founder to CEO, from Series A to Series B.
Smedvig Ventures’ website has a catchy headline: What got you here won’t get you there. The mistake founders sometimes make is doubling down on what made them successful as founders when they need to step into a CEO role.
Likewise, what helped their companies to get to Series A metrics will not help them get to Series B metrics. In order to keep making progress, both the founder and the company need to change how they operate.
We explore both perspectives and much, much more in this in-depth conversation with Jonathan.
Timestamps
(They are clickable on YouTube, but not on Substack yet, I think).
00:00 Introduction
01:35 What got you here won't get you there
03:23 CEO transition from VC's point of view
10:11 When to start delegating
15:52 Backing founders, not evaluating CEOs
18:10 When is a startup ready for a new CEO?
21:11 Founders starting a succession conversation
27:25 Investors starting a succession conversation
29:49 Legal aspects of asking a CEO to leave
32:30 Wisdom of discussing it early
36:32 Transitioning to a non-CEO role
40:59 Rebalancing the cap table
43:09 Aligning a fundraise with a CEO succession
48:54 Internal vs external candidates
50:59 "It always happens too late"
52:31 Raising it at the board level
53:51 Balancing different responsibilities
56:18 The cost of not being close to the business
59:06 What helps founders grow into CEOs
01:02:18 Shifting the conversation as a community
01:04:17 The importance of building trust
01:06:38 Summary of the conversation
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