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Transcript

E04 — What Got You Here Won't Get You There with Jon Lerner

Sometimes, in order to make progress, we need to change our approach. This is true for founders taking their seat as a CEO and for startups aiming to grow from Series A to Series B.

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

Discussion about this podcast

Unconditionally Human
Startup CEO Succession
Real stories from founder CEOs who stepped down, professional CEOs who took over from them and VCs who saw the process from the inside.