Tuesday, March 06, 2007

Serial Entrepreneurs: the new Glass Ceiling?

A few years ago, I had a number of clients who were former investment bankers and private equity investors. They were casualties of the slowdown in high tech investing, looking to start or buy their own businesses to run. Almost all of them said the same thing: "I don't ever want to work for someone else again."

Fast forward a few years, and many of them have returned to the private equity game. At their core, they are high risk, high reward players. They can't stay away.

This same trend seems to be emerging among founders in the startup world. I work with many who, after two or more successful startups, still find themselves unable to break the founders glass ceiling to remain as long-term CEOs. "You're more of a serial entrepreneur," they are told dismissively by their investors.

In truth, some of them really are better suited to company creation than operations. That doesn't mean they don't feel the sting of being pigeon-holed. I understand; I may not look good in bootcut jeans, but I still want to buy them.

Many founders don't object to the principal of hiring a professional CEO, but to how their VCs execute on it. A common complaint I hear is that the VCs underhired, selecting someone who will have to grow into the CEO role(a big company exec, or a CEO from a different industry segment). Or that the board overtrusted - allowing the new CEO to make too many changes, or to underperform without consequences.

The result? Increasingly, founders who are frustrated by the limitations imposed on "serial entrepreneurs" are building their next companies on strategies that do not require venture capital. They don't want to work for anyone else.

I'm betting this is a temporary blip on the screen.

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