- Raising Serious Money
- Professional Management
- Strategic Shield
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Professional Management
While your company is growing, you will find that you, the entrepreneur alone, cannot handle everything within your company. In fact, most entrepreneurs are not very good managers, and they often suffer from the inability to stop making decisions on every aspect of company life. It is a sign of entrepreneurial maturity when the founders can trust newer executives to take key decisions. As a company grows, the founders should be more concerned about guiding the company to achieve the vision and help adapt to changes as appropriate.
Recruiting, therefore, takes center stage once there is some serious funding to support the company. This may require slick marketing, alumni networks, and targeted recruiting to bring in professionals who know how to run the show. These will have a network of industry contacts, and they often bring in their own team to create an instant capability, which may otherwise take an entrepreneur years to acquire.
But these people are hard to come by. An entrepreneur may need to "steal" good management professionals from other companies. They need to be enlightened about the entrepreneur's dream. They need to be convinced about the path to success that the entrepreneur has laid out. They need to see clear progress in the company's activities so far. They need to be convinced that they are placing the right bet. Last, but not the least, they need to be given the right incentives.
Incentives could be in multiple components ranging from tangibles such as cash and stock options to nontangibles like free memberships to golf courses and fancy job titles. Motivation in the form of compensation and participation in the creation of new value can be compelling in getting industry leaders to take a risk with a start-up. Professional managers may require being given specific roles and targets. They perform best when they can clearly see the target (unlike an entrepreneur who creates the company out of a hazy idea in the mind). When properly utilized, professional management can be very effective internally and against competitors.