Being the CEO of a successful business isn’t easy. In fact, it’s often a very difficult and lonely job. In addition to being responsible for the success of the business, you’re ultimately also responsible for your employees. They’re the ones looking to you not just for a paycheck, but also for guidance about every issue imaginable. While there are certainly no shortage of challenges that CEOs face, in our experience there are five questions that they consistently wrestle with. These are:
1. When should I raise money?
CEOs worry about this question all the time. That’s because the main reason why companies go out of business is that they run out of money. To keep a company alive, you always need fuel in the tank. Yet, CEOs often seek to delay financing to try to get a higher valuation and reduce dilution. They often also have overly optimistic views of the future, believing that since they’re in a pretty good financial position today, that will always be the case going forward. Of course, things don’t always work out that way.
In reality, most companies try to raise capital every two years. And while some CEOs can raise a $50 million round with just a few phone calls, if you’re not one of them, then be prepared for raising a round to take months of hard work.
It’s also important to note that if you want to avoid dilution and try to get to a higher valuation, venture debt offers a great solution. By allowing you to extend your runway and reach key operational milestones, you can use venture debt to delay raising equity until you’re in the best position possible to do so.
2. Do I have the right team?
As your company evolves and grows, your team will need to as well. The leadership team you had in place when you started your company may not be the one that you need five years later when you’re much larger and operating on a different scale. Don’t be afraid to take a hard look at the team you have around you and to constantly assess whether or not they have the skills you need to help you take your business to the next level.
Remember, while you always want to surround yourself with A players, those A players may need to change as your company evolves and grows.
3. What’s really driving the business?
CEOs often wrestle with the question of whether their business should be vision-driven, customer-driven, or competitor-driven. Of course, the answer isn’t to just be any one of those things, but rather all three. You should speak like you’re vision-driven, create a culture that is customer-driven, and make a strategy and set goals like you are competitor-driven.
You should be genuinely concerned with customer experience, but also keep an eye on your competitors. While what they do shouldn’t necessarily dictate everything you do, if they are killing you as a competitor, that can be pretty painful. Always remember to think holistically about what you’re doing and why.
4. How can I better manage my board?
One of the big changes that happens when you become CEO is that you’re no longer working for a single person, but rather for an entire board. Since managing a board can be quite difficult, it’s often best to throw some of the work back at them.
Assess who is good at what and start putting them to work, tapping into your board’s knowledge and talents to help you run the business more efficiently. The idea is to keep your board busy, because if it’s not, your board members could very well come back to you with ideas and ways of doing things that you don’t find particularly helpful.
To avoid that scenario, be proactive and direct your board along a path of discovery that you find helpful. Focus their energy where you want it, rather than allowing them to run you around.
Are we focused enough?
The short answer is you’re probably not. There’s a temptation to say that next year you’re just going to do more of what you did this year. No new products or innovations, just trying to grab more of a market that you are already well into.
If that’s the case, you’re letting the company down. By all means keep your big vision, but keep focused on next year’s plan, such as debugging the current model to make it work before you launch into other things. And establish a strategy. Vision is not strategy, vision is an end-goal and strategy is simply your plan to get there.
Getting advice when it matters
There’s no doubt that being CEO for the first time throws up a lot of questions and anxieties, but at heart, these issues are the same whether you are a new-comer or an industry veteran. While there are no one-size-fits-all answers, the reality is that if you can tap into other CEOs who you know, you’ll find that you can benefit from their experience and advice, and make the job of running your business easier and much more certain.