Startup general interest

Vinod Khosla on VC board directors and founders as CEOs

By November 15, 2012 4 Comments

Vinod Khosla has been round the block more times than most anyone in the venture capital industry, first at Kleiner Perkins and more recently at his own firm Khosla Ventures and on Saturday he drew on that experience to pen a very thoughtful post: If, when, and how to avoid hiring a CEO. This is a very emotive subject and much of the debate is characterised by chest beating and/or positioning but Khosla gets to the heart of the matter with a set of reasoned and reasonable assessments:

  • The best case is that the founder remains as CEO
  • Founders are typically great visionaries and as the business scales they will need help from people who are skilled at execution (professional managers)
  • Professional managers can be hired either as COOs or Presidents
  • But sometimes giving them the CEO job title is more appropriate – either to attract better talent or because the founder prefers to focus on the vision, often in a technical role

Khosla’s main piece of advice to founders is to work hard to be self aware and know their strengths and weaknesses. That includes candid conversations with the board.

If that has whetted your appetite go read the full post – the extra detail is great and it is shot through with real life examples.

The other thing I wanted to bring out was Khosla’s approach to being a board director:

I feel a board shouldn’t have to vote on anything except their confidence (or not) in management. In 25-plus years of being on boards, I have never once voted against a management team except on the question of whether the CEO should be changed. I feel free to argue informally, to have real, sometimes uncomfortable discussions, and to leave the final decision to the team that will execute it. It is hard for a team to execute well when it does not agree with what a board voted to do, or conversely to be fully honest, open and objective about all its alternatives if they believe the board is going to make the final decision on an issue.

To true.

Thanks to @azeem for pointing me to this article.