and eschewing political correctness I am not meaning to imply that women cannot or should not fulfil either the Chairman or CEO role better than men, I am just attached to the English language) almost before he or she has got a business.
“An experienced Chairman will know that it takes longer to build a business than most entrepreneurs think”
By definition, a first time entrepreneur has not built a business before, so having someone on the team who has done it and can help to point out some of the potential pitfalls is invaluable. Some entrepreneurs think that admitting that you don’t know it all and can do with some help is a sign of weakness; in fact recognising the need is a sign of great strength. And a second or third time entrepreneur, older, wiser, with a lesser need, is likely to be more aware of that.
The Chairman can act as an invaluable sounding board while the business plan is being constructed. He can ask good questions and point out flaws. He or
30 entrepreneurcountry
she will know from experience that it takes longer to build a business than most entrepreneurs think, with their unbounded enthusiasm and optimism. A good Chairman knows how to help a founder CEO arrive at a more achievable plan without sapping energy or causing negative feng shui.
Then, with a credible, realistic plan in place it is easier to determine a robust strategy for raising finance for the business. If the Chairman is an angel investor, as is likely, he or she may well be the first source of outside capital. The credibility conferred by this outside investment, coupled with the probable contacts in the financial world stemming from previous business ventures, will significantly increase the chances of raising institutional venture capital investment when it is required. Knowing whom to approach is one thing; being able to open the door and make sure that you can pass through it and get proper consideration is another. And if the Chairman’s first investment seems to be at a keen price (after all, he is meant to be a smart businessman), the extra distance that some early fuel in the tank has helped you to drive, and his involvement (in the navigator’s seat, not the driver’s), may well improve the terms of the first institutional funding more than enough to balance out that early dilution.
Then your Chairman begins to play perhaps the most important role of all, as a two way pressure valve between you and your investors. The first experience of venture capital term sheets and the legal process
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