Hiring a CEO for a startup company is a delicate and important decision, changing the company in question to its core.
Tread Carefully Yet Decisively
We have been involved in the hiring of a few CEOs, in Silicon Valley and abroad, since 2001 when during the incubation of a budding startup we created the vision and execution for (and later exited at over $100M), we felt the need for a sound methodology to help founding members, advisors, board directors, and investors make smart hiring decisions.
In general, and especially when new investors come on board, the decision to hire or replace a CEO can be a daunting process that dramatically impacts ownership and thus affects how major stakeholders, founders and prior investors, in the company feel about the sale of that ownership. So, the importance of a well-thought-out hiring process is crucial in preserving the faith in the future of the company.
And, as my readers know, I am no big fan of subprime venture capitalists that are aplenty in Silicon Valley, and I am very skeptic of the corporate executives they often drag along. People who made their money in the bosom of cash-cow comfort and then bought a cheap hobby-CEO seat at the startup-table, seldom proving to be the roll-up sleeve visionaries to drive unprecedented outliers to success. All the more reasons to evaluate startup CEOs more deeply.
Example
So, in 2001 we created an interview questionnaire process to facilitate in the process of hiring a new CEO, in this case, populated for an enterprise software startup. The document and its process have since been adopted by recruiting firms in Silicon Valley, and with this, we make it available to the general public.
By no means is this document designed to contain an all-encompassing evaluation, for we adjust the questionnaire to meet the needs of the specific company in question. This document does embed and suggests – most importantly – a structured process by which multiple members of the executive team, advisors, and board members can apply the critical success factors needed to evaluate a CEO candidate diligently.
The Process
Depending on the startup, defined by the requirements of company type, industry and stage, the critical success factors identified as milestone and tasks are gathered and agreed upon on ahead of time, collated from what the founding members, investors, and board members, each from their own perspective of the CEO role, collectively identify as paving the runway through the stage(s) of the company’s expected runway to foresight.
The interviews, performed by interviewers 1-6, are marked per page (in case pages get lost), their names in some cases, as determined by the orchestrator, withheld from sharing with the pool for privacy reasons. Each interviewer gets the full deck of questions, even if some of those questions do not speak to the core competency of the interviewer. The idea here is not to have a supposed expert CEO be interviewed by the same kind of experts only, as the most important role of a CEO is, arguably, to convey operating decisions and convey a budding value proposition to a greenfield of less knowledgeable constituents. The CEO of a startup company – in our view – must be able to inspire a team of any composition, in or outside the company.
The score assigned to the interpretation of milestones/tasks range from 1-10; 0 interpreted as bad ranging to 10 as very good by the interviewer. The interviewers should not be extensively briefed on the milestones and tasks beyond what the sheet contains, as each interviewer should have the seniority of general understanding, and the CEO getting the question should be able to explain the essence and minutiae of them, if required. An interviewer can skip a milestone or task should they feel out of depth by simply entering no score.
After the interviews have taken place, the orchestrator collects all the scores in the end and weighs the relative importance of the individual score against the relative core competency of the interviewers, feeding the weighted scores back to the hiring team for final review and hiring recommendation.
Download Now
The downloadable PDF version of our process and questionnaire is available here: TVCCEOEVAL20190402. Upon request, we can send you the original document for customization purposes.
