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Top-heavy teams

I met with a 10 person company the other day and once I got to Slide 2, I immediately started having questions about the opportunity.  What struck me was a company that had a CEO, COO, and a VP of Marketing and a VP of Sales.  You have probably heard this many times before but I will reemphasize the point - companies have different personnel needs at different stages of development (start-up, first customer sales, rapid growth, maturity).  It is also more costly to bring in the wrong hire then to wait to bring in the right hire.  The entrepreneur was obviously quite proud of his team thinking that he would get over some major objections from investors.  I, on the other hand, saw a startup that had too many chiefs and not enough indians.  I also saw a team that probably did not have enough discipline to ask the tough questions and make difficult decisions.  I mean why does a 10 person company need a CEO and a COO?  As an early stage investor, I would rather have a company with a clean slate that we can build a team around rather than a fully-baked team when we don't necessarily know if the market is the right one to go after and if the product is the right product.  When I fund an early stage company, I would typically rather have an entrepreneur that has product vision, a development team to execute around that, and the openness to build a team around him as the company grows.  It can be death to have a top-heavy organization from Day 1 because startups change and change frequently during the early days.  Don't lock yourself in with big salaries, big options, and big egos until you really know what market you are going after, the skills and experience you will need to win that market, and the product is ready for prime-time.  In a future post, I will walk you through one of the biggest and costliest mistakes I have seen early stage companies make - hiring a VP of Sales too early.

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Listed below are links to weblogs that reference Top-heavy teams:

» Do you really need a superstar executive team for your startup? from FlatEarthVentures.com
A startup needs a small, lean team where every person can perform some key aspect of product development. This lets you get to market cheap and fast. What you dont need in the startup stages is a superstar CxO team (CEO, COO, CFO, CxO). Why?... [Read More]

» Startups and Titles from TechJots
Ed Sim had a great post recently about top-heavy startup teams. I agree.  My view in any startup -- including ones in which I have been directly involved -- should always be prepared to layer every employee with someone better [Read More]

» Entrepreneurial Team Building from BKM Blog
Ed Sim at BeyondVC has an interesting post today on entrepreneurial team building addressing probably the most critical aspect of it .... namely the issue of when to hire key executive roles and the notion of the overstacked early stage [Read More]

» Top-heavy teams from Startup Fever
Ed Sim warns against top-heavy teams: It can be death to have a top-heavy organization from Day 1 because startups change and change frequently during the early days. Dont lock yourself in with big salaries, big options, and big egos until you ... [Read More]

» Venture Zine from Zoli's Blog
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