There is no shortage of great ideas in Silicon Valley and other tech centers around the country, but not all companies are created equal when it comes to their ability to turn that great idea into a viable enterprise that investors are interested in financing. One of the key factors that enters into this equation is leadership.
My Womble Carlyle colleague Newt Fowler writes a regular column for Baltimore CityBizList that often features the insights of successful CEOs. Newt recently interviewed Andy Grove, Managing Director of the Maryland Venture Funds, about what he's looking for in a CEO when considering investing in a company. Andy's "green lights" and "red lights" are well worth reading in their entirety, but a couple of points stood out for me.
In my experience, it's very difficult for a tech CEO to successfully guide an emerging company without having deep domain experience and a keen sense of the competitive landscape inhabited by the company. To be successful in taking a company to the next level, investors like to see the CEO thinking two or three steps ahead of the curve – leading the pack, rather than following it. Successful CEOs know their customers and how to meet customer needs and anticipate them.
When considering investing in a company, it's also hard to overestimate the importance of having a CEO who is capable of building and retaining a motivated, talented and mutually complementary team. And a big part of team building for the successful CEO is the ability to listen, learn from their mistakes, and adapt.
It's the rare leader who gets everything right the first time and the demonstrated ability to really listen to colleagues and customers and change course is a great indicator of future success. Hearing from the CEO about how they've dealt with adversity and changing market conditions in the past will tell you a lot about their chance to lead their company forward to a profitable future.
That's it for this month. Hope you've had a chance to enjoy at least a small Spring break. Back at you in April.
Best, Steve
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