Will you be fired as CEO after taking Venture Capital funding? –
November 8, 2012
Next month, on Thursday, November 8, 2012 at 730am, I will serve as moderator for the meeting of 128 Innovation Capital Group (128 ICG), at the IBM Conference Center, 404 Wyman Street, North Entrance in Waltham, Massachusetts. Our speaker, whom I recruited, will be Greg Dracon, Principal, .406 Ventures (www.406ventures.com)
Greg will speak onthe subject – “Will you be fired as CEO after taking Venture Capital funding?” It’s a question that Greg as a VC is often asked, especially by first time founder CEOs. He will discuss what often happens to founder CEOs after taking VC money. How if the founder CEO is replaced this can be a good thing or a bad thing for the company and also a good thing or a bad thing for the founder CEO. What things to watch out for as you consider taking VC investment in your company.
In preparation for this 128 ICG meeting, I would also offer the article I wrote published in Mass High Tech, which dealt with the issue of succession in startup companies that succeed in their launch, seeking growth capital from VCs. The article points out as I suspect Greg will point out that despite success in launch, investors often force succession of the first-time founder with a new CEO experienced in maintaining in scaling the company to new growth. My article offers suggestions to try to make the succession successful for all sides. However, my article also takes account of the founder’s point of view and offers pointers to the first time founder on things to watch out for, how to respond and how to protect your interest as a shareholder and employee when succession is to occur.
(This second link includes a box that appeared in the original print edition of my article and is left out at the Mass High Tech website – the box is entitled “Carry Protection: Basic Protections to seek in succession”. )
Our speaker, Greg Dracon joined .406 in 2007 and is involved in all aspects of the investing and portfolio management process. He brings 18 years of venture investing and technology operating and management experience. Greg is actively involved with the firm’s investments in Ambient Devices, Kaltura, WellAWARE™ Systems, Vaultive, EnergyHub, Mashery and MineralTree.
Prior to joining .406, Greg was a Vice President of Core Capital Partners, a venture capital firm focused on early-stage venture and small to mid-sized growth technology companies. At Core, Greg focused on software, digital media, technology-enabled services and wireless applications. From 1995 to 2005, Greg held various operating and management roles at Texas Instruments, including positions in worldwide sales, business development, product distribution and digital signal processing applications. Greg received his MBA, with majors in Entrepreneurial Management and Finance, from The Wharton School of the University of Pennsylvania and his BS in Electrical Engineering from The Pennsylvania State University.
For more information or to register for this meeting, go to http://www.128icg.org/
(information and registration should be available by October 15.)
Hopefully, this topic and meeting will be helpful to entrepreneurs in small and early stage companies I represent.
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I remain active at 128 ICG, a Waltham-based group that aids and provides a networking opportunity to entrepreneurs, small and early stage companies, and people who invest or work in those companies.
128 Innovation Capital Group (www.128icg.org), is now in its 8th year since, as a founder, I helped that group re-emerge from the 128 Venture Capital Group (founded in 1982). I’ve been a 128 ICG board member since 2004 and recruited speakers and moderated 15 of the 33 past meetings of 128 ICG in 2010-2012, including the following:
- Finding Your Optimal Investor – Due Diligence for Entrepreneurs, August 9, 2012, with Luke Burns, Partner at Ascent Venture Partners.
- We Can’t All be Facebook … Nor Do We Want To Be! July 12, 2012, with Rick Grinnell. Managing Director, Fairhaven Capital Partners.
- Structuring your Financing for Capital Efficiency and Exit Strategy, April 12, 2012, with William McPhee, an investor with Boston Harbor Angels and Board member at The Capital Network.
- Alternative Funding Models for Clean Technology. February 9, 2012, with Eric Emmons, Investment Partner at Siemens Venture Capital and head of the Siemens Venture Capital’s Energy Fund.
- What’s Your Company’s Value Proposition? How Are You Viewed by Investors, Customers and Employees? October 13, 2011, with Jack Derby, member of Common Angels.
- Management Team, Board of Directors, Advisory Board – How to Best Utilize Your Company’s Talent, August 11, 2011, with Jenny Freeman, M.D., member of Boston Harbor Angels.
- How Social Marketing Transformed the Gaming Sector: Social Gaming vs. Traditional Gaming, February 10, 2011, with Dayna Grayson, Principal at North Bridge Venture Partners.
- Habits of Highly Effective Management Teams, November 11, 2010, with Elliot Katzman, General Partner of Commonwealth Capital Ventures.
- The 5 Things you MUST KNOW about Raising Angel Investment, October 14, 2010, with Hambleton Lord, Managing Partner of Launchpad Venture Group.
- Mobile Innovation in New England: Entrepreneurial Opportunities for the Future, April 8, 2010, with Sean Marsh, CoFounder and General Partner, Point Judith Capital.