Smart CEOs open up in this situation, involve their investors constructively in the context of their situation and elicit their help. This takes a lot of work, but it is critical to prevent an all-or-nothing scenario where the CEO wakes up one day and realizes she’s lost the support of her investors.
Some VCs are excellent at expressing their feelings to management about performance; When things are not going well in a start-up, the pressure on the CEO is intense. others aren’t. The worst is the passive-aggressive VC who is agitating behind the scene but never willing or able to confront the CEO.
My experience is that the CEO needs to ensure that the communication lines are always open and clear. Easier said than done when you are facing a variety of styles, an investor with all of the answers, one who just asks questions until your head explodes, the quiet one in the corner taking notes, and the dude who can’t seem to put his BBerry down.
What you want to avoid is when having lunch with the lead investor and she says: “I don’t think things are working out. We have decided that we need to replace you as CEO.”
Actually, in this situation, if you take the situation seriously and avoid being defensive, you can take the first step to getting back the support of the investors or leave the position. In the latter situation work with the principals on a smooth transition.
Getting fired shouldn’t be a surprise, CEOs need to be assertive about getting feedback from the investors (or boards) on a regular basis even when feedback from different investors (board members) is cloudy.
Pierre Robitaille