Nivi · April 4th, 2010
Seed-stage investors don’t like top-heavy companies: CEO, COO, CXO, CYO, VP of X, Y, and Z. It’s almost an immediate pass. No sophisticated investor is impressed by titles in an early stage startup.
If you’re an early-stage consumer internet company, you don’t need fancy titles, you need founders and employees who get can either build the product or sell it. (One of the founders should be the CEO so you can make decisions quickly.)
There are many exceptions to this bit of advice but, unless you really know what you’re doing (you’ve been starting companies and investing in them for the last 10 years), keep it simple. CEO, founders, engineers, salesmen, marketers. If one of the founders wants to be the President, give him an internal title, but keep it simple for investors.
Generally agree with this. What do you think of the traditional CEO/CTO split between two co-founders? IMO this is fine, as long as it’s just those two.
Hi N.v.* dudes,
Generally agree with this advice, it absolutely can make a company look amateurish and DOA if there are five founders all with C-level titles.
That said, I have to pass along a viewpoint from some of the younger entrepreneurs I mentor, which is- “Ever notice how all of the people who say that are already successful and don’t need titles?”
I think that is a fair point and I think there *is* value to titles in a limited scope, that is:
1) A title should *never* mean that any founder (or any employee for that matter) is “above” pitching in on any job;
2) It can look just as amateurish if the founders have not clearly outlined roles that make sense and are sustainable contributions;
3) As you note, titles should mostly be for internal use and not for blasting all over on day one;
4) Titles also can serve as shorthand/elevator pitch. Five years after starting Going I still mostly describe myself as co-founder, but without exception people (both lay and sophisticated) ask me what I actually did or, worse, make their own assumption that I was just a dilettante dabbler.
I plan to write a blog post with more practical details for first-timers soon.
P.S.: HUGE fan of Venture Hacks, I’m also a mentor and hope to join AngelList soon š
Agree with the sentiment.
We still use simple honorific titles in our company simply to explain who is the business guy, the marketing guy and the tech guy. It is good to have some role delineation, even in a startup, but modesty is called for when you only have a staff of three.
The good news is that you get to learn a lot of different tasks in a startup. So as “CEO” I’m also effectively “CFO”, “Chief Legal Counsel,” “Asst. VP Marketing” and (so my tech guys can write code uninterrupted) “Chief Cook & Bottle Washer” (literally).
I just can’t fit all that on my business card.
Some of the points to consider:
* So many founders/owners get caught up in their egos with needlessly large titles. This creates politics, which slows down the company. Is it that easy to build companies that we can afford such distraction?
* If you need to hand out big titles to attract people, are you bringing in the right team members?
There are always arguments for handing out big titles, but in reality, until you are big enough (30-40-50 employees plus), keep it flat, keep it simple.
It’s also really important for the founder/ceo to have their feet on the ground working with clients. If they don’t have the passion to get clients on board it will be very hard to get a sales person to do it.
In the early days I think it’s appropriate to give anyone consumer-facing a title that indicates their ability to make decisions. If you’re pitching BigCo on your product, they will feel like they should only be talking to people at a certain level, and an inflated title can help the company avoid sending the senior management to meetings unnecessarily. This shouldn’t be VP or C-level titles — director is a good formal version of this. “Runs our X” or “heads up X” are informal ways of introducing someone and giving them the same stature.
My experience on this is in b2b sales, may not matter nearly a much for b2c consumer web.
Do titles really matter? Not IMO. Any investor, employee, or other outsider worried about this is too superficial. Call yourself and anyone on the team whatever you want. Just remember that you must be humble enough to know when the position has outgrown you and it’s time for a more seasoned person to fill the role. The only important thing is whether or not you can work well together and cost-effectively deliver results that matter to the market. The rest is just noise.
I agree with the post. That said, Tyler is right in saying that employees who are going to do deals for the company need to have a title that lets the other company (with whom you are doing the deal) know that this person has the authority to do a deal. Having been the first business person at five startups, I’ve often addressed this by giving people the seemingly odd titles with “Head of,” ie. Head of Sales, Head of Engineering. (Note, this also works when doing business outside the USA where “VP” titles often are not used. “Head of Sales” is clearer, “VP of Sales” (in some countries) is not clear.
Also….one way I’ve seen investors address the need for experience at a startup w/o adding a ton of expense is to hire an “Interim CEO” until the company is up to speed. I’ve done this at companies, then I’ve handed the reigns to the young founder. Best of both worlds. This short post describes the details on how this can be done: http://bit.ly/4qwCL1
Great comments, and wanted to ask a follow up.
With the ability for many start-ups to stay quite lean, with outsourcing and contract work, I see a lot of companies able to keep staff to less than 10-15 even once they seriously ramp up and start making money.
Is it still strange for a company of 10 people to have 3-5 C-level types, and even the additional staff having VP or Management titles?
When a lot of the grunt work can be placed elsewhere, does it make sense to only have an in-house team of exec’s and management?
Definitely agree with this. Startups should apply the KISS theory to their management titles because fancy titles are not what’s going to grab attention. I always say focus on the product first then worry about personnel titles.
Hmm, well I have laid claim to the title of CEO of our proto-startup and partnered up with my friend Tyler who’s taken on the title of Chief Hacknical Wizard.
I have begun pursuing funding for our open social reader/tagging game. I’ll be careful to adjust our explicit titles as founders to external investors. Admittedly I care much more about the quality of our efforts than titles at the moment.
I noticed comments changed. No Disqus, but some great guidelines to guide quality comments.
I don’t agree with you, and think your title should represent the full scope of your role in the startup.
“Cofounder, CEO, Chairman of the empty board and VP Crystal Ball.”
Maybe this is THE perfect example: http://www.twitpic.com/128x3q
Titles mean that ultimately the buck stops with the entitled person. I’ve seen all-too-often start-ups where the CTO isn’t really one and that the dev who’s managing the team is the real one.
There’s the org chart and then unofficial sources of power in any group.
Fancy titles are in fact a waste of time. Everyone knows a great company starts with a logo. j/k seriously, I cannot agree more with this article. Do something. Do it well, and do it better, right? Everything else is navel-gazing. I think people feel pressure to adopt certain corporate behaviors but the only ones that really seem to matter are hard work, creativity (the same thing really) and being respectful to people. Speaking of, I need to get back to work. Thanks for writing this.