The traditional belief among venture investors is that companies can only be created and led by founders with specific characteristics:
- They have had the original vision for the idea
- They have invested the initial risk capital. And suffered a significant opportunity cost by being at a low or zero salary for months or years
- The co-founders jointly own the majority of equity of the company (at least till the Series A stage) and this gives them the motivation to commit to the years required to build a company
Our belief? A little different. We certainly agree that many exceptional entrepreneurial leaders will often want to start their own venture. But not always.
A certain number will never start a venture and will (and perhaps should) only work as a part of an entrepreneurial company.
And there is another set of leaders who will not be content either being an employee, nor will they want to (or be able to) startup their own venture.
We believe that for a few entrepreneurial people, becoming an ‘inorganic’ co-founder CXO at a Prototyze venture is an excellent option.
Yes, only a fraction of every hundred potential entrepreneurial leaders will choose this as their preference. But that fractional catchment is enough for us.
Our belief is contrarian. But we believe it is right.
We believe that the mind-set that is against this belief is similar to the thinking decades ago which was against adoption. On the closed-minded premise that “Adopted children will never have the love and loyalty towards the family that biological children do”.
We believe that, for organic reasons, the founder-driven model will remain the most common model, just as biological children will remain the overwhelmingly common model in a parent-child relationship. But there are viable alternatives that—for certain people—work better than conventional ones.
Therefore, our challenge is to validate the following hypotheses about leadership:
- Can we even find such leaders? People who are capable enough to startup their own company BUT for one or more reasons do not want to or cannot do so?
- Can we ensure that in finding leaders inorganically, we do not have to compromise on their character, values and cultural alignment?
- Can leaders who did NOT have years of friendship behind them still end-up working as a harmonious team?
- Can we find a structure to financially reward them to an optimum level? Which means they see that their potential outcomes are a very good middle path between the extreme high-risk and high-reward of the startup founder’s life and the other extreme of life as a corporate employee.
- Can we ensure their commitment across years? What will be the insulation against a departure-of-convenience which would be incredibly damaging? And which is almost unthinkable in typical startups.
We believe that we can. With considerable investment of thought, and constant re-examination and evolution of our model, we can. And this is how we have found the 3 to 5 CXOs to form the core of each venture.