This is not a political blog. I’d rather stay away from politics
in this space but I’ve been really fascinated by this year's US presidential
campaign especially the Veepstakes, aka, the vice presidential selection
process. Choosing a running mate is a presidential
candidate’s first big decision. It’s also more than a little symbolic. It
reveals something about the candidate’s judgment and decision-making style. The
right VP choice can give the candidate a bump in the all-knowing polls. The
wrong choice can doom the campaign. See McGovern-Eagleton-Shriver, 1972.
Naturally, I see parallels to the venture world. The VP selection process is a high stakes example
of team building. The presidential candidate is similar to the
startup CEO/Founder who needs to surround himself or herself with the skills
and experience they lack. Electability drives the president’s VP choice. The CEO/Founder seeks a fundable team that
attracts investors. (Let’s call it fundability!) The CEO has the luxury of building
a team of VPs which is really more like filling out the Presidential Cabinet. Team
diversity in background and experience is prized by investors. It’s even better
if the team also has a history of working together in a successful venture.
The President's VP choice and the Cabinet also play a huge role when it comes to Presidential succession. The VP is a heartbeat (or lack of one) away from the presidency. The rules are simple. The VP assumes the role
if the President is “unable to discharge
the powers and duties of the office”. The line of succession goes all the way
down the list of Cabinet members ending with the Secretary of Homeland Security
at #18.
The succession rules are a lot simpler for a venture-backed
company. There usually aren’t any. CEO succession plans tend to sidestep life
and death issues. There are no automatic lines of succession or guaranteed terms
because the Board of Directors decides who’s going to run the company. There
might be some politics involved but Board members know that change at the top
is a necessary part of the growth cycle. As a venture matures it needs different
leadership skills:
Founder’s Vision > Raising Capital > Company Building > Business Operations > Getting to
an Exit.
When a Board votes for the company’s next leader, it’s not democracy
in action. It’s just smart business.