Founders must avoid taking a strategic role too early before the company is ready for it.
That’s the warning of David Foreman, co-founder and managing partner at Praetura Ventures.
Writing in his typically hard-hitting LinkedIn column, Foreman said the most dangerous advice given to founders is: ‘Work ON the business; not IN the business.’
He said, although well intentioned, the advice was ‘bullsh*t for most founders because the business isn’t big enough, or mature enough, for it.
Foreman wrote: “I’ve seen founders with less than £1m revenue telling themselves they need to step back and work ON the business.
“They build a C-Suite with individual people responsible for each area of the business – incurring huge cost to do so.
“And they wonder why they are CONSTANTLY fundraising and why investors are CONSTANTLY on at them to ‘reduce burn’!”
Foreman said founders of early-stage companies, with less than £4m ARR and up to £10m ARR, need to be a mix of a chief sales person; head of people; strategy director; product manager; financial controller; marketing director; and possibly head of dev.
“That’s why being a founder is so f***ing difficult,” wrote Foreman. “They’ve got to learn to be good at so many different skills within the business.
“I’m not saying everything falls to one person. Very, very few people could take on ALL of those responsibilities.
“But what I am saying is that most startups simply can’t afford to have a founder or founding team that isn’t ‘on the tools’.
“Founders need to be in the business, at the coal face, speaking to customers and their teams and rolling their sleeves up.
“Being on the detail, not behind the strategy slide deck. This is more true in 2023 than it has been in the last five years.
“For avoidance of doubt, I’ve made this mistake in the past and listened to the ‘on not in’ advice and I got it wrong. This is not a criticism of founders, it’s a criticism of the oft-cited advice.”
Praetura Ventures has been supporting entrepreneurs since 2011 and their tagline is ‘more than money’.