- Short Description:
- Mindset is similar to a majority ownership PE-style investor. In this approach, the CEO/founder works for the investor and should fully report on a regular basis. Details of the CEO/founder’s execution should be subject to review at any time by board members/investors and they should not move forward with projects, capital allocation decisions, or hiring without checking with the board first.
- Benefits:
- For an underperforming or indecisive CEO or company, the approach may provide direction in the short-term
- Trade-offs:
- Many CEO/founders may feel their sense of autonomy to be threatened particularly if the investor has not been explicit about the arrangement upfront.
- The investor has less time to devote to other parts of running the firm if thinking about potentially dozens of portfolio company situations in this detail. A portfolio size should be considered carefully if the investor wants this level of involvement.
