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Q: How do I strike a balance between creating the startup I want to run, and making investors happy? I understand I will be working with their money, but it is my business.
-- Thulasi Ram
A: At the end of the day, when you raise money, the business becomes “ours” not “mine.”
Here are a couple of key phrases to always keep in mind following a major financing event:
1. Maximize shareholder return.
You’ve got to remind yourself that your goal as CEO once you have shareholders beyond yourself is to maximize the return for your investors. Following a financing event, you have to always keep their interests aligned with yours through that prism.
2. The CEO serves at the pleasure of the board.
If you set up a board following a financing event, then you need to remember that you while you will need to pay heed to those advisors, you still steer the ship. Not only are you running the company, in certain cases, entrepreneurs have the ability to "control" the board. So in essence, CEOs work at their own discretion. Still, in most cases, the CEO will end up with bosses. After all, the board is typically comprised of investors, and those investors are the ones who ultimately run the show -- in addition to the CEO, of course.
When you take other people’s money, you become accountable for the responsible use of that money -- legally, ethically and structurally. Thus, make sure you are ready for the change that comes with building a business with other people’s cash.
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The author is an Entrepreneur contributor. The opinions expressed are those of the writer.
Long-time entrepreneur and former CEO of Myspace, Mike Jones now serves as the CEO of Science, Inc., a Los Angeles-based technology studio that nurtures successful digital businesses by bringing together the best ideas, talent, resources and financing through a centralized platform. As a serial internet entrepreneur, Jones has founded, advised, invested in and sold numerous businesses, including application platform Userplane, which he led from startup to its acquisition by AOL, Tsavo Media, Movoxx, PeopleMedia, Brizzly and Myspace. He is actively involved with early-stage startups as an advisor, board member and investor. Among others, Jones has personally invested in more than 30 startup businesses including Klout, Betterworks, Formspring, ShoeDazzle and LunchMoney.