Capabilities of the Executive Team Needed for Each Round of Funding

As a startup CEO, you know that having a strong executive team is essential for success. However, as your company grows and secures additional funding, how do you assess the bench strength of your executive leadership team (ELT) and ensure that they can lead your company to the next level? With each round of funding, the requirements of each key leadership role evolve. The following compares the critical leadership capabilities to consider when assessing the ELT (including the Chief Financial Officer, Chief Revenue Officer, Chief Human Resources Officer, Chief Technology Officer, Chief Product Officer, and General Counsel) capabilities as your organization grows from a series A-funded tech startup to a series D-funded tech company.

Chief Financial Officer (CFO)

The role of the CFO evolves with the company's growth by stage, and there are critical factors to consider when evaluating their capabilities during each funding round. Below are key considerations:

Series A:

1. Financial Expertise: The CFO should have solid financial acumen and expertise, including financial planning, accounting principles, budgeting, and forecasting.
2. Fundraising and Investor Relations: As the company raises its initial funding, the CFO's ability to secure funding, build relationships with investors, and effectively communicate the financial strategy is crucial.
3. Financial Controls and Reporting: The CFO should establish proper financial controls, implement accounting systems, and provide accurate and timely financial reports to support decision-making and regulatory compliance.
4. Cash Flow Management: The CFO needs to focus on managing cash and should be skilled in optimizing working capital, monitoring burn rate, and ensuring adequate financial resources for growth.

Series B/C:

1. Financial Strategy and Planning: The CFO should develop a comprehensive financial strategy aligned with the company's growth objectives, including financial projections, capital allocation, and investment decisions.
2. Scalable Financial Systems: With growing operations, the CFO should ensure financial systems and processes can scale effectively, including accounting software, financial controls, and reporting frameworks.
3. Risk Management: The CFO should identify and manage financial risks associated with growth, such as market volatility, operational risks, and compliance with financial regulations.
4. Investor Relations and Stakeholder Management: As the company progresses, the CFO's role in investor relations expands. They should maintain strong relationships with existing investors and attract new ones by effectively communicating financial performance and growth prospects.

Series D:

1. Strategic Financial Leadership: The CFO needs to provide strategic financial guidance to support the company's long-term growth objectives, including capital structure, mergers and acquisitions, and financial (banking) partnerships.
2. Financial Analytics and Performance Measurement: The CFO should use data-driven insights to analyze financial performance, identify key metrics, and provide actionable recommendations to drive efficiency, profitability, and ongoing sustainable growth.
3. Compliance and Governance: The CFO should ensure the company complies with financial regulations and reporting requirements and establish robust corporate governance practices (GAAP), including financial controls and risk management.
4. IPO Readiness: If the company plans to go public, the CFO should possess IPO experience or the ability to navigate the complexities of the initial public offering process, including financial due diligence, regulatory compliance, and investor relations.

The CFO's capabilities should align with the company's growth trajectory, financial strategy, and evolving needs at each funding round. Regular evaluations of the CFO's performance, ability to adapt to changing circumstances, and ongoing professional development can help ensure they effectively support the organization's financial goals as it progresses from a series A-funded tech company to a series D-funded tech startup.

Chief Revenue Officer (CRO)

The role of the CRO is focused on revenue generation and sales strategy, and there are critical factors to consider when evaluating their capabilities during each funding round. Here are some key considerations:

Series A:

1. Sales Strategy and Planning: The CRO should have a deep understanding of the market, the competitive landscape, and organization’s target customers to develop an effective sales strategy and go-to-market plan.
2. Sales Team Building: Building an initial sales team is critical; therefore, the CRO should have experience in recruiting, training, and motivating sales professionals who can execute the sales strategy.
3. Sales Process and Pipeline: The CRO should establish a structured sales process, define key performance indicators (KPIs), and implement a pipeline management system to track and optimize sales opportunities.
4. Customer Acquisition: The CRO should focus on acquiring early customers, developing new and cultivating existing customer relationships, and refining the value proposition based on customer feedback.

Series B/C:

1. Sales Scalability: The CRO should demonstrate the ability to scale the sales organization, including expanding the sales team, optimizing territories, and implementing sales automation tools.
2. Revenue Forecasting: As the company grows, the CRO should develop accurate revenue forecasts and provide insights into revenue drivers, growth opportunities, and potential risks.
3. Strategic Partnerships: The CRO should identify and establish strategic partnerships to drive revenue growth including channel sales, distribution partnerships, reseller agreements, or technology integrations.
4. Sales Enablement: The CRO should ensure that the sales team is equipped with the requisite training, tools, and resources to sell the company's products or services effectively.

Series D:

1. Revenue Optimization: The CRO should optimize revenue streams, pricing models, and sales strategies to maximize profitability and drive growth.
2. Sales Analytics and Performance Management: The CRO should leverage data analytics to measure and improve sales performance, identify trends, and make data-driven decisions to enhance sales effectiveness.
3. Customer Success and Expansion: The CRO should collaborate closely with the customer success team to ensure customer satisfaction, retention, and upsell/cross-sell opportunities, driving expansion within existing accounts.
4. International Expansion: If the company plans to expand globally, the CRO should have experience in international markets, understand cultural nuances, and adapt sales strategies accordingly.

The CRO's capabilities should align with the company's growth trajectory, revenue goals, and evolving market dynamics at each funding round. Ongoing reviews of the CRO's performance, their ability to drive revenue growth, build and lead a successful sales organization, and adapt to changing market conditions can help ensure they effectively contribute to the organization's revenue objectives as it progresses from funding round to funding round.

Chief Human Resources Officer (CHRO)

The CHRO is vital in managing the organization's human capital and shaping its culture. Below are critical factors to consider when assessing the CHRO's capabilities during each funding round:

Series A:

1. Talent Acquisition and Recruitment: The CHRO should have expertise in cultivating the employee value proposition, attracting top talent, building recruitment strategies, and establishing processes to identify candidates who align with the company's culture and values.
2. Organizational Culture: Developing and fostering a positive and inclusive culture is essential at this stage. The CHRO should define the company's values, promote employee engagement, and ensure alignment between the culture and business objectives.
3. HR Policies and Compliance: The CHRO should establish foundational HR policies, procedures, and compliance frameworks, ensuring adherence to labor laws and regulations.
4. Employee Onboarding and Development: Implementing effective onboarding programs and facilitating professional development opportunities can help employees integrate into the organization and enhance their skills.

Series B/C:

1. Scalable HR Processes: The CHRO should build scalable HR processes and systems to handle the growing employee base, including performance management, compensation structures, benefits administration, and employee self-service portals.
2. Employee Engagement and Retention: Creating initiatives to foster employee engagement, satisfaction, their ability to thrive, and retention becomes crucial. The CHRO should implement strategies to recognize and reward employees, promote work-life balance, and address emerging employee concerns.
3. Leadership Development: Developing leadership capabilities within the organization is essential for growth. The CHRO should implement leadership development programs and succession planning to nurture talent from within.
4. Diversity, Equity, and Inclusion (DEI): The CHRO should prioritize DEI initiatives, establishing programs to foster a diverse and inclusive workforce and creating an environment where all employees feel valued and respected.

Series D:

1. Strategic Workforce Planning: The CHRO should align HR strategies with the company's long-term goals and develop workforce plans that support growth and scalability.
2. Performance Management and Talent Development: The CHRO should implement robust performance management systems, including goal setting, feedback mechanisms, and career development opportunities, to drive high performance and retain top talent.
3. HR Analytics and Metrics: Leveraging HR analytics and metrics are essential to make data-driven decisions. The CHRO should track key HR metrics, analyze trends, and use insights to optimize HR strategies and programs.
4. Change Management: As the company undergoes rapid growth and potential organizational changes, the CHRO should possess change management expertise, facilitating smooth transitions and minimizing disruption.

The CHRO's capabilities should align with the company's growth trajectory, employee needs, and evolving HR challenges at each funding round. Ongoing evaluations of the CHRO's performance, their ability to build a high-performing and engaged workforce, and adapt HR strategies to changing circumstances can help ensure they effectively support the organization's human capital needs through each stage of growth.

Chief Technology Officer (CTO)

The CTO plays a vital role in shaping the technology strategy and overseeing technical operations. Below are critical factors to consider when assessing the CTO's capabilities during each funding round:

Series A:

1. Technical Expertise: The CTO should possess strong technical knowledge and expertise relevant to the company's industry, ensuring they can make informed decisions and provide technical guidance.
2. Technology Strategy: The CTO should develop a clear technology roadmap and strategy that is aligned with the business objectives, outlining the technology stack, architecture, and infrastructure required for the company's products or services.
3. Product Development: The CTO should lead the product development process, collaborating with cross-functional teams to ensure the timely and efficient delivery of high-quality products or services.
4. Team Building: Building a solid technical team is crucial at this stage. The CTO should recruit and manage talented engineers, fostering a culture of innovation, collaboration, and continuous learning.

Series B/C:

1. Scalability and Growth: The CTO should ensure that the technology infrastructure and systems can scale as the company grows, accommodating increased user demand, data volume, and operational complexity.
2. Innovation and Research: The CTO should stay abreast of industry trends, emerging technologies, and best practices and drive innovation within the organization to maintain a competitive edge.
3. Technical Leadership: The CTO should provide technical leadership, guiding the team in making sound architectural and technical decisions and ensuring adherence to coding standards, security protocols, and development processes.
4. Collaboration with Other Departments: The CTO should collaborate with other departments including product management and marketing, to align technology initiatives with business goals and ensure seamless integration of technology solutions.

Series D:

1. Scalable Infrastructure and Operations: The CTO should design and ensure a robust, scalable infrastructure that supports the company's ongoing growth, including cloud services, data storage, and network architecture.
2. Security and Compliance: As the company expands, the CTO should prioritize data security and compliance with relevant regulations, implementing measures to protect user data, secure systems, and ensure privacy.
3. Technology Partnerships: The CTO should evaluate and establish strategic technology partnerships, leveraging external expertise and resources to enhance the company's technical capabilities and accelerate growth.
4. Technical Vision and Roadmap: The CTO should contribute to the company's overall strategic planning by developing a transparent technical vision and roadmap, aligning technology investments with long-term business objectives.

Overall, the CTO's capabilities should align with the company's growth trajectory, technological needs, and evolving industry trends at each funding round. Regular evaluations of the CTO's performance, ability to drive innovation, scalability, technical excellence, and adaptability to changing technology landscapes can help ensure they effectively support the organization's technological requirements as it progresses through each funding stage.

Chief Product Officer (CPO)

The CPO is vital in driving product strategy, development, and innovation. Here are critical factors to consider when assessing the CPO's capabilities during each funding round:

Series A:

1. Product Strategy: The CPO should develop a clear product strategy aligned with the company's vision, market analysis, and customer needs. They should have a deep understanding of the target market and competitive landscape.
2. User Research and Validation: The CPO should champion user research and validation techniques to gain insights into customer preferences, pain points, and behaviors. This information should guide product ideation and development.
3. Agile Product Development: The CPO should establish agile product development processes, including defining requirements, prioritizing features, and collaborating with engineering and design teams to deliver high-quality products.
4. Cross-functional Collaboration: The CPO should collaborate closely with other departments including engineering, design, and marketing, to ensure alignment and effective execution of the product roadmap.

Series B/C:

1. Product Roadmap and Portfolio Management: The CPO should refine and communicate the product roadmap, ensuring it aligns with the company's business objectives and addresses market opportunities. They should prioritize product features and make data-driven decisions.
2. Competitive Analysis: The CPO should stay updated on market trends and competitors, conducting competitive analysis to identify differentiation strategies, assess market gaps, and refine the product value proposition.
3. Scalability and Performance: As the user base grows, the CPO should focus on the scalability, performance, and reliability of the product, ensuring it can handle increased usage, data volume, and customer demands.
4. Feedback and Iteration: The CPO should establish feedback loops with customers, sales teams, and support channels to gather feedback, monitor product performance, and drive iterative product enhancements.

Series D:

1. Product Growth and Monetization: The CPO should develop strategies to drive product growth, increase user adoption, and monetize the product effectively. The strategies will include introducing new pricing models, upselling features, or exploring expansion into new markets.
2. Data-Driven Decision-Making: The CPO should leverage data analytics and user insights to inform product decisions, measure key metrics, and identify areas for optimization and innovation.
3. Product Operations and Optimization: The CPO should establish structured product operations and optimization processes, focusing on metrics tracking, user experience optimization, and continuous improvement of product performance.
4. Leadership and Team Management: As the product organization grows, the CPO should provide effective leadership, mentorship, and team management to ensure high-performing, cross-functional product teams.

The CPO's capabilities should align with the company's growth trajectory, market dynamics, and evolving customer needs at each funding round. Regular evaluations of the CPO's performance, their ability to drive product strategy, deliver customer value, and adapt to changing market conditions can help ensure they effectively support the organization's product objectives as it evolves through each round of funding.

General Counsel (GC)

While the core responsibilities of a GC remain consistent, there are critical factors that evolve with the company's growth stage. Below are key considerations for assessing the GC's capabilities during each funding round:

Series A:

1. Legal Expertise: The GC should possess solid legal knowledge and expertise in corporate law, intellectual property, employment law, and contract negotiations.
2. Startup Experience: Experience in working with startups and a deep understanding of the unique legal challenges they face can be valuable. Startups often require nimble and adaptable legal guidance.
3. Compliance and Regulatory Knowledge: The GC should grasp industry-specific regulations and compliance requirements to ensure the company operates within legal boundaries.
4. Risk Assessment: Assessing legal risks and implementing risk mitigation strategies is essential during the early stages. The GC should proactively identify and manage potential legal pitfalls.

Series B/C:

1. Scale and Growth Focus: The GC should have experience with similar growth-stage companies and be adept at scaling legal operations and processes as the company expands.
2. Intellectual Property Protection: With increased product development and market presence, the GC should prioritize intellectual property protection, including patents, trademarks, and trade secrets.
3. Contracts and Partnerships: As the company establishes strategic partnerships and engages in complex business transactions, the GC should have expertise in negotiating and drafting contracts to protect the company's interests.
4. International Expansion: If the company plans to expand globally, the GC should know international laws and regulations and have experience with cross-border transactions.

Series D:

1. Leadership and Team Management: As the legal department grows, the GC should demonstrate effective leadership and the ability to manage a team of legal professionals.
2. Regulatory Compliance: With increased visibility and scrutiny, the GC should ensure the company complies with relevant laws and regulations, such as data protection, privacy, and cybersecurity.
3. Mergers and Acquisitions: The GC should be capable of handling complex M&A transactions, including due diligence, negotiation, and integration of legal matters during acquisitions or mergers.
4. Corporate Governance: As the company matures, the GC should focus on establishing robust corporate governance practices, including board governance, shareholder relations, and regulatory reporting.

The GC's capabilities should align with the company's growth, industry-specific needs, and evolving legal challenges at each funding round. Regular evaluations of the GC's performance and ongoing professional development can ensure they effectively support the organization's legal requirements as it progresses through funding rounds.

When assessing the bench strength of the ELT as the organization grows from a series A-funded tech company to a series D-funded startup, it is essential to consider each of the unique challenges of development and opportunities that each round of funding presents. Each round makes the needs more complex, and the requisite requirements change. Key factors to consider include the leader's experience, leadership style, communication skills, team dynamics, and the ability to adapt to changing market conditions and take advantage of new opportunities. While the initial ELT might have the capacity to grow as the organization evolves, the CEO must consider the team's needed competencies before a funding round. It is necessary to determine if the current team is the team needed for each subsequent round of funding. If so, continued personal growth and learning are required; if not, the CEO must consider options (targeted development or replacement) to close the gap. With the right ELT, your company can continue to innovate and grow.