Technology & SaaS 13.01.20

Investors love COOs and here’s why…

​Ask the average person on the street what a CEO is, and they’ll be able tell you. They may even know about CMOs and possibly CTOs… The position of COO is a lesser-known member of the C-suite however and yet, heading into 2020 one of the most valuable; especially in the eyes of an investor... Zach is here to tell you why.

Ask the average person on the street what a CEO is, and they’ll be able tell you. They may even know about CMOs and possibly CTOs… The position of COO is a lesser-known member of the C-suite however and yet, heading into 2020 one of the most valuable; especially in the eyes of an investor.

So, what is it about the Chief Operating Officer that has investors adjusting their cravats and reaching for chequebooks? There are a wide range of variables that an investor will look for when choosing to fund a start-up, but ultimately it comes down to risk vs return. The likelihood of making back their investment plus a healthy profit.

A plucky COO attempting to secure investment…

The foundation of this is of course the product. A good product alone does not guarantee success, however. There are plenty of great products lost to the annals of time due to poor execution, bad timing and sub-standard strategy. It’s here that we begin to see the potential of a COO: they act as the glue that holds the startup together. Their net is cast wide, as ‘operations’ can (and often does) encompass anything and everything needed.

In the early days, a COO can plug gaps where necessary. If you’re short in the marketing department, need someone to head up finances while waiting for that killer CFO hire or just need an adviser to work on strategy with the CEO; a good COO can do it all. Having this flexibility and competency takes the strain away from an often-overworked founder. Investors know this and value this greatly. Having a founder or CEO that has the freedom to work on the business, rather than in the business, is an attractive prospect.

COOs that have a great deal of experience can also be drafted in to mentor an inexperienced CEO or founder. As anyone in the industry will tell you, creating a great product does not necessarily mean you’re cut out to lead a business right away. There is a learning curve for new CEOs which, whilst totally understandable, is not something investors want to gamble on. An experienced hand to guide the budding leader in this instance would allay the fears of an investor, bringing them to the table for even the greenest of founders.

How have we blown our entire budget on rusks for the second year running??

Investors look past the startup and into the scaleup phase. Here again, the experience of a COO is a boon. A COO that has been through the process before will know how to implement system and processes to ease the scaleup transition as an organisation grows. Circumnavigating this tricky period is invaluable to startup and investor alike. There is no greater stress in a startup than the scramble to restructure your entire internal framework to support growth at the last minute. It is, however, something that happens every single day in startups across all industries. Having the guiding hand of a COO can avoid this stress altogether, freeing up time to do whatever it is your company does best.

With this wealth of experience comes confidence, with confidence comes leadership. A CEO can’t be around 24/7 to lead and inspire their staff, so having a COO to rely on in this situation is imperative. Your COO can lead the rest of the C-suite, managers and staff alike. Their competence commands respect – so use it!

Get in, team, we’re going to make our millions…

This brings us full circle, to the earlier comment that COOs are the glue that hold startups together. Investors need to feel confident in their investment and any organisation with the foresight to hire a quality COO stands themselves in strong stead to inspire such confidence.

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