The entrepreneur and the corporate executive. It is often thought they inhabit two opposing ends of the professional spectrum – the visionary and the executor, risk-taker and deal-maker.
True, they bring contrasting skillsets to the boardroom, but what of their values and motivations? Are they polarised? Indeed, is it naive even to think of these two labels as being mutually exclusive?
In the world of corporate venturing, the answers to such questions are especially important. After all, this is a domain where individuals with extremely diverse resumés have to work together, closely and effectively.
More often than not, the formation of a successful and harmonious leadership team is hinged upon knowing what type of executive is needed and how to attract them. Understanding is key. So, at Intramezzo, we have taken a closer look at today’s business leaders and conducted a study (see footnote) to find the truth beyond the stereotypes.
Where do entrepreneurs come from?
There is a very public face to entrepreneurialism. It is Alan Sugar. Mark Zuckerberg. Richard Branson. Their self-made success stories are well known the world over – as is the fact that each founded their defining venture at a young age.
It is often assumed, therefore, that most who tread the entrepreneurial path choose their route at an early stage in their careers. But this isn’t necessarily the case. In fact, our study showed that more than 62% of those currently involved in an investment-backed, start-up venture had previously spent the majority of their careers working within a corporate environment.
What compels someone to make that sort of career change?
When asked what factor had most influenced their pro- fessional choices to date, the respondents who had made the transition from the corporate world into an early stage business stated overwhelmingly that the ‘desire to build something new’ had been their biggest driving force.
Conversely, the same question posed to individuals cur- rently working for a plc or a private limited company (with no external investors) revealed that ‘career development’ had been the most significant influence on their profes- sional trajectory.
At face value, these may seem like two distinct motiva- tions – but are they really so different? Both factors rep- resent forms of achievement and whilst career develop- ment is perhaps more explicitly about personal growth, the desire to build something new is not an entirely external agenda.
So, we know that many of today’s entrepreneurs have, at
some stage, made the move from a high-flying corporate career – but this is not without its obstacles. One of the more obvious stumbling blocks is the start-up’s ability to offer a suitably attractive compensation package.
A world-class blue-chip executive will, most likely, be commanding a significant basic salary – the like of which an early stage venture would struggle to compete with. It is worth noting, therefore, that our survey revealed that 83% of business leaders would consider a reduced remunera- tion package if there was an opportunity to participate in equity.
This is interesting as it shows that even a start-up venture can fish in a bigger pool providing their line is baited with share options and an exciting exit strategy.
Furthermore, straying far from the notion that all cor- porate animals are fundamentally risk averse, our busi- ness leaders study went on to reveal that 73% would be prepared to take mitigated risks for a venture they truly believed in.
What does this mean for corporate venturing?
Assembling the right board for a new venture often requires a fine balancing of skills and experience. Knowing “who” is required is half the battle; but being armed with an understanding of how to attract and secure that individual is crucial to making a successful appointment.
There is no denying that entrepreneurs and corporate executives can contribute in sometimes vastly different ways but, as these findings demonstrate, even the smallest and youngest of businesses can afford to keep their minds – and their options – open.
The Intramezzo Survey – carried out earlier this year – had more than 260 respondents, of which 36% were from an angel, venture capital or private equity-backed business, 44% described their company ownership as private limited with no external investors; and 13% were currently employed by a plc. For more information please contact Emma Brown on 0117 9090916 or visit the website at www.intramezzo.co.uk