start-up, due diligence

Traditional Due Diligence is Not Enough: What Chiefs of Staff are Bringing to Startups and their Funders


The proliferation of new inventions and applications in tech, finance, and healthcare brings with it a diversity and unconventionality in leadership. That diversity is a gift: youth will see people who look like them leading companies, the wealth of knowledge in fin-tech and business is made richer, and antiquated norms are broken, allowing for more work-life balance and progressive company values.

The new generations of leadership and their progressive qualities can also be a curveball. The concept of being polished and predictable is long over for today’s class of genius-leaders. Mark Zuckerberg brought the t-shirt and hoodie to the boardroom table. Elizabeth Holmes proved that social ease and charm were not a prerequisite for securing funding. Most recently, Sam Bankman-Fried has disproved the notion that expertise must be demonstrated before one can be catapulted to the focus of investors. And even before Zuckerberg, Holmes, and Bankman-Fried, Jobs, Gates, and Wozniak were similarly defying expectations in their age, the way they dressed, and made decisions.

To put it simply, the trailblazers of the most exciting initiatives are often young, quirky, have distinct personalities, and lack formal business acumen. That combination can be challenging for such leaders’ employees, partners, and investors who are accustomed to conventional business settings and formalities. As investors continue the search for their next fin-tech start-up success stories, they are working more and more frequently with this new style of leadership and the t-shirts and youthful confidence that accompany it.

In the case of Apple, Microsoft, Uber, and many other companies, investing in young, genius-led start-ups can prove to be hugely successful. However, as we’ve seen in recent news regarding Theranos and FTX, those investments can also end disastrously. As members of Gen Z continue to age into the professional world and create new technologies and concepts that investors shop, it will become increasingly important to understand the true nature of these companies, their leadership, and the potential risks and rewards within them.

While completing due diligence research into a company before making an investment is not a new concept, the leaders at the helm of those companies are in fact new and possess their own leadership style. It is equally important to look at financials and forecasts as it is to assess a leader’s soft skills and decision-making qualities. It is our belief that Chiefs of Staff at companies of all risk levels are the superpower to gaining thorough insight into a company before making an investment.

Even in the most traditional executive offices, Chiefs of Staff offer invaluable assistance in actualizing lofty plans, demystifying tricky relationships, and protecting the time and resources of who they serve. Through research and a combined 34 years of experience, Prime Chief of Staff has identified six primary functions of the Chief of Staff role:

Through these six functions, Chiefs of Staff ensure that organizations meet objectives, keep their people happy, and don’t get derailed when uncertainty and inexperience are rampant.

When facing the opportunity of pivotal funding, Chiefs of Staff can provide reassurance and calm to both sides of table. With the trust of their principal, Chiefs can use their traditional business acumen to make presentations and orient investors to the company. When communication becomes difficult, Chiefs of Staff can translate whiz-kid startup speak to business jargon. When lofty ideas begin to inflate beyond means, Chiefs can couple their executive’s ambition with practicality as to not startle potential funders. If a company’s leader is busy brainstorming or networking elsewhere, Chiefs of Staff have the access, insight, and confidence to be a proxy for their principal, strengthening relationships and furthering deals on their own.

Serving as a Chief of Staff allows for the distinct experience and perspective needed to collect superb information and complete thorough due diligence. With Prime’s proprietary assessment and diagnostic tools, we are in the unique and fortunate position of advising both investors and companies. Prime and its advisors appreciate the gumption of young genius-leaders, and Prime also has the professional acumen to expound the goals, projections, and histories of start-ups and young companies to investors. 

Strong and lucrative partnerships shouldn’t be built on vibes and capsule wardrobes alone. When witnessing the fallout of Elon Musk’s purchasing of Twitter and Sam Bankman-Fried’s FTX, it’s hard not to wonder what kind of due diligence was completed. Were investors charmed by chill attitudes and youthful confidence? Was research focused on financials and projections in addition to the leadership qualities present within the company? Or, were there gaps in the skillsets of the company’s leaders? Could a crisis communications team have assisted? Would additional coaching for the leader have eased their insecurities around decision-making?

Prime Chief of Staff has served over 150 clients in sourcing talent, advising executives, and assessing readiness for change. As more and more fledgling startups capture investors’ attention, the need for due diligence will only increase, and recent disasters in the start-up world are creating jitters throughout the venture capital sector. Prime will continue to be the trusted advisor for both investors and leaders at all stages of deal-making.

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