A blog reader who I know and have worked with in the past asked me the following question:

I was interested in your thoughts on when entrepreneurs realize they need experienced help and have taken the company as far as they can, when they let go, when they stay too long and the real smart ones that know when to bring someone like me in early and work with me instead of fighting against me.

This friend has been the number two guy in several companies.  In each case, he was brought in by the entrepreneur as the CFO or the COO.  In the situations I’m aware of, he was initially welcomed by the entrepreneur (who – in each case – was the CEO and had an autocratic style), but – after a while, started to have real difficulty working with the entrepreneur, especially as the company outgrew the entrepreneur’s experience base.

As I pondered this question, which would require an entire book to really address it, I realized there was a parallel issue in all the situations I was aware of.  My friend is an extremely capable medium stage executive.  He’s not a raw startup guy, but he knows what to do from 50 to 1,000 people.  In each case that I’m aware of, the entrepreneur “brought him in” to help “get the company to the next level” (where have you heard that before.)  However, the entrepreneur / CEO didn’t really cede control and – when my friend started to put his mark on the company, a very predictable friction occurred.

While I think this kind of relationship is possible, it’s critical that the entrepreneur and the new executive agree on roles and rules of engagement up front.  I think the biggest problem is that during the recruiting process, both sides are selling the other side on their desire to work together and their ultimately flexibility.  Since the entrepreneur is looking to hire and the executive is looking for a job, there’s a fundamental conflict in their motivations and the honest, difficult, confrontational stuff doesn’t come out – until later.

My simple advice to my friend – once you get past the “selling part” of the process and have a real offer on the table from the entrepreneur, go out to dinner (or better yet – get on a plane and go somewhere together for the weekend) and have the real conversation about what life is going to be like.  See if you can get the issues out on the table before you accept the job.  If you can, listen carefully, engage, and see where you go.  If you can’t, you just learned something huge.

Predictably, the same information applies when an entrepreneur is considering a new investor – VC or otherwise.