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7 Leadership Qualities for a Successful Startup CEO


Some leadership qualities for a startup CEO come naturally (traits like optimism, persistence, the ability to keep going after a setback), while other skills grow out of experience and earned wisdom. One thing's for sure: to succeed in the cut-throat world of startups, you need a combination of essential leadership qualities which serve as a foundation for all the other traits needed to get the new business up and running.

Here are seven core skills that a startup CEO either comes by naturally or has the capacity to learn:


It's your idea, but in order to move to the next level, your idea must blossom into a full-blown vision. Once you set the venture in motion, where do you want to go? How do you plan to get there? What's the unique differentiator that sets your idea apart from everyone else in the marketplace? A successful entrepreneur can not only answer these questions, but can put together a compelling and comprehensive business plan that gets investors and prospective clients excited as well.


At the outset at least, startup CEOs will likely do most of the hiring. With a vision in place, the goal is finding and recruiting people who possess the right level of experience and ambition to transform that vision into reality. A CEO's ability to inspire others and get them on board is critical here.


After a startup CEO has gathered together a team with the potential for excellence, the next thing he or she must do is infuse that team with focus. A team is necessarily composed of individuals with different interests, skills and objectives. Somehow, the CEO must harness those disparate qualities into one tight-knit, high-performing team.

"The CEO is not only the communicator of the vision, the CEO is the consensus builder for that vision," notes George Deeb, Managing Partner at Red Rocket Ventures. "You will never be successful if your team does not buy into the vision, or if they feel their good ideas for improving the vision are not being listened to. Then once everyone is firmly on board, keep them clearly focused on the goal."


A relaxed, laid-back personality is, generally speaking, not a desirable element in a startup CEO's DNA. Instead, such individuals must be driven by their vision to inspire others at every turn—not just the team of employees, but prospective clients and investors as well. Many entrepreneurs see themselves as Chief Evangelists who are always "on." They know that, among key leadership qualities, it's vital to be able to excite others and build on that excitement to move forward.

Pay Attention to the Industry

No great startup idea succeeds in a vacuum. An effective business leader understands the importance of monitoring key industry trends—and moves made by existing and potential competitors—that can affect the success of his or her venture. A corresponding trait is the ability to shift direction and make changes when external circumstances require flexibility. Without that, it's impossible to stay ahead of the competition.

Maintain Cash Flow

There's nothing more harmful to a fledgling business than running out of cash. A potentially successful startup must have a reserve of capital, both before launch and immediately afterwards. It's up to the CEO to maintain liquidity. This ability either grows out of past experience or from the stark realization that it's a skill the business leader must have.

"Many first time CEOs do not have an appreciation of this problem because they have no prior experience," says Jeff Thermond, Venture Partner at XSeed Capital. "Not jumping on this skill gap right away will likely lead to bad news in the form of needing to raise additional equity before you've proven your company. That is never pleasant. It's also avoidable if the startup CEO makes this an early, important priority."

Have Fun

Effective startup CEOs are so energized by their vision—and so passionate about making that vision come true—that they're just fun to be around. They understand that success depends on hard work and ever-accumulating knowledge, but they also get that if they're not having fun in the process, no one around them will either. If that's the case, the great idea may wither and die before ever coming to fruition.

It's unlikely any one startup CEO will come to the table with all of these leadership qualities in place. The good news is, with the right passion and drive, an entrepreneur can acquire what he or she needs to make it work.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.