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Can't find a CEO? Rent one
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October 17, 2000: 2:54 p.m. ET
Silicon Valley temp agency provides interim chief executive officers
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NEW YORK (CNNfn) - Finding the right executive to lead any company is a critical decision that can take a long time. But in the highly competitive, ultrafast-paced high-tech startup environment, many young companies cannot afford to waste months looking for the person whose leadership may determine the fate of the company.
Consider getting a temporary chief, one to fill the void until a full-time CEO can be found. iCEO, whose name is short for interim chief executive officer, supplies just that.
 Started just 18 months ago, the Woodside, Calif.-based iCEO maintains a small, very select stable of experienced high-tech chiefs they lease out to startup companies on a temporary basis. So far, iCEO has recruited 25 temporary CEOs for its stable.
iCEO is the brainchild of entrepreneur Ken Coleman and David Powell. Coleman was the founder of a medical software company, de Medici Systems, which he sold in 1995 for an undisclosed amount. Since then, he put his fortune to work as an angel investor in Silicon Valley. Powell was the founder of David Powell Inc., an executive search firm that he has run for the past 25 years.
In an interview on CNNfn's Market Call, Coleman estimated there are up to 600 companies in the San Francisco Bay Area who are searching for CEOs, many of them small, venture-backed startup companies who might benefit from the help of an iCEO. These companies, he said, exist in an "iCEO zone."
"What that means is the founder and some engineers are there, they've got venture money, but they really can't move it to the next level and they can't afford the six-to-nine months that might be involved in doing a permanent CEO search," said Coleman. "This way they can get a very experienced executive, supremely experienced, to run the company or help mentor the founder to the next level."
A not-so-typical temp agency
The firm's model is not a new one. It operates like other temporary staffing agencies, but iCEO's part-timers are rigorously screened for their ability to  lead a company, not for their typing skills. iCEO temps are versed in the intricacies of creating marketing plans, creating long-term financial projections, and negotiating joint venture agreements.
And they also get paid a lot more than most temps - up to $3,000 a day in cash and stock options, depending on the individual and the job at hand. Half the equity each CEO earns will go into a pool, which will be shared among the company's principals.
In spite of the hefty price tag, Coleman said startups that need the help will be willing to pay.
"I think when you look at the big picture, the increase in valuation they might get in their next round of financing, this is not really a concern," he said.
Coleman said working as an iCEO temp appeals to many former CEOs who have expertise to share and want to stay involved, but don't necessarily want to make another full time, long-term commitment to a young company that demands all of their attention. (116K WAV) (116K AIF)
 Coleman expects the temps will take full-time CEO positions in about 25 percent of the cases. In those situations, iCEO, like any other executive search firm, will take a percentage of their first year's salary.
Coleman said iCEO's services also take some of the pressure off the venture capitalists, to which it often falls to find top managers for their portfolio companies. The company is already working with top-shelf venture capital firms, including Kleiner Perkins Caulfield & Byers, Sequoia Capital, and the Mayfield Fund, to get interim CEOs for the most promising of their fledgling companies. 
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