As ventures grow and develop, the challenges they present change. Often change is sudden rather than gradual. These sudden changes require a shift in the way the company and/or the top managers do business. These are times when coaching can be most valuable.

The one-room shop. In a one-room company, even if the room is a 60-person room, communication is informal and universal. Roles can be amorphous, with anyone pitching in to help with whatever needs doing.

The first hire. With your first employee, you become a manager. Decisions must now be made taking the employee into account. Confidentiality and access to information get raised as issues. Delegation, clear communication, evaluating, and motivating your employee become necessary skills.

The first firing. It happens. And it isn’t pleasant. It also sends a strong message to everyone who is left. With the first firing, everyone will realize—really realize—that you are the boss. Handling the dismissal, handling your reactions to the dismissal, and managing perceptions of the remaining employees become the challenges.

The first customer. The market is now aware of you. You have your first chance to collect real customer feedback. The length and cost of the sales cycle becomes apparent. Your cash flow requirements become more knowable, and the strategy/tactics need to respond. And for the first time, you have to deliver on your promises.

The first lost sale. You have to grapple with whether your product should be changed to meet the market, or whether you just had a bad fit between your product and that one prospect. You may find yourself dealing with how to react appropriately, and how not to take this personally.

The two-room shop. Communication that happened through proximity and casual conversation suddenly stops happening. For the first time, you must explicitly identify communication paths and determine how they will operate. Things that have always worked in the past may not work any longer. You’ll grapple with identifying solutions and separating accountability of the system from accountability of the people.

The first fight. There comes a time when, despite the best of intentions, the founders disagree. Really disagree. This is a time to examine the relationship, and make sure you have a structure for working through conflict.

Money runs out. When the money almost runs out, the venture capitalists and other funding sources may hold your feet to the fire, just because they can. You will encounter issues around negotiating, personal balance, and separating your identity from the business to create as objective an action plan as possible.

Cash flow positive. Survival no longer depends on every cash decision! You can invest surplus in longer term projects. Cultures which have been compromised to save money now have the option of improving their business practices. “Spend as little as possible” was your old imperative. Now, you need a way to decide how to use the surplus cash. Culturally, you have an opportunity to increase integrity in how business is conducted.

Once you have cash, how you pick and choose opportunities to pursue becomes less dependent on pleasing outsiders. You are self-funding and have the option of slowing growth to avoid the need for new outside capital.

The Chaos Point. When the company gets too big for one person to keep on top of everything, chaos can ensue. Organization structure becomes necessary, and managers must shift from getting things done to creating an organization in which others can get things done. Delegation, willingness to give up control, learning to guide and create culture, setting compensation systems, building meaningful feedback systems, and hiring all become critical capabilities.

Outside money. With outside money, you are truly accountable to others. Board meetings take preparation, and the outside money may bring restrictions and new constraints. The personal challenges include balancing your own vision and plans with those of the outsiders. Changes in strategic direction may become dependent on outside approval.

The second Chaos Point. Somewhere between 70 and 100 employees, real business systems become necessary. The numbers just get too big: too many job applicants in the pipeline, too many projects to track, too many purchasing requests, etc. Few employees have the business process analysis skills to put systems in place. Those few who have the skills become overwhelmed as everything important is given to them: “Just this once? You’re the only person who gets things done around here.” Building business systems and training underlings in building systems becomes imperative.

Multiple product lines. Once you move to multiple product lines, issues start to arise around your company’s identity: what do you stand for? Who do you serve? If one line is more profitable than the other, are the managers or salespeople paid differently? Are you a single brand? Multiple brands? Issues of focus, resource allocation, balancing the culture, and accountability become important.

Acquisition. When you’re acquired, the challenges revolve around keeping good people, merging your identity, culture, and product lines with your new parent, and defining roles and career paths that work in the new entity.

IPO: the finish line? As rumors of an IPO begin to spread, comparisons start. Who has how much? Whose options are worth what? Will we be as rich as our friends at e-commerce.com? Suddenly, you are legally required to keep a lot confidential from your employees. Issues of fairness, ethics, trust, and reporting requirements arise within the company. The issues are huge: six-figure tax planning, psychological preparations to become rich (it’s not as easy a transition as most people think), learning to make decisions from a large asset base, examining how priorities change, understanding how to manage friends and family, dealing with the public speaking and stress of a road show, and keeping the company together while all this is happening.

Life goes on…publicly. Whoops. The company iPod and you just realized an IPO is just the beginning, not the end. Early employees, who hold much of the company’s intelligence in their heads, become rich enough to leave. The motivation of “someday we’ll be public” is no longer available. Outside pressure to “manage for quarterly results” begins. Preserving the knowledge and skill base of the company while achieving the forecast numbers become two of the biggest challenges. On a personal level, growth opportunities include learning to manage increased analyst scrutiny and formulating your next set of goals and aspirations.

An executive coach can help during many of the “moments of truth.” When growth is happening so quickly, employees (including founders!) may not have the time to grow into their roles; their roles are changing too fast, and they’re too busy building the business. When roles shift, or unquestioned assumptions and rules suddenly stop working, an executive or advisor can help you through what’s needed structurally, motivationally, or personally-to bring things back on track.

Venture Moments of Truth

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