- Short Description:
- The private belief and/or the public statement that the VC firm is supportive of the founder being CEO through all stages of the business. A public statement acts as a pre-commitment to not replace founders with professional CEOs as the company grows. Cited as examples of successful companies built by founding CEOs: Oracle, Microsoft, Salesforce, HP, Dell, Facebook, Amazon, Adobe, Apple, Tesla, Intuit, Box, Dropbox, Airbnb, and Stripe. Contrast with Hire Professional Management.
- Benefits:
- For founders who have a choice in which VC firm to work with, feeling confident they are unlikely to be fired can be an attraction.
- Supporters of this approach argue that the best and largest companies in (tech?) have been built by founder/CEOs. Even if you have fewer middling outcome companies that new management would have saved, you risk missing out on the power-law truly amazing outcomes. (Cited: Oracle, Microsoft, Salesforce, HP, Dell, Facebook, Amazon, Adobe, Apple, Tesla, Intuit, Box, Dropbox, Airbnb, Stripe)
- Trade-offs:
- There may be situations where replacing a founder makes sense and you may not do it for reputational reasons having committed to this strategy.
- Life science companies have often followed a different pattern and are more likely to bring in professional management. Some believe that the founder running true deep science R&D phase takes different skills than commercialization.
- Examples:
- A16z and Founders Fund have been very public about this The private belief and/or the public statement that the VC firm is supportive of the founder being CEO through all stages of the business.
Portfolio Management: Back the Founder
