- Short Description:
- The conventional wisdom used to be a founder should make way for a professional CEO once the company has achieved product-market fit. While less in favor, when a founder does not have or build the skills, relationships, and habits to run a company, they can be replaced. Some investors and some founders prefer to bring in professional management to be CEO so that the founder can focus on other parts of the business or move on to other pursuits. The new CEO is expected to professionalize and scale the company.
- Benefits:
- Right Person for Right Stage: Particularly in highly technical fields at the edge of science and engineering, the model can be a focus on R&D. If the market is believed to be strong if the product can be built, a highly technical founder without experience or even interest business can lead a team through the product development process.
- Accountability: if founders know that they can be replaced, they may have the incentive to behave better and incremental focus on results.
- Cited: Google,
- Trade-offs:
- See Back the Founder for benefits of Backing Founder
- The expectation of being replaced can steer companies away from VCs in general or from some funds in particular.
