Company founders letting go

by John G. Agno

Published on this site: August 17th, 2005 - See more articles from this month

It is always a challenge for an entrepreneur to step aside so that professional managers can be hired to take the venture to the next level.

In high-tech ventures where venture capital money is required, the founder-CEO quickly discovers the cost of external financing includes being replaced by a "professional" CEO. Here in the fly-over zone (Ann Arbor, MI), when the high-tech venture looks like it will be successful, the East or West Coast venture capitalists force the selection of an experienced CEO from their local pool of leadership talent and move the venture to one of the two coasts.

To reduce the chance of disruption within the company culture, due to a founder-CEO loss, the board may attempt to invent an appropriate non-CEO position. However, the replaced entrepreneurial founder usually stays here in the fly-over zone and becomes involved in another start-up venture partially financed with his or her new pile of cash.

Many founder-CEO's decide to die in office because of being emotionally attached to the company they started and the fun they have being in control. This is true even though the founder agrees that s/he doesn't have the leadership skills required for the CEO job. That is why the death of a founder can be the best thing that happens to many a company.

For more on the Achilles' heel of small business owners, go to:
http://home.att.net/~coachthee/Archives/smallbusiness.htm

John G. Agno, certified executive & business coach Signature, Inc., PO Box 2086, Ann Arbor, MI 48106 Telephone: 734.426.2000 (US Eastern Time Zone) Email: [email protected]