Ready… aim… you’re fired!
In the first twenty years of my career, I worked for five software startups. In three of those five, the investors (in their role as board members) asked the co-founder/CEO to step down from that job.
All three of those startups were funded by VCs, funded with millions of dollars around high growth plans and huge expectations. In all three cases, some milestones were not met, and the board decided that it was better for the company to bring in an outsider to run the company rather than leave it in the hands of the co-founder.
This is not an uncommon story amongst venture-backed startups and another of the realities of funding.
Raising money transfers some control of your company to others, in exchange for a chance to create something faster and larger than you could have created without the funding. Taking investors’ money puts the investors’ needs ahead of yours. They need a return on investment, and, if you fail to deliver or even fail to look like you are delivering, they’ll find someone who can.
As soon as you raise money from outsiders, the clock begins to tick, with worries about runway (defined back in Chapter 1) and worries about what happens if the milestones are not met before the end of that runway, plus more worries about what happens if they are met.
Even upon success, at some point in the growth of a startup, the reality is that the company may grow to a scale beyond what you can comfortably manage. It is not uncommon for founders to choose by themselves to step aside, firing themselves from the CEO role and hiring their own outsiders to help continue the growth of their company. There is nothing wrong with stepping aside when the time is right.