Dear SaaStr: Will the Failure on Bench Make VCs Reconsidering Replacing Founders as CEOs?
I don’t think so.
I don’t know all the details, but what I can tell you is 95%+ of the VCs I know and work with do not want to replace the founder CEO ever. Only as a very last resort.
Yes, in the old days of tech, it was more common. But it all began to change with Facebook, and just accelerated since. Almost all VCs want the founders to go the distance, if they are able and want to.
In fact, in 90% of SaaS IPOs, the founder CEO is still the CEO at IPO:
Of all the investments I’ve made since 2013, in only 1 have the VCs “replaced” the CEO. And in that case, one, I opposed it (I didn’t have a vote). And two, it happened because the founders raised $100m+ and began to run out of money. That’s when it’s most common today. When a start-up raises a ton of capital, misses all the milestones, and is in danger of running out.
Still, bear in mind, the more you raise in venture capital, the more the stakes go up. Raising $100m+ isn’t a game, and it can lead to conflicts where there isn’t alignment (or again, when the cash begins to run out):
More here:
