Founder’s syndrome is one of the sadder afflictions of startups. Many startups begin with visionary founders who pour their heart, soul, and countless hours into building their company from the ground up, only to drag it down when the company grows to exceed the founder’s expertise and capabilities. Sometimes the founder is self aware enough to understand  what’s happening and seek a solution themselves. If this is not happening, it is the responsibility of the investors and/or the board of directors to step in and force a solution. And there are several good solutions to choose from, depending on the specific situation.

Recognizing Founder’s Syndrome

Here are some common signs of Founder’s Syndrome:

• Resistance to Change: The founder may resist new ideas or changes that deviate from the original vision, even when such changes are necessary for growth or adaptation. 
• Centralization of Decision-Making: Founders often retain control over most or all decision-making processes, limiting the company’s ability to make quick or decentralized decisions.
• Difficulty in Delegating and micromanagement: There can be a reluctance or inability to delegate responsibilities to other team members, leading to bottlenecks and inefficiencies.
• Conflict with Board Members or Investors: As a startup grows, conflicts may arise between the founder and board members or investors, especially if they have different visions for the company’s future.
• Ignoring Feedback: A tendency to dismiss or ignore feedback from employees, customers, investors, or industry experts, adhering strictly to their own ideas and opinions.
• Overemphasis on the Founder: The organization’s identity and brand may become too closely tied to the founder, making it difficult to separate the two for the health and growth of the business.
• Neglect of Organizational Structure: In some cases, the founder may neglect the development of a sustainable organizational structure, which is crucial for scalability.

The role of the investors/Board of Directors

“Sometimes, the founder realizes that there is an issue and tries to find a solution. This is the best case scenario. However, when the founder is oblivious to their own flaws, the situation becomes more complicated. 

In a public company, the board has the authority to supervise, appoint, or dismiss the CEO. In a private company, and startups are private, this is not so straightforward. There may not be a board at all. Even if there is a board, the founder may have the majority of the shares and the chairmanship of the board.

In the case the board or the investors have a lot of voting power, it is their responsibility to identify the problem and seek a solution.

Possible Solutions

• Role Realignment – Moving the founder to a different role, such as CTO or Chief Scientist and hiring an experienced CEO. This has the benefit of allowing founders to focus on their strengths and passions.But it only works if the new CEO and the founder work well together and the CEO does not feel threatened by the founder. 

• Transition the founder to New Ventures. Encouraging founders who excel in the startup phase to move to new projects while retaining their share and giving them a position on the board.This works really well when it comes from the founder. 

• Executive Coaching – Working with an executive coach to enhance leadership skills. This solutio is ideal when the founder has the leadership potential but lacks the experience. Of course it is important the founder is open to feedback and it willing to work hard to improve themselves.

Smooth Transition

Regardless of the solution, it is important that the board and new managementl treat the founder with the respect they deserve, giving them credit for what they have accomplished. They may not be perfect  but they created the company  from zero and brought to where it is today. ”