An entrepreneur’s decision to step down is a hard and humbling one. After all, who wants to face up to her limitations? But that day almost inevitably comes. Some business owners find themselves unable to drive their company to the next level. Others discover that they simply don’t enjoy the complexities of running a larger company.
In some cases the decision to change leadership is forced on an entrepreneur. Some two-thirds of venture-backed startups find it necessary to replace founding CEOs with more seasoned outside management, says Pascal Levensohn, founder of Levensohn Venture Partners (levp.com) in San Francisco, which has backed several successful tech startups, including BigFix, Rapt and Veraz Networks (two of the three are now run by a different CEO). Although that kind of high turnover is less likely at companies not backed by VCs, Levensohn argues that the factors that necessitate a change in leadership affect all companies.