student
Founder-CEO Succession
Summary
The Wily Technology case addresses a critical stage in a new venture's development, when the founder who has been leading the company is being replaced by a professional CEO. It examines the events, conditions, and founder characteristics that precipitate such a change, and the issue of whether the founder should remain in the company after the succession event and in what role.
Reference http://www.stanford.edu/class/e140/e140a/content/wily.html The case study: When founders step aside
By Noam Wasserman
The story. In 2001, Lew Cirne, founder and chief executive of California-based Wily Technology, was on the brink of finalising Wily’s third round of financing. The software company had grown to 50 tightknit employees, reached or passed all milestones, convinced important customers to buy Wily’s flagship product, and raised two rounds of financing from top venture capitalists.
The new funding would enable the company to add key members to the team and roll out an advanced version of its core product.
The challenge. Mr Cirne was stunned when his venture capital backers then stipulated that he must move to chief technology officer to let someone else – not yet chosen – replace him as CEO. “Where have I messed up?” he remembers thinking. How could his main backer, until now so supportive, want him replaced?
Not only was Wily a success but Mr Cirne was emotionally attached to the start-up he referred to as his “baby.” Why should he yield to the VC-influenced board’s demand that he step down?
Behind the dilemma.
Mr Cirne was at a classic “rich v king” inflection point: he could either hand the reins to a successor with the skills to build a more valuable company or fight to remain CEO.
Mr Cirne agreed to the board’s terms but only if he could veto candidates he thought were “a bad cultural fit”, which allowed him to feel he retained an element of control.
His
Summary
The Wily Technology case addresses a critical stage in a new venture's development, when the founder who has been leading the company is being replaced by a professional CEO. It examines the events, conditions, and founder characteristics that precipitate such a change, and the issue of whether the founder should remain in the company after the succession event and in what role.
Reference http://www.stanford.edu/class/e140/e140a/content/wily.html The case study: When founders step aside
By Noam Wasserman
The story. In 2001, Lew Cirne, founder and chief executive of California-based Wily Technology, was on the brink of finalising Wily’s third round of financing. The software company had grown to 50 tightknit employees, reached or passed all milestones, convinced important customers to buy Wily’s flagship product, and raised two rounds of financing from top venture capitalists.
The new funding would enable the company to add key members to the team and roll out an advanced version of its core product.
The challenge. Mr Cirne was stunned when his venture capital backers then stipulated that he must move to chief technology officer to let someone else – not yet chosen – replace him as CEO. “Where have I messed up?” he remembers thinking. How could his main backer, until now so supportive, want him replaced?
Not only was Wily a success but Mr Cirne was emotionally attached to the start-up he referred to as his “baby.” Why should he yield to the VC-influenced board’s demand that he step down?
Behind the dilemma.
Mr Cirne was at a classic “rich v king” inflection point: he could either hand the reins to a successor with the skills to build a more valuable company or fight to remain CEO.
Mr Cirne agreed to the board’s terms but only if he could veto candidates he thought were “a bad cultural fit”, which allowed him to feel he retained an element of control.
His