A change at the top is often required to realize growth objectives in a private equity-backed, founder-led business. After investors help the founder craft a graceful exit from day-to-day management, they must usher in a new CEO thoughtfully. Successfully supporting that transition, from evaluating new talent through the first 100 days, is at the core of Ampersand's expertise.
To augment our experience we interviewed 20+ PE investment professionals and CEOs, all with direct experience with founder-led companies. Here we offer best practices to position an incoming CEO for success.
CEOs who succeed in taking the reins after a founder exits share a recognizable profile.
CEOs who excel following a founder's departure bring their own proven playbook, but don't come out of the gate with guns blazing. They show public appreciation for the founder's accomplishments, immediately and often. Likewise, they fervently pursue growth, but at a pace that doesn't cause the organization to burst at the seams. Success in high-growth contexts and previous experience professionalizing an organization are strong signals.
The most effective founder-CEO successors wield a healthy mix of self-confidence and patience. They possess a thick skin and resist unproductive power struggles with founders and their loyal fan base. Instead they leverage their experience and a healthy dose of emotional intelligence to connect with the organization and win people over. They keep their egos in check and their emotions at bay, so team members can honor the exiting founder while working toward new CEO-led initiatives.
Selection is only half the job. What investors do in the weeks around the handoff determines whether the new leader gains traction or spends a year recovering from a bad start.