The Types of CEO End-States
Ben Carcio
When discussing the journey of a founding CEO, navigating the end state of a business is often complex and varied. While each founder’s experience is unique, there are a few common paths that many follow when reaching this stage.
The first, and perhaps most common, is shutting down the business. After dedicating time and effort, validating the idea with customers, and giving it your all, the founding CEO may find they no longer have the conviction to move forward. At this point, they make the difficult decision to exit and start something new. This scenario is especially common in earlier-stage companies or ventures that haven’t scaled significantly.
However, for those companies that do reach a certain scale, shutting down is no longer an option. Instead, the next logical step is a CEO transition. In this scenario, the board is typically involved in facilitating the process of bringing on a new CEO to lead the company forward. Sometimes this transition can be bumpy, with the founder feeling pushed out. In other cases, like my own experience, it’s a more collaborative process where the board and founder work together to find the right successor to drive the company to new heights.
The third path is one many founders dream of: an acquisition. In some instances, this may take the form of an acquihire, where the acquiring company brings on the team with little to no financial exchange, often offering stock in the new company. But the most exciting outcome is a full acquisition with a cash component, leading to a life-changing event for the founding CEO and others involved. That said, even this Hollywood-style ending can have its challenges, especially during the post-acquisition integration phase. It’s not uncommon for founding CEOs to leave before their earn-out period is over due to frustration with how the acquisition unfolds.
The final, and rarest, end state is taking the company through an IPO and continuing to lead it beyond. While IPOs are few and far between, they remain a possibility for some, and are part of the high-risk, high-reward nature of being a founding CEO.
These are just a few of the common end states founders encounter. At CEO End State, we believe in openly sharing these experiences to better prepare and support one another as we navigate the many twists and turns of leadership transitions.
