In a prior era, some considered it best practice to bring in “professional managers” to run the businesses started by creative and hard-working entrepreneurs once those businesses began to scale and appeared to need “adult supervision.” The term “upgrade management” is still occasionally heard among investors but never in front of founders.
...Founder CEOs raised more capital on average than professional managers, and produced higher valuations. Where they really shone, however, was in creating ‘value’ – the difference between capital raised and valuation. Value created was more than double for founder-CEO led companies than those led by professional managers.Wonder how they reduced sample bias in this case. If a company is doing well, it's unlikely that they'd replace the leadership -- so in most cases the "upgraded management" is actually coming into a situation that is likely less than ideal.
Read more in KPCB.
