Research: What Happens to a Startup When Venture Capitalists Replace the Founder

Entrepreneurs often seek external capital to accelerate their growth. This is especially true in hotly contested markets where fast growth can be the difference between success or failure. And yet this outside funding may come with strings attached, which can (and perhaps should) give entrepreneurs pause. Founders will likely find their influence diluted, in terms of both financial equity and their control over the board of directors. They may even find themselves out of a job if their investors decide to fire them and find a replacement.