Venture capitalists exhibit some strange behaviors, but none is more bizarre than the near-inevitable scheming to remove a company's founder-CEO. Odder still is that these plans are often hatched just as the company begins to really perform.
The process, instituted by a particular stripe of venture capitalist, represents the acme of "adult supervision" by the VC, a destroy-the-village-to-save-it moment of investor heroism. The show trial brings rote charges — the CEO is too autocratic, too visionary (crazy), late on monetization, late to exit, and far too young — with succession by a gray-haired realist as the inevitable penalty. The CEO, the VC reminds us, serves at the pleasure of the board. Sensible in theory, this strategy almost always destroys value in practice.
