One of the quiet heartbreaks of startup life is when a founder is fired from their own company. It happens more often than we care to admit, and in most cases, the warning signs are visible long before the board moves.
Firing someone is never pleasant, but removing a startup founder-CEO is especially somber. Founding a company demands a heroic mix of energy, courage, and persistence. A startup is, at its core, a disagreement with the status quo (credit to Alistair Croll and Emily Ross, authors of “Just Evil Enough”). It requires someone willing to endure years of scrutiny, criticism, and rejection.
Entire industries we now take for granted, such as commercial airlines, personal computers, electric cars, and digital banking, were once considered absurd ideas. Behind each was a founder bold enough to ignore the establishment and build anyway.
But not every startup founder makes the full journey. Some leave by choice. Others go down with the ship when the business fails to carve out a sustainable spot in the market.
That is not the kind of ending I am talking about here.
This is about when a company is working. There’s traction, customers, revenue, market prominence. Then, suddenly (or so it seems), the board fires the CEO.
When Success Raises the Risk
A funny thing happens as a startup finds success: the risk of the CEO being fired increases.
Source: Carta
With every funding round, founder ownership declines. Eventually, founders cross the point of no return, and they no longer hold majority ownership of the company or control of the board. Just as dreams of a material exit begin to crystallize, the outsiders gain control of the company’s future.
While they recognize the risk of removing the very person who built the company, they may choose to do so anyway.
Why?
The reasons are fewer than you might think, and they are mostly rational and rarely insane.
What Boards Actually Do
Let’s zoom out for a moment. Most venture boards operate with a light touch. Directors tend to spend more time chasing new deals than managing existing ones. Their contributions to a startup generally fall into four categories:
- Governance: Oversight, ethics, and fiduciary duty.
- Introductions: Candidates, customers, and future investors.
- Strategy: Feedback on major decisions.
- Capital: Writing checks when needed.
Because their window into the company is limited (often just one-off phone calls, periodic updates, and quarterly board meetings), the way they evaluate a CEO is often distant and incomplete. As a result, the reasons for firing tend to be narrow, consistent, and easy to spot.
The Patterns Behind CEO Firings
1. Broken Promises
Set targets. Miss them. Repeat.
It is not about whether the business is hard. Of course it is. What matters is whether the CEO can forecast accurately, course-correct quickly, and deliver on their word.
Missed targets erode trust. The assumption is not that the CEO is deceptive but that they are incapable. Repeated misses signal a leader who does not understand how to plan, marshal resources, manage people, or drive execution at high velocity.
If the board no longer believes the CEO is a good operator, the search for a replacement quietly begins.
2. Toxic Culture
Boards love to celebrate a big hire — heads of product, sales, engineering. But when those new leaders quit quickly, eyebrows go up. When two or more leave in succession, alarms go off.
The board assumes there is a culture problem, that the CEO cannot build or sustain a high-performing team. Boards usually don’t wait for exit interviews to start drafting a transition plan.
3. Co-founder Conflict
Championship sports teams do not fall apart because they forget how to play. Great bands do not break up because they forget how to make music. The downfall is almost always relationship decay.
Startups are no different. When co-founders start prioritizing ego over progress, being right over being curious, dysfunction follows. Trust declines. Execution slows.
The board will not need long to notice. Best case, they back one founder and remove the rest. Worst case, they clean house.
4. Board Dysfunction
Sometimes the problem is not within the executive team; it is around the boardroom table.
While directors have a duty to represent all shareholders, many are influenced by loyalty to their own funds. Some may push for a sale to show returns. Others may be haunted by ghosts of sour investments past.
Or maybe the CEO just fails to manage the board well, perhaps by surprising them, ignoring their input, or neglecting to establish trust. Board misalignment often first manifests as CEO vulnerability.
5. Malfeasance
Yes, sometimes the CEO is the problem.
Mishandling money, breaking laws, mistreating people. Startup lore may glorify pirates, but when misconduct crosses the line, there is no redemption arc. The CEO is out. Full stop.
The Call Is Usually Coming From Inside the House
Too many founders hold onto the idea that if they get fired, it will be because the board was clueless or malicious. That is a comforting narrative, but it is not true in most cases.
Most CEO firings are explainable. They are also avoidable.
So, ask yourself:
- Am I delivering on the promises I make?
- Are my best people sticking around?
- Are my co-founders aligned with me and each other?
- Do I know how my board perceives me?
- Am I acting in a way that earns the board’s trust?
If you do not know the answers, consider asking a trusted board member a direct question: “Do you fully trust me to run this company as CEO? If you have any hesitation, what would I need to do to earn back your confidence?” In the high-pressure, fast-moving world of venture-backed startups, subtlety rarely helps.
If there is a gap, find it and close it. Demand more from yourself. Go learn, read, get a teacher, hire an adviser — whatever it takes to keep the job. Because the ceiling of any startup is the capability of its CEO.
Don’t settle, and you’ll never be fired.