If you're a cofounder, is it better to be the CEO or not?

When cofounders launch a startup together, deciding who will be CEO may or may not be a hard decision. If you're making that decision now, I'll share a list of what to think through. However, if you're not the CEO and you're still asking the question months or years later...you already know the answer in your gut.

Deciding who should be CEO at a brand new startup

This isn't always much of a decision. Your cofounder may have already made themselves CEO and asked you to join, and frankly, nothing wrong with that if they are up for the job.

However, if you're more of a gang of friends trying to figure this out, there are three things I'd consider:

• Who is most capable of doing the job?
• Who truly wants the job?
• Who is more likely to leave your startup early?

Let's take them one at a time.

Who's most capable of doing the job?

The CEO's job changes a lot over time, but the fact remains that if you are going to be a venture-backed startup, the CEO needs to be able to raise venture capital.

There are other skills a startup CEO should have - the ability to hire, the willingness to fire, being able to see the whole of the system that is your startup and to jump in to shore up whatever is most important. Really though, especially at the earliest stages, you can shift those duties around between cofounders and it won't matter that much, as long as the CEO is carrying their weight overall.

Who truly wants the job?

Enjoying being CEO and enjoying doing CEO are not the same thing.

Do you want to raise capital, or would you rather build? Either is ok, but consider the day-to-day of the job, not just what it'll feel like to have the title. Also remember this isn't a one-time question. Most startup CEOs are gone within three years; even if the company is successful, there's a good chance the wheel will turn. And of course, you get as many shots at entrepreneurship as you are willing to take.

Who is more likely to leave your startup early?

Do you already know some factors might lead one of you to leave early? A shorter financial runway, short tenure at every past job, a visa situation, a plan to have a family? If one of you is more likely to leave in the short term, that person should not be CEO. A CEO leaving an early-stage company can tank it, depending on how investors, customers, and employees react.

Rethinking who should be CEO at a later stage

This is a blog for the other cofounder, so I assume that's who you are. You may well be jealous of your CEO cofounder, which is totally normal, by the way. Or maybe you're just fed up with them.

The most important question to try to assess is: is it you or is it them?

Signs that your cofounder CEO is underperforming:

• They can't raise capital and they don't have another plan (this sounds mean - raising capital is hard, but if they don't raise and your startup doesn't have enough revenue, it dies).
• They are slow to recognize business issues and/or slow to act on them. Think: underperforming employee, partnership that's not economical, marketing channel that's not working. The CEO needs to be quick to understand and act.
• They're not showing up to work, not keeping their commitments, not delivering what they've promised.
• They're angry and abusive towards you and the team.
• The administrative side of the business is a mess (this creates liability for you and is a due diligence hot mess when you raise again).

Contrast these with the signs that you are outgrowing your role:

• Everything your CEO cofounder does is annoying.
• Their work quality and speed are fine, but you can always find fault.
• You are delivering on your work and are looking at some of their functions with envy.
• You are daydreaming about leaving and founding another startup...as the CEO.

If your CEO isn't measuring up, you have two choices: leave or try to get them to leave. Startups are not the Hotel California. No matter how much you feel you can't go, you can leave at any time. Tempers may fray, but if you stay classy, honestly, it'll be fine.

Trying to get them to leave is a trickier business. Frankly, you will probably get yourself fired, but you may not. The key here is to know what you want and to act only if you think it's also the right thing for the business (you're probably an officer of the corporation...it's Delaware law to act in the best interest of shareholders).

You can certainly start by talking honestly with your CEO cofounder, especially if you think they are exhausted or burnt out. If you're carrying a big load, the thought that you could leave and drop it on them may be enough for them to decide to go instead.

However, if you think they won't step down gracefully and you are convinced their performance is actively bad for your startup, you can go to your investors or board. Usually, you'll want to start with whoever you are closest to, or the lead investor from the last round, who is probably also on the board.

Note that this is a scorched earth tactic.

The most likely outcome is that you will get fired. But, if the board and investors have the same concerns as you, they may act to force your cofounder to step down. They don't need to own a majority of the stock or even control the board to do this. They simply make it clear that they will not take part in the next round. Unless you are truly on a rocket ship, that is the kiss of death.

Now, if your cofounder does cede the CEO role, there's no guarantee you'll get it. The board could leave you exactly where you are and bring in an outside hire. If that's a better situation for you, great. If not, well, you're back where you started.

Why you might stay even if you're unhappy with your CEO cofounder

If your CEO cofounder is adding value, and so are you, you may decide to stay a bit to see how things turn out for your startup.

What I found most helpful was to pick a few skills I wanted to learn and start adding them to my repertoire in cooperation with my CEO cofounder. For example, I'd never really spoken in public before, so we found smaller pitch competitions where it would be fine for me to pitch instead of him. Similarly, I started talking to conference organizers to get myself panel and fireside chat spots. One thing I was careful about was prioritizing topics that highlighted my technical capabilities, rather than making me sound like a mini CEO. That let me grow my skills and my network, without making my cofounder feel threatened or sounding off in front of investors in the audience.

If you can find ways to develop, staying for a while may make sense. Otherwise, you know what you need to do.

I'm not your lawyer, your therapist, your advisor, or your accountant. We're just internet friends, and these are just my experiences and personal opinions. Consult professionals for advice before you make any sudden moves in your startup.

You will see the occasional affiliate link. I do earn a commission if you buy the products I recommend. I appreciate you buying through the links if you're going to buy. This is a labor of love for my fellow cofounders, and I do love receiving a few coins to pay hosting costs if you like my work.