When Ryan Petersen introduced he was stepping down because the CEO of Flexport to change into a companion at Founders Fund, he most likely wasn’t anticipating to return to the transport logistics startup simply months later following a succession snafu.

Succession is difficult, and even the perfect laid plans don’t all the time work, as Flexport discovered. It’s fully pure for founder-CEOs like Petersen to need to transfer on from their firms. Many firms additionally hit some extent the place it could make extra sense for a founder-CEO to step down and make area for various, or extra skilled, management.

However in right this moment’s market, it’s tougher than it has been in years to do an IPO, which has led to plenty of first-time founders discovering themselves on the helm of seemingly dormant and sprawling startups, endlessly. What’s worse, the previous decade of straightforward capital availability inspired many startups to develop sooner than they need to have. It additionally lulled many founder-CEOs into believing that the great occasions would final. If issues don’t enhance, we might begin to see extra exits subsequent 12 months — not by firms, however quite their founder-CEOs.

Some startups have already got succession plans in place, however they’re doubtless within the minority. However succession doesn’t should be daunting even if you happen to don’t have a plan.

Founders can take just a few preliminary steps to set themselves and the corporate up for an eventual departure, even when they aren’t certain of the timeline but. In response to Lauren Illovsky, a expertise companion at CapitalG, the very first thing to do is ensure you are literally prepared to depart.

“[Founders] must take a tough look [at] themselves and ask if they’re really able to step down once they say they’re,” Illovsky stated. “Many occasions, when push involves shove, they aren’t.”