Bringing in Investors and Losing Control

Nearly every entrepreneur I have worked with is highly and irrationally concerned about losing control of their company if they bring in investors. They have heard horror rumors about entrepreneurs being left out in the cold by greedy VCs. I used the term "horror rumors" instead of "horror stories" because the latter term would imply that there is even a wisp of truth behind them, which there is not.

You heard that right: There is absolutely no truth to the rumor that effective entrepreneurs get pushed out by investors.

To prove this point, here is a challenge I throw down to all readers of my blog:

Name one instance of a tech company that reached national prominence through VC investment and in which the original entrepreneur was pushed out by the time the company "hit the big time."

To help you out, I will list a few of the cases in which the original entrepreneur(s) did remain at the helm (CEO, President, Chairman, etc.) as the company grew monstrous, went public, etc. These are the biggest names in entrepreneurial business success, some of them going back 50 years. VCs were involved in most, but not all of those listed below, although massive outside investment was involved. I have included a range of types of companies for your reading pleasure.

Microsoft (Bill Gates), Oracle (Larry Ellison), Google (Sergey Brin), Twitter (Jack Dorsey), Wal-Mart (Sam Walton), Facebook (Mark Zuckerberg), Dell (Michael Dell), YouTube (Chad Hurley), MySpace (Tom Anderson), Starbucks (Howard Schultz), Nike (Philip Knight), Digital Equipment Corporation (Ken Olsen), Best Buy (Howard Schulze), Apple (Steve Jobs), Amazon.com (Jeff Bezos), McDonalds (Ray Kroc), Cisco Systems (Len Bosack), Intel (Andy Groves), Research in Motion [Blackberry] (Mike Lazaridis), Wikipedia (Jerry Wales), Outback Steakhouse (Chris Sullivan), Turner Broadcasting System (Ted Turner), Sun Microsystems (Scott McNealy), Netscape (Marc Andreessen), Silicon Graphics (Jim Clark), FedEx (Fred Smith)Yahoo (Jerry Yang).

Note that in the last case Jerry Yang was forced out more than a decade after the company hit the big time, but the CEO position is never a lifetime guarantee at any major company.

So what are you afraid of? Go out and get the money!