“The best-known example of this, albeit with a somewhat different backstory, is Apple. At its IPO, in 1980, Steve Jobs was still at the four-and-a-half-year-old company, as an executive VP and vice chairman, largely because of his charisma and ability to articulate a vision for the evolution of computing. But because Jobs and his cofounder, Steve Wozniak, had taken several rounds of VC funding by then, they together owned just 23% of Apple’s equity, and Jobs had few allies on its six-person board. Jobs’s firing in 1985 and his replacement by PepsiCo president John Sculley may be Silicon Valley’s Shakespearean tragedy, but it was hardly surprising. In fact, what’s surprising is that Jobs held on as long as he did.

This stereotypical fire-the-founder pattern has notable exceptions. Hewlett and Packard founded their company in 1939, many years before the advent of modern venture capital, so they retained control of HP for decades. Microsoft, founded in 1975, became profitable so quickly that it didn’t need much venture funding; when it went public, in 1986, Bill Gates, Paul Allen, and Steve Ballmer owned 85% of the company, and its sole VC owned just 4.4%. Likewise, Jeff Bezos controlled 48.3% of Amazon’s equity when it went public, in 1997, and even today he holds three times as much stock as Amazon’s largest institutional shareholder. But until fairly recently, ousting the founder was standard on a start-up’s journey to an IPO.”