One of our early co-founders is currently occupying the Head of Product Development seat, but they clearly do not GWC the role anymore as we scale toward an exit. They want to keep their name in that seat to look good to potential buyers, but operations are suffering. How do we make this tough right-seat call?

Question

Tyler Smith · Accepted Answer

This is one of the most common and painful challenges founders face when scaling for an exit. When an early co-founder has outgrown their seat, keeping them in that role just to maintain appearances for prospective buyers is a major mistake. Savvy buyers will easily spot the operational drag and lack of leadership during the due diligence process, which will ultimately hurt your valuation.

To handle this right-seat call, you must separate their ownership status from their operational seat. Equity ownership is a financial arrangement; a seat on the Accountability Chart is an operational commitment. Use the GWC tool objectively. If they do not get, want, or have the capacity to lead product development at your current scale, they must step out of that seat.

You can handle this transition respectfully with these steps:
- Define a new, highly specialized seat that fits their actual strengths, such as Technical Advisor or Founder-in-Residence, which does not have direct operational reports.
- Move them into this new seat, allowing them to focus on what they do best while leaving the leadership seat open for a professional executive who GWCs the role.
- Clearly communicate the transition to your team and potential buyers as a strategic maturation of the leadership team.

By placing the right people in the right seats, you protect your company's growth, improve operational efficiency, and present a professional, scalable organization to buyers.