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made waves Monday when news of his resignation from broke.

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In a letter to Twitter employees that he also posted online, Dorsey noted there are a lot of conversations around the importance of companies being 鈥渇ounder-led.鈥� He called that notion 鈥渟everely limiting and a single point of failure.鈥�

Dorsey鈥檚 departure as a founder isn鈥檛 all that uncommon. To the contrary, it鈥檚 actually pretty uncommon for a founder to stay through an IPO, according to John Danner, a lecturer at .听

But trends in corporate governance鈥攎ost notably the popularity of dual-class common stock鈥攁nd companies going public earlier through blank-check mergers have contributed to founders sticking around longer in recent years.

A 附近上门 analysis of U.S.-based VC-backed companies that went public in 2015 on the and found that only around a third have a founder as CEO now.*

There鈥檚 also the distinction of being a CEO in name only versus one who actually controls the company.听

Danner pointed to a from the Law School Forum on Corporate Governance that found among companies that IPO, 60 percent no longer have founders as CEOs.听

And since they usually have little voting power, only half of the others make it three years as CEO post-IPO. The study noted that for a founder who raises his or her first round of VC funding, the probability of that person taking a company public and retaining 鈥渞eal control鈥� of it three years after its IPO is a mere 0.4 percent.听

鈥淭o some extent it鈥檚 not surprising, because anytime an entrepreneur is in the process of raising capital, they鈥檙e selling their business,鈥� Danner said.

CEO is a notable example of a founder still controlling a company in both name and power, nearly a decade after the IPO of the company once known as Facebook. But cases like his are an exception, according to Danner and Brian Broughman, co-author of the 2018 study and a law professor at .

鈥淢ost founders do not have that control, and if they thought they had it they may lose it when negotiating for subsequent rounds of financing,鈥� Danner said.

Some notable examples of VC-backed companies that went public in 2015 and still have a founder as CEO:

• (acquired by )

Some notable examples of VC-backed companies that went public in 2015 without a founder as CEO:

The 鈥渟urvival rate鈥� for founders who exit their company through a merger or acquisition鈥�a far more common way for a startup to exit than an IPO鈥攊s even lower. It鈥檚 much less likely for a founder to remain CEO of a company after another business acquires it; that鈥檚 part of why Google鈥檚 acquisition of Fitbit is unique–Fitbit founder still holds the title of CEO of Fitbit.

It鈥檚 more common for a startup CEO to be replaced pre-IPO, according Broughman. Investors can push for new leadership as a condition of financing a company, prompting a founder to step down鈥攁nd it鈥檚 not always adversarial, either, he added. In other words, when a startup founder steps down, it doesn鈥檛 always involve a boardroom coup d鈥檈tat like in the case of and .

Broughman noted that the number of founders staying on through an IPO and then three years post-IPO are likely a bit higher in recent years (his study looked at companies that received their first round of VC funding between 1990 and 2012).听

There are a couple reasons for that. First, there鈥檚 been an increasing use of dual-class common stock for companies going public. A dual-class structure creates a new class of common stock that鈥檚 typically held by the founder and has more votes per share than the other stock. That makes it much harder to replace a founder.

Dual-class common stock isn鈥檛 a new concept at all, but it wasn鈥檛 common in the past for venture-backed companies. However, opted for a dual-class structure when it went public in 2004, and the use of dual-class common stock has increased in the past five years or so, according to Broughman.

鈥淚t kind of paved the way for other companies when they have the discussions with the underwriter for the IPO to push for that,鈥� he said.

Another factor that鈥檚 likely led to more founder-CEOs staying on is some prominent VC firms like have pushed the idea of being 鈥渇ounder-friendly,鈥� which has rippled through Silicon Valley.听

And companies exiting through the SPAC route鈥攁n increasingly popular way for startups to go public鈥攁re making their market debuts earlier in the company鈥檚 lifespan, so founders are more likely to stick around, according to Broughman.

鈥淚 do think the last three or four years have had a meaningful shift in this direction,鈥� he said of founders leading their companies through an IPO.听

But while there鈥檚 been a shift to a more founder-friendly atmosphere in recent years, he added that founders retaining control of a public company is 鈥渘ot as common as these idiosyncratic founders that are in the news would suggest.鈥�

附近上门 Pro queries used in this article

Methodology

For this analysis, we looked at U.S.-based venture-backed companies that went public in 2015 on the or Nasdaq. We did not include biotech companies or companies that have since been delisted in our analysis. was omitted from the data, because it began trading in 2017 after being acquired by a blank-check company that went public in 2015.听

To verify leadership, we checked S-1 documents, company websites and news reports to find if the CEO during the IPO in 2015 was also a founder, and if a company鈥檚 founder currently serves as CEO.

Illustration: Dom Guzman