One of the toughest questions a startup founder can ask themselves is, "Should I hire a CEO?" The earliest days of your own role as CEO in the company can seem pretty straightforward: You're knee-deep in sales, product development and financials. As your company scales, however, managing an ever-growing set of priorities can prove difficult, even impossible. If you do decide it's time to look outside for leadership, it's important to know what it takes to lure a proven executive into a startup.

After working with startups for over a decade, I have dealt with many founders who are presented with the tough decision of handing off the role of CEO to an outsider. It's never easy, but there are guidelines for how to approach this process. Typically, equity — a percentage of ownership in the company — is the anchor of a solid compensation package for a potential chief executive, so let's dive a little deeper into the details of what this may look like.

Equity Is Necessary

Equity establishes a commitment from the CEO through personal stake-holding, but there’s another significant factor that makes it a substantial component: potential return. Read More