The Changing Role of the CEO in SaaS Startups That Grow from $3M to $10M ARR

A software company CEO with a growing $2M ARR software company asked me what he should expect on their march to $10M in revenue. How will his role change?

The founder-CEO role itself changes a lot in almost every company at this phase in these specific ways:

  1. The transition from founder-doer to CEO-leader is complete.
      • With 5-10 employees, founder-CEOs do a lot of stuff: sales, accounting, sometimes coding, and more.
      • With 10-30 employees, you have teams with leaders and the founder-CEO does fewer things inside the factory. Delegation 1.0.
      • Somewhere between 30-100 employees, the CEO stops having day-to-day responsibility for execution tasks. You lead the leaders and team members who do all the frontline work.
  2. Now the CEO is focused on the things that only the CEO can be responsible and accountable for. Three things they can’t delegate completely:
      • Company strategy
      • Hiring the top leaders
      • Having cash to run the business

    More on each of these below, with a fourth important CEO job that doesn’t get mentioned often.

  3. The CEO is ultimately responsible and accountable for company strategy. The Chief Decider Officer.This doesn’t mean the CEO goes off and decides everything by themselves. It means the CEO gets ALL THE HELP THEY CAN GET from leaders, team members, advisors, board members, consultants, books, and conferences.After all that, the CEO makes the final call on the most important strategic questions that guide the company. Someone, not a committee, has to make the calls and make sure they get done.
  4. The CEO hires and fires the leaders who hire everyone else in your company.Some CEOs are involved in every hiring decision, but that becomes impractical. Hiring the top leaders takes 20-30% of the time of CEOs of growing companies. You can get help, but you can’t delegate this.
  5. The CEO makes sure there is enough cash to do what needs to be done.Fast growth eats cash fast, so this is a critical issue that kills a lot of companies. Bootstrappers sell and get cash before spending.At funded companies, the CEO is the chief funding strategist, salesperson, closer, and investor relations manager. This can be up to 75% of the CEO’s time when you are raising new rounds or desperately begging for investment.
  6. The CEO is the ultimate Chief Believer Officer, as I call it.You can’t delegate the unfailing belief that your crazy company will succeed when times are tough or confusing. The CEO ultimately has to sell the whole company and community on the big vision.You may have a few cofounders and a very capable leadership team, but one person needs to make the call on these decisions AND be the chief communicator to the larger team and community.

    It’s the new job of the CEO as you grow: To figure out the main thing and then keep the main thing the main thing.

    It’s lonely at the top, but someone’s gotta do it.

What else do you see in this transition from founder to CEO?


Get the weekly Practical Founders email and podcast update.

Share Practical Founders


Win the Startup Game Without VC Funding

Learn how all 75 founders on the Practical Founders Podcast created an average founder equity value of $50 million.