It's a narrative that has unfolded in several boardrooms, leaving many questioning the dynamics at play.

Let's delve into the nuances of this intricate process to demystify the seemingly unfathomable.

The story often begins with the inception of a visionary's dream—a startup that grows into a thriving enterpr

As the company evolves, so does its structure, and a board of directors is established to provide strategic guidance and oversight. This is where the seed of potential founder disenfranchisement is planted.

The shift in control often transpires through a series of strategic moves by the board.

One critical element is the distribution of shares. In the early stages, founders typically hold a significant portion of the company's shares, allowing them substantial decision-making power.

However, as the company matures and seeks additional funding, new investors come into play, diluting the founder's ownership. They inject capital into the business in exchange for shares and positions on the board.

This dilution can lead to a scenario where the founder no longer possesses a majority stake, making them susceptible to decisions made by the board, which is elected by shareholders.

The board, now representing diverse interests, can exert influence over pivotal matters, including the founder's position within the company.

Another avenue through which founders may lose control is the introduction of voting rights discrepancies.

While common shares are the standard form of ownership, some investors may acquire preferred shares with enhanced voting power. This can tip the scales in favour of those investors and the board they elect, reducing the founder's ability to sway crucial decisions.

The process is not always hostile; founders may willingly cede control for the sake of scaling the company or bringing in the expertise they lack.

However, when power dynamics shift without the founder's consent, it can lead to a profound sense of loss and frustration.

Empathy is crucial when examining these situations. Founders often pour their heart, soul, and endless hours into building their companies.

It's essential for founders to navigate these waters with strategic acumen, understanding the implications of every decision, from equity distribution to board composition.

Engaging in open conversations with investors and board members, and ensuring clear agreements are in place from the outset, can mitigate the risk of an unexpected loss of control.

Kenyan businessman Bharat Thakrar founded SCANAD in 1982 and later set up WPP Scangroup Plc.

In 2021, he was suspended and ousted from the company after allegations of financial misconduct. He was later cleared after investigations failed to find incriminating evidence.

OpenAI founder, Sam Altman was fired as CEO on November 17, 2023. Despite being pivotal in the creation of Chat GPT, he was forcibly removed by the board.

However, a few days later Microsoft, a company with significant investment in OpenAI hired him to lead a new advanced AI research team.

The late Steve Jobs, the co-founder of Apple, was forced out of the company in 1985. The ouster was attributed to his confrontation with the company's board of directors.

Steve Jobs returned to Apple as CEO in 1997, after a crisis forced the company to merge with NeXT (a company Steve Jobs founded after leaving Apple) in a $400 million deal.

Jack Dorsey, one of the co-founders of Twitter (now known as X), was fired in 2008 due to poor management style and communication issues with board members.

He later returned to the company in 2015.

Travis Kalanick, the co-founder of Uber, was forced out of the company in 2017. The circumstances surrounding his departure were related to various controversies and internal issues

Dov Charney, the founder of American Apparel, was fired by the board for reasons related to financial and personal misconduct in 2015.