Starting a company is a significant decision, and choosing to become the CEO to lead that company is crucial. However, if you look at the list of the world’s most valuable companies, you’ll notice that the top positions in tech companies are not always held by the original founders.
Switching CEOs is not uncommon in the startup world, although it’s rarely discussed openly. Private companies usually don’t have to announce leadership changes outside of the boardroom.
Still, deciding to step down from a startup that you’ve invested so much time and effort into is a difficult choice. I recently spoke with Troy Bannister, the founder of Particle Health, who went through this transition a few months ago, to understand how he made his decision.
“I’ve been in the healthcare industry for most of my adult life,” said Bannister. “I worked as an EMT when I was 18. During college, I switched majors from business to pre-med and later joined a VC accelerator called StartUp Health. There, I met numerous entrepreneurs building healthcare startups. When I saw companies like Plaid, Stripe, and Twilio, I wondered why there wasn’t an API model for clinical data. That’s when I started Particle.”
The timing was fortunate for Particle Health as the anti-information blocking rule of the 21st Century Cures Act meant that patients could access their health information. Consequently, startups in this field needed a secure way to request and store this information. Particle found its niche in providing connections to the health records of 320 million people.
However, five years later, Bannister realized that something was amiss. He had built the company from scratch, raising a Series B round, growing the team to 65 people, securing around 50 customers, and setting a clear path for a Series C round in the near future. But now, he faced a tough decision: Was he the right person to continue leading the company as CEO?