Founder Vs CEO: Differences That You Should Know!
Different terminologies in a business can be complicated for some people to understand.
There is a lot to unpack between CEO, Founder, Managing Director, Vice President, and many other roles.
If you’re considering starting your own business, you should be able to tell the difference between a Founder and a CEO. It can also benefit to be aware of several productivity hacks for startup CEOs.
This is the best way to organize your startup’s hierarchy and understand where you and your employees will best fit. In this post, we will take a look at the definition of Founder and CEO, their varied roles and responsibilities, and how they differ from each other.
Who Is A Founder?
A Founder, also known as an entrepreneur in general, is a person who has started or launched a business in the first place. He/she is the person who came up with the idea to start a business and acted upon it. Once the business is set up, they are responsible for driving the broader vision of the company and its goals.
Founders are in charge of handling the whole picture. They establish the core team, acquire the resources, find new customers, concentrate on the products and services, check funding and other requirements that the company needs to succeed. Although Founders can also become CEOs, both of them require different skill sets to perform their job.
Who Is A CEO?
If you are deciding to start a startup, then it is crucial to understand the differences between Founder and CEO. A Chief Executive Officer (CEO) in an organization is the highest-ranking executive manager. A CEO works with the Founder of the business to carry out the business strategies, vision, and long-term objectives. He/she is responsible for delegating tasks, collaborating with the potential investors, and communicating with the board of directors.
Additionally, a CEO positions the business or company for scale and he/she has the supervisory authority over all the other employees in the company. They spend most of their time training the team to bring out the best in them. Besides, a CEO makes all the final decisions that will drive the success of the company.
Roles And Responsibilities Of A Founder
Following are the roles and responsibilities of a Founder in an organization that tells the major differences between the Founder and CEO.
1. Develop A Business Plan
The key takeouts of a business plan should include an operational plan, executive summary, financial plan, market analysis, description of business model, marketing and sales strategy, and products/services that the business would offer. The Founder of the company makes sure that the business begins with a well-thought and effective business plan.
2. Establish A Mission And Vision
Most of the startups focus on the products and services that they are going to offer to their customers. Apart from deciding that, Founders also need to determine the exact mission and vision of the company to keep all the staff members together and on the same page to serve the customers in the best way possible.
3. Form The Board Of Directors
The crucial difference between a Founder and a CEO is their responsibilities in the company. Forming a board of directors is another one. The Founder needs to determine the kind of governing body or the board of directors he/she needs in the company. Once people are put in place, the Founder may supervise the company as well as the board.
4. Recruit Employees And The Executive Team
Bringing the vision to life is the primary responsibility of a Founder and he needs to assemble a team to achieve that. For this, there should be an executive team to supervise the critical points in the business and employees for product execution and final delivery to the customers.
5. Initial Funding
How can we forget about the funding that the company needs to get off the ground? Again, the tasks such as applying for loans, financing, grants, using personal assets, seeking venture capital, etc to cover the initial business costs until the business starts earning enough revenue is the sole responsibility of a Founder.
Roles And Responsibilities Of A CEO
In this section, we are going to learn about the roles a CEO has to play in an organization. While the tasks of a Founder majorly revolve around the initial stages of a business, the tasks of the CEO extend throughout the entire lifespan of the business. Specific roles and responsibilities differ according to the size and the nature of the business. However, here is a list of some of the common roles that a CEO needs to perform.
1. Track Company Performance
The CEO needs to make sure that the company meets its daily goals without any delay. If due for some reason that is not happening, it is the job of the CEO to come up with strategic plans and guidance on how to do so.
2. Maintain Healthy Relationship With The Board Of Directors
The second difference between Founder and CEO regarding their roles is that the Founder is responsible for determining the governing board but CEO is required to maintain these relationships and thus directly reporting to the board. CEO can also go to the board for taking help in major business decisions. He communicates about business updates as well as milestones to keep a check on the growth and performance of the company.
3. Oversee Company’s Operations
It is a crucial task to decide how the company will operate and how will it best serve the customers. This can be done by making the relevant hiring decisions that are related to all the operations in the business and updating the strategies to make sure that the company meets its goals and continues to perform excellently.
4. Public Spokesperson For The Company
A CEO is the public face of the company. He is responsible for attending industry and community events and taking media requests on the company’s behalf. Their brand thus becomes as important as the company’s reputation in the market.
Apart from these roles, a CEO also needs to set the company culture, help to scale the business, coach the employees, implement the business model, and communicate with the internal and external parties.
Characteristics Of A Founder
In this section, we will talk about all the characteristics that a good Founder should have –
- Ambition for making the business a great success
- Great relationship-building skills
- Quick learner
- Positive perspective and outlook on every situation
- Ability to listen to the feedback and work upon them
Apart from these traits and characteristics, a Founder should also concentrate on creating value for their customers and potential consumers. Thus, he should make sure that the business is
constantly evolving and changing positively as time passes. Whatever the task is, a Founder in a startup should be able to get their act together and get the job done anyhow.
Characteristics Of A CEO
Given below is a list of all the characteristics that a good startup CEO must possess –
- Adapting to different management styles
- Listening skills
- Good communication skills
- Ability to take several calculated risks
- Realistic and practical optimism
- Willingness to learn new things every day
- Relationship building with clients and investors
- Positive thinking ability
These are some of the characteristics that a CEO should have to become an amazing leader of the team.
All of these are the characteristics a CEO should possess as they are the final decision-making authority and the overall success of the organization is in their hands. If you are thinking of hiring a CEO for your startup, make sure that the person you choose for this position exhibits all the traits of a great leader.
How Are Both Of Them Different From Each Other?
We have learned about the meaning of both the terms, their characteristics, and their roles and responsibilities. But what is the actual difference between Founder and CEO? Every company has a Founder. However, not every Founder of a company can become a CEO. The Founder has the authority to become a CEO or they can pass on this responsibility to someone else.
There are instances where a lot of Founders have become the first CEO of their company. However, let’s not forget the fact that both of the jobs require a completely different skill set to run the business.
Another difference between a Founder and a CEO is that Founders come up with ideas, think about their product more than the company, and are geared towards the future. On the other hand, a CEO is a mediator that transforms all the business chaos into order. He focuses on building up the company as well as pays attention to even the minute operations that are running.
Sometimes, professional CEOs are short-sighted, meaning; they focus more on the short-term goals rather than focusing on the enthralling vision that made the business a huge success in the very first place.
That’s all there is to it. You now understand the key differences between a Founder and a CEO, as well as the tasks and duties that each of them has in a company. It is up to you whether you feel like it is important to have separate roles or you can take on both of them for your small business.
You may also decide to hire a new CEO in the future. But, make sure that they are equally determined about your business and its goals. Though Founder and CEO are two very different terms, both of them are vital for driving the success and growth of an organization.
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Q1. Is the Founder higher than the CEO?
A1. In a business, a Chief Executive Officer is the highest-ranking executive. They work with the Founder of the business to carry out operations and strategies.
Q2. What does Founder CEO mean?
A2. The Founder CEO of a firm is a person who begins a business or a firm and subsequently serves as its CEO.
Q3. Does the term “founder” refer to the company’s owner?
A3. When in a business, you are the only individual with equity; you can be called the owner. However, if you started the company, you can also be referred to as the Founder.
Q4. What is the major difference between a Founder and a CEO?
A4. The major difference between a Founder and a CEO is that a Founder starts or launches a business. On the other hand, a CEO is responsible for taking the company to scale.
Q5. Can a Founder or CEO be fired?
A5. Founders and CEOs of a company can be fired by the votes of the board of directors if they are not performing their jobs properly and bringing almost no profit to the company.
If you have just started a business or planning to start one very soon, use our AI-powered business assessments to help you make fast well-informed decisions on every aspect of the business.