Founders here are those who founded their companies and have complete control over their companies. If founders are only interested in their personal benefits, their strategies could potentially hurt the companies’ benefits. Some founders are not interested in making their companies become giant companies. For example, the founder of Tesla, Elon Musk, founded several companies, including PayPal, but currently, he focuses on Tesla and SpaceX, these two companies. Therefore, it is possible for founders to sell out their companies before their companies grow large enough.
For founders, they want to receive as high returns as possible. Of course, making their companies grow large could deliver the highest returns; however, it involves lots of risks. When a company is competing in its market, it faces uncertainties and is possible to lose the competition at any stage. Under such circumstance, if the founders believe they are facing too much risk, they prefer a one-time certain payment and pass the risk to someone who is more willing to take the risk. Moreover, there are other opportunities. If the founders like other opportunities, they will find the current work they are doing have high opportunities costs and they would like to sell out their companies and move to new sectors what they are more interested at.
Therefore, there is a possibility of conflict interest between the founders and their companies.
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