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Entrepreneurs and founders in medical technology (MedTech) continuously drive breakthrough ideas; creating innovative medical devices, diagnostics, and enabling life sciences tools, doing the hard work of early validation, clinician advocacy, and persistence through challenging regulatory and reimbursement pathways. Even as their companies mature, founders still look outward for the next wave of innovation, often partnering with or acquiring other founder-led technologies. When the time comes for a leadership transition, MedTech boards aim to protect that scientific integrity, while ensuring the company has new leadership that can bring these ideas to their full potential and scale the company.
In early MedTech companies creating breakthrough technologies, the difference between success and failure in creating scaled, profitable business is often measured in leadership decisions—especially those involving the founder CEO. The evolution from invention to commercial scale is predictable; however, as companies move through funding rounds, clinical development and manufacturing scale-up, they’re often surprised by their changing leadership needs.
While investors and boards back founders who demonstrate vision and scientific insight, the vision needed to invent new technologies and the skills needed to navigate the regulatory landscape and build commercial engines are rarely the same. When that gap goes unaddressed, companies risk losing both value and time. Conversely, the partnerships that unlock the most value accept this early and discuss it openly.
To understand how investors and boards can unlock more value from founder–investor partnerships in MedTech, Russell Reynolds Associates interviewed eight US-based investors, board members, and former CEOs with direct involvement in 47 founder transitions across diagnostics, tools, and medical device companies, completed in the last five years. Their insights reveal the core dilemmas and best practices for navigating founder succession in MedTech. Our findings validate those seen in Noam Wasserman’s The Founder’s Dilemma (Harvard Business Review, 2012), and also highlight the unique challenges that MedTech companies face.
Key Finding 1: In MedTech, boards almost always move too late on founder CEO transitions. Nearly every leader we spoke to said, in hindsight, they should have acted earlier, often by at least a year.
Key Finding 2: Continued founder involvement post-transition only unlocks value when roles and authority are redesigned, not improvised. Transitions work when founders’ strengths are refocused and decision rights are crystal clear; they derail when founders become “shadow CEOs.”
Key Finding 3: The most effective MedTech founder–investor partnerships treat leadership as a joint design challenge from the start. Early, explicit conversations about stage-appropriate leadership, founder evolution, and potential successors create smoother transitions, stronger performance, and better protection of founder legacy.
MedTech boards are especially hesitant to undergo a founder transition because their founders are often scientists, clinicians, or engineers who have spent years developing the underlying science. They often have expertise that is difficult—if not impossible—to replicate. That deference makes it harder to confront a simple reality: the CEO who was perfect for inventing the technology may not be the one to lead a multi-site, heavily regulated, commercial organization. In a sector with long development cycles and high fixed costs, waiting to address that mismatch is especially costly.
Triggers for founder CEO transitions (see Figure 1) included missed clinical, regulatory, or commercial milestones; stalled fundraising; repeated complaints about leadership style or culture; and a reluctance to hire or upgrade key executives needed for the next stage. Several investors also cited acute financial strain, runway running out, or failure to commercialize despite adequate capital, as the moment they knew that change was unavoidable. Yet almost every investor and board member told us that, by the time they acted, they already knew they were late.
In particular, one MedTech board member stated that they had never replaced anyone they didn’t wish they’d replaced a year earlier and noted how often that proved true for founder CEOs. Another investor advised, “As soon as you’re asking, ‘Do we need a new CEO?’ the answer is yes”, and probably has been for a while.
Figure 1: Why MedTech boards decide to replace founder CEOs
Source: RRA, Medtech Founder–Investor Partnerships Interviews, 2025. Interviewees (investors, board directors and former CEOs) collectively represent at least 47 founder CEO transitions.
The penalty for waiting shows up everywhere: underwhelming commercial launches, unresolved quality or manufacturing issues, missed financing windows and, often, a demoralized organization. Several interviewees described a “palpable sense of relief” once a new leader arrived, even among employees who had been anxious about change. One investor who has overseen fifteen founder transitions noted that while almost all involved some level of friction, two were particularly problematic; involving cases in which boards waited so long that the situation ultimately escalated into litigation and trade-secret disputes.
Conversely, our interviews showed that when boards anticipated the next phase and acted ahead of a major gate—such as Series B or first launch—handovers were smoother. In one case, the founder asked for the change after recognizing his limits in commercial management, and the transition was orderly. In others, investors set expectations before investing that a different CEO profile might be needed at scale, then executed quickly when those gates approached.
For boards and investors, the message is clear: the right time to confront a founder leadership question is before the need arises, not after another missed quarter. In capital-intensive MedTech, we see various triggers that serve as indicators of and guide decision-making around CEO underperformance. We note that courage on timing is not just good governance; it is one of the most powerful value-creation levers available.
In MedTech, few investors want to lose founders entirely. Founders often hold deep scientific knowledge, credibility with the academic and clinical community, and personal relationships with early customers and champions. Replacing a scientist-founder who understands the technology, the regulatory pathway, and the ecosystem is extremely difficult. The instinct to “keep them around” is usually right—but only if the organization can clearly define how the founder will contribute in the next chapter. When that design work is skipped, well-intended compromises quickly become sources of confusion and conflict.
Additionally, moving from leader to employee is hard. Reporting to someone else, living with a narrower span of control, and seeing decisions made without budget authority can be a real hurdle for founders unless expectations are explicit.
When a clean exit is the right answer, continuity comes from preparation, rather than proximity. The strongest outcomes tended to feature a brief, time-bound overlap, a single narrative owner for the science, and a record of the regulatory and design history that the team could rely on. Relationship handover worked best when key opinion leaders, investigators, early customers, and partners were simply mapped and introduced with clear context, then stewarded by named executives. For the incoming CEO, early credibility is key. Pairing closely with a senior scientific or clinical leader, listening first with KOLs and lighthouse customers, and stating who owns which decisions signals that the company’s IP, clinical plan, and launch path are intact. That combination reassures employees and investors that the founder’s departure is a turning point, not a rupture.
Our interviews surfaced both ends of the spectrum (see Figure 2). Where transitions worked well, founders moved into clearly defined positions—typically CSO, CTO or a focused board role—with mandates centered on science, innovation or external reputation. In these situations, founders often became powerful allies.
By contrast, problematic cases involved dual-reporting relationships, informal veto power, or vaguely defined executive chair roles, in which, as one director put it, “the CEO and founder effectively reported to each other.” Employees experienced these situations as having “two CEOs,” and progress slowed accordingly.
In our interviews, the most common post-CEO path was an executive technical role such as CSO, CTO, or head of platform, followed closely by a board-only seat that preserved external credibility while leaving operating authority with the new CEO. Advisory or consultant arrangements also appeared, usually focused on KOL engagement and external storytelling. Full exits were less frequent. Across all paths, outcomes were strongest when authority lines were explicit and the handover of scientific history, regulatory record, and key relationships was deliberate; where boundaries were vague, teams experienced the “two CEOs” effect.
In roughly half of the cases our interviewees discussed, the founder ultimately left the company. This is a perfectly viable outcome in MedTech. A clean exit is not a partnership failure; they work well when the board prepares for continuity, captures the regulatory and design history in one clear source, and names an internal owner for the scientific narrative. This includes executing early handovers to key opinion leaders, investigators, and lighthouse customers to preserve trust, and pairing the incoming CEO with a senior scientific or clinical lead to signal continuity of the plan. With this groundwork, the organization experiences the leadership change as progress—investors stay engaged, and the founder’s legacy remains intact even as the business moves to its next stage.
Figure 2: Where do founders go after the CEO transition?
Source: RRA, Medtech Founder–Investor Partnerships Interviews, 2025. Interviewees (investors, board directors and former CEOs) collectively represent at least 47 founder CEO transitions.
Boards and investors need to treat the founder’s next role as a design challenge, not an afterthought. That means agreeing in advance on:
When those elements are in place and reinforced through communication and incentives, founders can become powerful amplifiers of the new CEO—rather than unintentional blockers.
For boards that want the founder to stay: design first, announce second. Before starting a CEO search, boards should be able to answer three questions:
Too many MedTech founder transitions start with a crisis board meeting. Several investors described a simple shift: plan leadership evolution from day one, define what the next CEO will need, and agree early on what that implies for the founder’s role.
Leaders who were most positive about their founder transitions all did similar things up front. During the diligence process or shortly after investment, they aligned with the founder on their long-term aspirations. This allowed them to make leadership change a standard operating practice. As part of the transition plan, they tied expectations to upcoming milestones such as regulatory submissions, manufacturing readiness, and launch, agreeing on how they would know if a different profile was needed. They actively planned in advance for potentially recruiting a new CEO, so the topic felt routine, not accusatory. Independent advisers helped define future CEO success profiles and, crucially, worked with boards and founders to think through the founder’s next role when a change was needed.
The result: smoother execution and better protection of the founder’s legacy. Founders had more say in how they would evolve; boards had more time and better candidates; and organizations experienced leadership change as part of a growth plan, rather than a vote of no confidence. Even when the conclusion was that the founder should remain CEO, agreeing how leadership will be reviewed, what “lanes” each party will occupy, and how difficult calls will be made sets the partnership up to navigate pressure points without destroying trust or value.
In MedTech, each major value inflection point, funding round, pivotal trial, approval, launch, raises the stakes. Without an explicit plan for leadership evolution, investors default to reactive decision-making once milestones are missed. That reactive posture narrows the field of potential CEO candidates. By contrast, where leadership is treated as a joint design challenge, boards can act before crisis, founders can transition from a position of strength, and new CEOs can arrive with clear mandates and support.
Figure 3: Around commercial launch is the hotspot for MedTech founder CEO transitions
Source: RRA, Medtech Founder–Investor Partnerships Interviews, 2025. Interviewees (investors, board directors and former CEOs) collectively represent at least 47 founder CEO transitions.
Founder-investor partnerships unlock the most value when leadership evolution is treated as part of the growth plan, not as an issue to solve. Boards, investors and founders can take several concrete steps now to ensure smooth transitions:
Set the expectation early that leadership will evolve as the company scales and treat the post-CEO role as a design problem. Define mandate, reporting line, decision rights, budget thresholds, and incentives before the new CEO arrives, pairing that structure with a respectful narrative that provides targeted support for both leaders. This reduces any potential “two CEOs” confusion and makes it easier for the founder to move from owner-leader to employee with clarity. If a founder is likely to stay involved, define their future mandate, reporting line, and decision rights before a new CEO arrives. Be explicit about where the founder’s voice is critical (science, clinical relationships, category storytelling) and where the CEO must have the final say. Finally, align incentives so that the founder benefits when the new leadership team succeeds.
Use a stage-specific scorecard that reflects MedTech inflection points, such as organizational size/complexity, scaling operations, regulatory and reimbursement, and go-to-market and scale. Build a broad, diverse slate, apply multi-rater assessment, and reference for regulated-market scale. When a new leader is selected, publish a 30-60-90 onboarding plan that sets operating cadence, KPIs, and a RACI that clarifies how the founder will engage. This plan should also include coaching for both the founder and the incoming CEO to help them navigate new dynamics and consider connecting founders with peers who have successfully made similar transitions.
Taken together, these actions help MedTech investors and founders move from reactive, late-stage interventions to proactive, thoughtfully designed partnerships, unlocking more of the value that breakthrough science deserves.
Bob Brousseau is a senior member of Russell Reynolds Associates’ Healthcare practice globally.
Nicole Lambert is a senior member of Russell Reynolds Associates’ Healthcare practice globally.
Aumeya Goswami is a member of the Russell Reynolds Associates’ Commercial Strategy & Insights Healthcare team.
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