The Founder’s Role in Shaping Company Culture: Lessons from Early-Stage to IPO
Company culture isn’t a set of values on a website or a mission statement written for investors. It’s how decisions are made, how people treat each other, and how the company operates every day. And in the early stages, it all starts with the founder.
The impact a founder has on culture is immediate and long-lasting. Whether intentional or not, the way a founder leads, communicates, and hires sets the foundation for everything that follows. In the earliest days of a company, culture is the founder.
But as the company grows, especially toward an IPO or major scaling event, culture must evolve beyond the founder. If it remains too dependent on one person, it becomes a bottleneck rather than a strength.
Culture in the Early Stages: The Founder’s Shadow
In the beginning, every founder has an outsized impact on culture because they make every major decision. Their work ethic, leadership style, and even personality become embedded in how the company operates.
Research by Schein (1983) highlights that founders influence culture in three key ways:
Who they hire and promote – The first employees shape the DNA of the company.
How they react to problems – Their response to crises sets the tone for how the team handles challenges.
What behaviours they reward and discourage – This creates the company’s unwritten rules, which define how employees behave.
For example, if a founder values speed and risk-taking, employees quickly learn that moving fast matters more than avoiding mistakes. If a founder is highly detail-oriented, the team will naturally prioritize precision over rapid execution.
In my own journey as a founder, I saw firsthand how my own biases and leadership style became ingrained in company culture. If I was working around the clock, the team followed suit. If I overlooked small wins and only focused on big milestones, employees learned to do the same.
The challenge? What works in the early days doesn’t always scale.
Scaling Up: When Culture Needs to Evolve
As the company grows, the founder can no longer be involved in every decision. What once worked—quick decisions, informal processes, and a tight-knit culture—can start to break down.
This is where many founders struggle. They either:
Cling too tightly to control, stalling growth because they don’t trust others to lead.
Step back too much, creating confusion as employees try to interpret what the culture should be.
This is where leadership must shift from personality-driven to values-driven. Instead of culture being who the founder is, it must become what the company stands for—something that can exist independently of any one person.
Research from Bass (1990) on transformational leadership suggests that as companies scale, leaders must:
Articulate a clear vision that employees can rally around.
Empower others to lead, rather than making every decision themselves.
Encourage innovation while keeping core values intact.
At this stage, hiring and leadership development become critical. Founders must hire leaders who embody the company’s values and who can reinforce culture without needing constant input from the founder.
IPO and Beyond: Protecting Culture Without Stifling Growth
By the time a company approaches an IPO or major expansion, culture can become a risk factor if it isn’t well-defined.
A toxic work environment can lead to high turnover and bad press.
A rigid culture that resists change can prevent innovation.
A disconnected leadership team can erode trust between employees and executives.
At this point, the founder’s role in shaping culture shifts to stewardship rather than daily involvement. This means:
Codifying values and leadership principles so they outlast any one person.
Investing in leadership development to ensure future leaders carry the culture forward.
Listening to employees and being willing to adapt as the company scales.
Pisano (2019) argues that strong innovation cultures are not just fun and flexible—they require discipline. The same is true for scaling company culture. It requires intention, structure, and accountability to ensure that what made the company great in the early days doesn’t get lost in the growth process.
Final Thoughts: Founders Set the Culture, but They Can’t Own It Forever
The best founders don’t just build a company—they build a culture that can thrive without them.
At Founded Partners, we work with founders to help them navigate this cultural transition—from startup to scale, from founder-led to leadership-driven. Whether you’re hiring your first employees or preparing for a major expansion, getting culture right is a competitive advantage.
If you’re a founder thinking about how to scale your culture, let’s talk.