Chief executives recruited from outside the company tend to perform better, and those with experience in venture capital and private equity did the best. That’s according to a new study by Vell Executive Search of CEOs that focused revenue growth among 51 publicly-owned technology companies in New England with $100 million or more in annual revenues.
The study, reported by Forbes, shows that externally-hired CEOs brought in a median three-year revenue growth of 99%, compared to 35% for their internally promoted counterparts.
CEOs with prior experience in venture capital and private equity achieved a median revenue growth of 200% versus 82% in general. Their advantage, according to Vell was that VC and PE executives have often analyzed many companies from the inside out, and learned first-hand what works. Someone with that kind of experience may be more likely to pick a winning company to work for, in the first place. Venture capital was also described as the “decathalon” of CEO training.
Some of the study’s other highlights reveal that younger CEOs tend to produce better results than older ones, as did Ivy League grads, MBAs and CEOs with prior chief executive experience.
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