The CEO of this $3 billion startup is stepping back, but the timing is odd
Anytime the CEO of a hot startup suddenly decides to step down, it raises eyebrows — especially if the news comes through leaked sources.
That was the case with Keith Krach, the CEO of DocuSign, an electronic signature startup that raised $280 million at a $3 billion valuation in May.
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Krach announced his resignation in early October through an internal memo, saying he told the board to "start the search process to identify a new long term leader and successor CEO for DocuSign."
The memo, which was obtained by Re/code through an anonymous source, said Krach would remain CEO until the company finds his successor, and that he would also serve as chairman for at least another three years.
Krach argues the decision to resign was part of a succession plan that's been in place for months, and that it's not a sign of any instability at DocuSign.
"First of all, I'm not leaving (the company) and our business is stronger than ever," Krach told Business Insider. "This is just part of a natural succession plan — I don't think it was a surprise to anybody."
Krach stressed that he'll remain equally involved in the company as chairman, and the new CEO will only bolster the talent level of his management team. Plus, it'll give him ample time to train his successor and set up the company for long term growth, he said.
"It's all about bringing in more fire power. My passion is coaching and leadership development," he added.
"I don't look at [my resignation] as unfinished business. The most important thing that I'll ever do at DocuSign is to make sure we have the best successor ever," he said. "The next leader that we're looking for is somebody who can lead the company for the next 7 to 10 years."
DocuSign raised a ton of money under Krach's watch
But the timing of Krach's resignation is odd.
DocuSign raised almost $400 million of its total $508 million VC funding in the past 18 months, all under Krach's watch. Krach joined DocuSign as the chairman in 2010, and took over as CEO just three years ago. In a July interview with Business Insider, he said he was "having the time of his life" as CEO.
Also, at least one former employee we spoke to said Krach's internal memo had surprised many employees at the time. Krach's a likable guy with a proven track record of having taken his previous company public (which was later sold to SAP for $4.3 billion), and is widely respected in the tech circle. His CEO approval rating on Glassdoor is an impressive 98%.
When a number of "unicorn" startups have been reported to be struggling (see: Dropbox, Evernote, Theranos), a sudden CEO change could raise a lot of question marks — because rarely you see a CEO leave a rocket ship startup.
Not burned out
Does that mean Krach might be exhausted by the daily grind and lost the passion to run a "unicorn" startup, just like some of his peers did?
Krach denies it. "I haven't lost any passion for DocuSign. I think it's the biggest market opportunity that I've ever seen in my life," he added. "I'm 57 years old, but I haven't lost my energy."
DocuSign is still a private company, so it's hard to tell how well the company's actually doing. The only metrics that of DocuSign's health are its claimed usage numbers: 50 million in total across 188 countries. It employs more than 1,500 people now.
Krach likes to point to the fact that DocuSign processed more transactions in the past year than it did in the company's entire history, and its whopping 80% market share in the electronic signature market. For what it's worth, DocuSign also has an impressive list of investors that includes everyone from former CEO of GM and Yahoo to celebrities like Tony Hawk and Jared Leto.
Regardless, Krach believes his legacy at DocuSign will stay strong, and is happy with what he's been able to build so far. And that's how he wants to be remembered after he steps down.
"I think [I'll be remembered] as a selfless leader and a builder, and for giving people the opportunity they've never dreamed of," he said. "It's creating the DocuSign network and changing the way companies do business — that I was part of building that foundation."
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