The Great SaaS Founder Exit Wave: What Mathrubootham's Freshworks Departure Tells Us

Read time: 5 minutes.

Welcome to the 166th edition of The Growth Elements Newsletter. Every Monday and sometimes on Thursday, I write an essay on growth metrics & experiments and business case studies.

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Girish Mathrubootham just stepped down as Executive Chairman of Freshworks, the company he built from zero to $596M ARR and a successful IPO.

His reason? "I want to focus on my VC fund and help other entrepreneurs."

This isn't just one founder's journey. It's a pattern revealing the operational reality of scaling SaaS companies.

[1] Why Founders Leave Their Own Success Stories

Post-IPO identity crisis:

• You built a company; now you're managing a machine

• Innovation gets replaced by compliance and process

• Quarterly earnings calls matter more than customer problems

• Board meetings focus on margins, not breakthroughs

Operator bottleneck:

• Skills that got you to IPO don't scale post-IPO

• Vision and hustle get replaced by systems and delegation

• Founder-dependent decisions slow down a $500M+ operation

• Your presence becomes the constraint, not the catalyst

[2] Pattern Across SaaS Exits

What I see in my operator work:

• Founders hit walls around $10M-$50M ARR, where their involvement slows growth

• Technical founders struggle with sales and marketing scaling

• Sales-driven founders can't delegate product and engineering decisions

• The company outgrows the founder's operational capacity

The Mathrubootham case study:

• 15 years building Freshworks from idea to $596M ARR

• IPO in 2021, but stepped back from day-to-day operations

• Now focusing on investing and mentoring through his VC fund

• Classic pattern: successful operators become successful investors

[3] When Founders Should Step Back (The Operational Signals)

Revenue growth stalls despite market demand:

• Teams waiting for founder approval slow decision velocity

• Customer escalations still route through the founder

• Product roadmap depends on founder's vision, not customer data

• Sales process requires founder involvement to close deals

Team productivity decreases:

• Executives hired but not empowered to make decisions

• Middle management exists, but doesn't have authority

• Innovation slows because the "founder needs to approve"

• Best performers leave because they can't operate independently

Personal exhaustion becomes operational risk:

• Founder burnout affects company performance

• Vacation means business stalls

• Health issues threaten business continuity

• No succession plan or leadership pipeline

[4] Operator Playbook for Founder Transitions

Phase 1: Systems over heroics (Years 1-3)

• Document decision-making frameworks

• Hire executives who can operate independently

• Build processes that work without founder involvement

• Create metrics that predict problems before they happen

Phase 2: Strategy over execution (Years 4-7)

• Focus on market expansion and competitive positioning

• Board-level strategy, not tactical decisions

• Partnership and M&A opportunities

• Long-term vision setting, not day-to-day operations

Phase 3: Legacy over control (Years 8+)

• Transition to Chairman or advisory role

• Focus on culture and values preservation

• Mentor next generation of leadership

• Use expertise to help other companies scale

[5] Real Lesson from Mathrubootham's Exit

Great founders build companies that don't need them:

• Freshworks continues growing post-transition

• Leadership team operates independently

• Culture and values remain intact

• Customer success doesn't depend on founder presence

The alternative is stagnation:

• Founder-dependent companies plateau

• Growth stalls when founders become bottlenecks

• Best talent leaves when they can't operate effectively

• Exit opportunities disappear when buyers see operational risk

Bottom Line:

Mathrubootham's exit isn't failure; it's success. He built a company that thrives without him.

The best operators know when to step back. The worst ones never learn to let go.

Build systems, not dependencies. Create leadership, don't hoard decisions.

Your company's success shouldn't require your presence.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria