Editor’s note: Charlotte Beat is a regular feature on Wednesdays.You see the stories every quarter, the founding CEO or owners of a rapidly growing start-up are unceremoniously replaced.

Lynn Daniel of the Daniel Group says founders and owners of start-ups often want to stick around too long and it can damage a company’s growth if they do.

On Tuesday, The New York Times quoted Daniel to that effect about the company edocs, Inc., which grew 7,000 percent since its founding in Massachusetts in 1997. But Daniel say it applies to local and regional companies just as well.

The Times called Daniel to comment on its story about the ups and downs caused by rapid growth at edocs, after seeing a white paper from his company about rapid growth in startups.

The Charlotte-based consulting company sells strategic planning, market research and training services.

Daniel says that while he can’t name the companies, he’s had clients reluctant to let go of the reins when they needed to. He says he knows of a local example in which an owner, a serial entrepreneur who was successful with his first two ventures and “is a tremendous sales person,” is having that problem with his latest venture.

“If he wants to get value out of the business he’s building now when he sells it, he needs to build a sales organization and he’s either reluctant to do that or doesn’t know how,” Daniel says.

Letting go ‘a little’

He says entrepreneurs and owners often “get their strokes solving problems now and seeing immediate results. Building a sales organization, sometimes you don’t see immediate results. It’s an act of faith. You hire people you think can do the job and let them go.”

Another aspect of the problem is that while entrepreneurs have skill sets that work well with small companies, once the companies grow to 50 or 75 people, “you need a complete different set of skills and you don’t usually find both in the same person,” says Daniel.

“It all comes back to letting go a little,” he adds. “A perfect analogy for starting a business is raising a child. I have a teenager and I’m learning, you have to let go a little.”

The Daniel Group: www.thedanielgroup.com

New York Times Article: www.nytimes.com/2003/10/05/business/yourmoney/05prof.html <.a>