We all know someone or the other who has struggled with this question. I have seen teams going through a tussle because of this. I have seen founders moving on from the company because of silly fights, and in most of these cases, this question has at least a tiny role to play in the ugly breakup.
There are a lot of points that need to be addressed here; will try to talk about them one by one:
“Originally the idea was mine” — That, my friend, should be having no bearing in deciding who the CEO should be.
“I had industry knowledge and used personal savings to get initial concept started” — The only place where industry knowledge becomes an ‘immensely great asset’ is when you are in the field of research, and even then the “industry expert” is exactly that — an industry expert. The industry expert does not seek to be made the CEO or deserve to be made the CEO just because he knows the basics of the industry. The roles of a CEO are much bigger than that. Every company needs an industry expert — either via one of the founders, or a lot of research, hard work and grit, or by taking on advisors who are industry experts. So that point shouldn’t be a deciding criteria. Now, let us talk about you pooling in the initial capital. Sure, that is an important consideration, but not for the sake of this discussion. In my opinion, what that should entitle you to is not the title of the CEO, rather a bigger share in the company as compared to the other cofounders. (You can even discuss this with your co-founder right now. People are typically more reasonable and amenable to just arguments than we expect them to be.)
“We finally have the real company, product/market fit” — No you don’t! From what you have described, the company is still in too early an stage to pass on a verdict of having found the product/market fit. I have seen companies pivot and change their whole product and business models at much more mature stages as compared to where you are at currently. [Was this point related to your answer — No! But it was necessary to be addressed because if you have wrongly come to believe in having found the market fit, then boy-oh-boy, it could possibly be way too detrimental for the company. You would be making mistakes and not even try to explore if things are going wrong on this one particular front because you would be convinced of having hit the sweet spot here.]
“We both want the CEO title” — Tough! It isn’t a game of cricket that both captains want the first chance to bat. “Want” should not even have come up in this discussion, or your question. All that shows me is a slight level of immaturity at your end (and may be in your partner too).
“I have been responsible for every pivot up until this point” — Are you telling me that he hasn’t been pulling his weight in the business decisions? Because if he is, then you haven’t been responsible for every pivot. Sure, you could have been the one pitching the ideas or leading the efforts, but he has been equally responsible. And if he hasn’t been pulling his weight, then why does he have 50% equity in the firm? Actually, check that. Why does he even have the title ‘co-founder’ next to his name. [The reason this line irks me — it somehow gives me an impression that you are downplaying his contributions here, or at least that the dynamics between you and your co-founder is on a shaky foundation. Why is it important to understand this? Because it is still too early, and you should fix it before this friction starts harming the company]
“Have made few investor relations” — All those relations combined together account to a BIG FAT ZERO! Unless those relations have resulted in you seeing a cheque coming your way, they are as useless as the relation I have with my barber.
“Currently I pitch the company whenever needed and am responsible for product management and what I believe to be the strategic marketing of the company. Several times when my partner was ready to quit I convinced him to stay etc.” — Now this is the first time you have actually said something that would back up your claim of you being the rightful CEO. Though it is not the ideal description of the CEO candidate, but sure — it is in the ballpark. So yeah, some brownie points for your candidature here.
“I know that I am most likely not going to remain CEO after funding” — Huh? What? Immediately after scoring a homerun (almost) with that last point you are going to say something as baffling as this? If you do not believe you are the person who would be leading the company in the long run, and who has what it takes to take the company where it deserves to be present at, then my friend, you are most certainly not the right guy for the role. [But that doesn’t make your partner the right guy for the role either. All this point means is that you probably aren’t the right one.]
“My partner is poor with communication skills and struggles with self confidence” — He could be poor with commskills, which would be a definite downside if he is planning to lead the company. But I don’t think he would be struggling with self confidence (you could be a much more aggressive and confident guy as compared to him, but that isn’t the same thing as him suffering from lack of confidence). The sheer fact that he is working on this as an equal co-founder demonstrates the kind of confidence he has in himself (as well as in you and the business).
“Who doesn’t want to be CEO?” — Not a good enough reason. But if that is the question, then here is an answer for both of you — anyone who can’t bet his life on being the right candidate for the captain of the ship SHOULDN’T want to be the CEO. It isn’t a role, a title, or a position of power; it is a position of responsibility. And if you are not up for the challenge, then please have some respect for your business. Your business is bigger than your partner, you, or the combined egos of the 2 founders.
So who should be the CEO?
The person who has the answer for everything, or at least is aware of the challenges the business is going to face, so that he, and therefore the business, is not caught with his pants down (even if he hasn’t been able to figure out a way to mitigate those challenges).
Someone who can keep the team energised and motivated — working towards the broader vision of the company. [I would have loved to say that this person is you, but your business is at a fairly initial stage. You wouldn’t have had the chance to even evaluate yourself on this parameter. You managing to stop your partner from quitting is a good start, but believe me it doesn’t even come close to what it takes to keep a whole workforce motivated]
Someone who can get you out of the trenches, no matter how bad the scenario is. Sure, the whole team would be putting their backs into it, but it would be the CEO who would be guiding the way.
Someone who can take difficult decisions, no matter how hard it is.
Someone who is always shredding down the business model/strategy — putting holes into them, only to plug them up later.
Someone who plays more than just one role time and again. I have seen CEOs who have been the person behind the product design, marketing communications, strategic alliances, merchandising, sales, operations etc. A CEO needs to put on a lot of hats from time to time. He is always a jack of all trades and master of more than some.
I could go on, but this should give you a fair start.