It is important to remember that even late-stage investors are looking to invest in the entrepreneur as much as the company. It is the entrepreneur who decides (or at least, should decide) when and how to run one’s fund-raising process. That means deciding the amount to be raised, valuation, identity of the investor, etc. Certainly one’s existing investors will have views on each of these but the entrepreneur should be the face of the company when talking to investors.
If you accept all of this, then it should be clear that late-stage investors will not want the entrepreneur to take the back seat when it comes to making decisions post-investment. Really the only reason for an entrepreneur to find himself side-lined is sub-par performance — and if that does happen, your shareholding has nothing to do with it.
This being said, this is ultimately a personal decision. If it turns out that you do not feel comfortable answering to several investors or if starting another venture from scratch feels more exciting than guiding your current venture further forward, you can certainly consider handing over the reins to someone else. This is not that unusual a decision. However, be aware that, for better or for worse, the future value of your shareholding depends on someone else’s performance from that point on.
This is a cross-post of my latest column answering entrepreneurs' questions for Yourstory.com.