Today’s SiliconValley.com includes a nice article on Yahoo!’s Jerry Yang, moving a little beyond the current acquisition discussion and looking a little more deeply at who Jerry is. He has done some amazing things, and he is without question an inspiration to many, engineers and non-engineers alike.

I have no official comment on the current Microsoft-Yahoo! situation, but one thing has become incredibly clear to me in watching the whole episode unfold: we are getting a rare look, on a grand scale, at a psychological phenomenon that usually occurs sometime around an A or B funding round, and not to a public company with well over a decade of history: we’re watching a classic case of Founder's Syndrome, writ large.

“Founder's Syndrome” is well understood among most people in the startup community, and yet its continued prevalence among CEOs suggests that the extreme difficulty in “letting go” is a deeply rooted psychological phenomenon. It is also clear that in order to launch a startup in the first place it often takes the exactly the personality types most likely to suffer from Founder's Syndrome. You know the type: the company is their “baby,” and they’ve put everything on the line for their “baby.” So when the company sees a little success (early customer traction, seed investment, etc.) there is a natural feedback loop that tells the entrepreneur “the way I’ve been doing things is being rewarded” which—in the early stages of Founder's Syndrome—then becomes “the way I’m doing things is the right way.”

In the best cases, founders recognize their own strengths and let others step in to provide leadership as the company grows. In a few cases, founders are able to grow with their company, surrounding themselves with good advisors, listening and learning along the way. In the worst cases, however Founder's Syndrome sufferers create bogey-men of many stripes, largely based on intuitive, rather than rational, thought processes, sometimes driving whole companies into the financial or strategic reefs while trying to avoid a sea of opportunity (which has its own uncertainty) that they view as holding the greater danger.

In most cases, this issue gets confronted during the first or second major round of funding, where investors and advisors try to position the company for growth by installing leaders who know that particular section of the road well. In Yahoo!’s case, Jerry Yang originally did a good job in letting more seasoned leaders take the helm around the time Sequoia started backing them in 1994/1995.

Now, so many years later, one would have thought that Jerry Yang had managed to dodge Founder's Syndrome. For better or worse, he sure looks to be suffering from it now.