Does it work when a developer is the project manager's boss?

Question

I am in the planning stage of a project and I am looking to hire a project manager. I would like to do some coding and keep eye on all parts of the project. However, i have a feeling that a project manager will get better results. I have the following options: 1) manage the project and not code 2) hire a project manager and code myself

I am worried that the project manager will feel impeded by having the project owner in the development team. If I run the project, the team might fall apart causing the project to fail. To stick within budget, I have to be involved in one capacity or another.

Does anyone have experience with this situation, any suggestions?

more info: 4 in-house developers each responsible for a specific area. The developers can also outsource work if agreed to by the project manager.