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Ask HN: How to get rid of a co-founder

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Re: Ask HN: How to get rid of a co-founder

#31

Post by smt88 »

nandorsky wrote: post #28
smt88 wrote: post #16

Earlier quoted context omitted.

...unless that's something OP could be sued for. There's no way to know without reviewing the communications and agreements (either verbal or written) between the two founders. Which, again, is why it's insane to try to get legal advice from internet strangers.

You need money to sue. Unless the company is worth millions it would be financially irresponsible to sue over something that has no value.

OP is pursuing this because he expects the company to have value someday, which means the potential for a lawsuit is a problem.

Re: Ask HN: How to get rid of a co-founder

#32

Post by kkotak »

If you think the project is still viable, has potential to make money, and you can find another non-tech partner - Draw up a contract rewarding him fairly with equity for the work done. Move on. A reasonable new partner should/will understand and appreciate your fair, mature way to get out of a difficult situation and pushing on and you both will stay out of future litigations.

Re: Ask HN: How to get rid of a co-founder

#33

Post by gtf21 »

scandox wrote: post #27
gtf21 wrote: post #19

Earlier quoted context omitted.

What is this anecdote supposed to tell the OP? I can only assume that the intent is to imply a link between this man's advice and his wealth, but data isn't the plural of anecdote.

Well I'm just relaying the advice of a somewhat successful man, which I didn't take. But to expand I think what he meant was if you're confident that you can do it and you mean to do it, then don't halve the responsibility. Take it all.

I really don't agree. I'm pretty confident in my ability to do what I do, but having a cofounder has given me a useful critic (amongst other things). Having gone through this stuff, I would have wanted to have done it on my own. *

> just relaying the advice of a somewhat successful man

This is a fallacy. Unless it's backed up by really good reasoning, I wouldn't take someone's advice seriously _simply because_ s/he has been successful at _something_. There are too many factors at play and way too much context to make it meaningful unless it obviously translates to the situation at hand. I can't think of a plausible reason why having a business partner is, 100% of the time, a bad thing (which is what is suggested in this anecdote).

* caveats: "having a cofounder" is obviously not a panacea, and may not be a good thing if you don't have the right relationship (which seems fairly clear from the OP)

Re: Ask HN: How to get rid of a co-founder

#34

Post by naivedeveloper »

nandorsky wrote: post #26

Is your company generating revenue? Is it worth anything? Unless you're talking about equity split in a company that is worth millions engaging with a lawyer is a waste of money. I wouldn't even waste time trying to re-engage him. If it's this early in the game and he is already checked out and it will only get worse. Sure, he may re-engage for a little but he'll go back to his ways in a matter of time. You have the…

No, we're not generating revenue. This is actually why I want to resolve this issue now. If we launch with him having not really done much of anything in the last 6 months and we do have revenue he's going to be entitled to it.

Re: Ask HN: How to get rid of a co-founder

#35

Post by skraelingjar »

I can empathize, OP. I started a company with a good friend almost a year ago. I run tech, he does business. A few months in, and I moved 1000 miles away and have been building a client base on my end, while he has done nothing to help us grow in his location. However he has done his part outside of that. We had a frank discussion and decided while we're happy to work together, this isn't something he's interested in pursuing. I paid him back everything he's invested in the business. We agreed that instead of splitting it 50/50 I would pay him a flat fee to continue what he's doing while I take the rest. Keep in mind we're doing less than $20k/yr in sales. I considered removing him from the legal structure but it's not worth my time.

Like with any relationship, you need to talk about it with your friend. Not what you've done by "alluding to it", but by being straightforward. "You don't seem interested in our company. I don't want to continue like this. Is it time for you to leave the company?" Yes it may be a difficult discussion but can it really be worse than what you're putting yourself through right now?

Re: Ask HN: How to get rid of a co-founder

#36

Post by gnicholas »

naivedeveloper wrote: post #8
cocktailpeanuts wrote: post #6

It doesn't sound like you actually have a "company". Or do you? If you didn't incorporate yet, then you owe each other nothing. Maybe your friendship will end, but that's still separate from an actual business. Then again, I don't know if you yourself are that committed either. A month and a half off from work to prepare a speech means you're not fully committed. If this was because he's not doing much work either an…

Thanks for your reply. No, we do not have a company. We delayed incorporating to avoid expenses before the product was ready. Now that the product is close to being ready I'm fine with incorporating, but don't want to do so if my co-founder isn't invested. > Then again, I don't know if you yourself are that committed either. A month and a half off from work to prepare a speech means you're not fully committed. No, th…

You could incorporate, both contribute all of your valuable IP and whatnot, and receive shares on a vesting schedule. As part of incorporation, you establish ground rules for number of hours spent on the project or milestones to hit, such that either of you can be let go (and halt vesting) if the targets are not hit.

This will not be inexpensive to set up (a couple thousand in legal fees), but if you're ready to launch and want to clean up your legal situation, it could be worthwhile.

Right now you would likely be considered to have a partnership, and you each have rights under that (which vary from state to state). If you go off and build this on your own without a document that your friend has signed, you'll be on shaky ground if he/she comes back after you've become successful. For what it's worth, I am a former lawyer (but never specialized in this particular area of law).

Re: Ask HN: How to get rid of a co-founder

#37

Post by scandox »

gtf21 wrote: post #33
scandox wrote: post #27

Earlier quoted context omitted.

Well I'm just relaying the advice of a somewhat successful man, which I didn't take. But to expand I think what he meant was if you're confident that you can do it and you mean to do it, then don't halve the responsibility. Take it all.

I really don't agree. I'm pretty confident in my ability to do what I do, but having a cofounder has given me a useful critic (amongst other things). Having gone through this stuff, I would have wanted to have done it on my own. * > just relaying the advice of a somewhat successful man This is a fallacy. Unless it's backed up by really good reasoning, I wouldn't take someone's advice seriously _simply because_ s/he h…

I'm not arguing. I'm "relaying". He's more successful than I am. He gave me the advice. Looking back I regret not taking it for a variety of reasons. Everybody's going to be different.

Re: Ask HN: How to get rid of a co-founder

#38

Post by naivedeveloper »

jkaarma wrote: post #25

With my startup just last week we concluded a deal where one ot he co-founders lost his substantial stake in the company and retained a very small percentage of the company. We've been working on the company full time for a year now. The mistake we made was that we didn't make a shareholder agreement in the beginning when we started out that would clearly outline the responsibilities of each person and what they woul…

If you don't mind, what is the percentage that you gave him? Part of my really hates the idea of giving any stake, but if that's what it takes...

Re: Ask HN: How to get rid of a co-founder

#39

Post by bmh_ca »

nandorsky wrote: post #26

Is your company generating revenue? Is it worth anything? Unless you're talking about equity split in a company that is worth millions engaging with a lawyer is a waste of money. I wouldn't even waste time trying to re-engage him. If it's this early in the game and he is already checked out and it will only get worse. Sure, he may re-engage for a little but he'll go back to his ways in a matter of time. You have the…

> Unless you're talking about equity split in a company that is worth millions engaging with a lawyer is a waste of money.

I disagree. The company doesn't need to be worth money now for engaging with a mediator or getting legal advice to have value.

For example, a proper Full and Final Release, mutually agreed upon, can not just save you a fortune in future litigation, it can free you to seek investment in a future venture without the fear or need to disclose past stakeholders, and give peace of mind to work knowing that it won't be derailed by skeletons in the closet.

The spectre of litigation can at-best cloud your optimism, at worst undermine your prospects; it can be a weight upon your every move.

As time passes, the natural human bias is to over-value their past contributions, and undervalue the past contributions of others. The longer the time passes, the greater the bias. If you succeed, the more likely they are to demand what they feel they deserve, from their perspective.

They might be the type of personality to let it go; but if they are litigious, it's better to know it before there's real money on the table. If they're not litigious, they won't mind signing a release or making a deal.

Every situation is different, but getting legal advice isn't just about the money at current value, it's about the price of potential litigation, your peace of mind and ability to produce in the future, and the cost of the spectre.

Re: Ask HN: How to get rid of a co-founder

#40

Post by dsr_ »

Offer him a buyout based on the first year's revenues. Or a flat fee, but delayed until you have revenue to pay for it. Or anything, really, but make it clear that you don't think he's as committed as you are to this, and you want to take the risk and gather the reward.

And if he says no, dissolve the whole thing and go find something else to work on. Odds are good you would have pivoted to something else anyway.

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