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Ask HN: How to fire your co-founder?

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Re: Ask HN: How to fire your co-founder?

#41

Post by bushido »

I apologize in advance, but since nobody else seems to have taken the initiative I will opt for being the ass_ole in this situation.

Before you go to the board (you ethically should) let ascertain a few things.

Are you sure he's an overrate person or is it just that you don't see the value in his input?

Some where in the thread you mentioned:

> It's going to get real messy, especially since he holds all money, bank, passwords info

Some credit needs to go to an individual who has taken ownership for responsibility of finances, considering the amount of onus that falls on the need to maintain finances optimally for a start-up, this can also be really stressful. If he has mismanaged finances, that's another story.

If he has not mismanaged the finances and has taken ownership/charge of these affairs you need to reflect on why you did not opt to share the burden.

Some people don't like managing finances, nothing wrong with that, but they do need people who'd do it for them, even better if there is a mutual need to succeed. Anyone can be the best money manager in hindsight.

> the 3 employees we have today respect him a lot especially since he's an expert

Respect is very important. Sure, the article says that the Overrated person can establish themselves as an expert, but believing this without a doubt also means that you don't trust the judgement of your first three employees.

Not saying you're wrong, but there is a possibility that you need to delve a little deeper on why they think your co-founder is an "expert".

> following those rules in the article

Not all rules apply all the time. Also these are not really rules but situational observations.

> The only problem I see here is that he has more rapport with them (the board).

Was he instrumental in helping you raise funds? Could you have raised the funds with a 100% surety without him if you were a single founder? Would this rapport help keep the faith of the stakeholders in the prospect of your success?

Maintaining and managing peoples belief in an idea or the people executing an idea is no easy task. Are you sure he has a zero percent contribution in any of these? And again are you sure you could have achieved a 100% of past results without him?

> He actually threatens the company's success if I ever try to "sneak a move" on him

Why would you try to sneak a move past anyone who has as much to loose as you, or even if it was a fraction thereof?

How does he threaten the company?

Does he threaten to leave? If you want him to leave, this solves your problem. But, if his leaving threatens the company, you should probably reconsider firing him.

Re: Ask HN: How to fire your co-founder?

#42

Post by MediaSquirrel »

I was in a similar position with my first company, but waited too long because we were such close friends. I view failing to fire him as my biggest mistake/failing as CEO of my first co.

If you want to talk, drop me a line here and we can hop on the phone. I have a strong opinion on this topic: http://mattmireles.com/contact/

Re: Ask HN: How to fire your co-founder?

#43

Post by cma »

greghinch wrote: post #9

This is why you have a board. And hopefully some decent legal documentation in place. Talk to them, lay out facts and the action you want to take, and just follow the documented process for things like board votes and such (again I hope you have legal docs in place, otherwise be prepared to get a lawyer and slog it out…). Sounds like you think the success of your company might depend on you getting rid of him, so jus…

Majority shareholders can't just vote to take away equity from minority holders. There are laws about minority shareholder rights. The OP better have some really specific agreements in place.

Re: Ask HN: How to fire your co-founder?

#44

Post by cma »

alan_cx wrote: post #39
ra3 wrote: post #34

Earlier quoted context omitted.

He likely has a clause in the employment agreement preventing him from competing in any way. Pretty standard

Well, yes. Except, with his leaving, and assuming all the important people, etc went with him, what would the remaining co-founder have left to be competing with? Then what resources would the remaining co-founder have to go through the US court system? Lastly, leaving and re-starting doesn't have to mean the exact same product. I know what you are saying, but Im pretty sure it could be side stepped with some creativ…

>Then what resources would the remaining co-founder have to go through the US court system?

To bet on this would be to bet on the new company being a failure.

Because if it ever does become successful, plenty of lawyers would be willing to work on behalf of the ousted cofounder on contingency.

Re: Ask HN: How to fire your co-founder?

#45

Post by reeses »

mesogamer wrote: post #23
badclient wrote: post #4

If I talk with my boards on his misbehaviour it will get them stressed and stop believing on the company Sorry dude, looks like that is precisely what you are going to have to do. Don't worry about the board stressing; they can handle it. That's their job. Focus on YOUR job: the success of the company. The board will stop believing you when you prolong this longer than you should have, actually making the situation m…

Thanks for the advice. I might go with this one after holiday ends. The only problem I see here is that he has more rapport with them (since I'm more product oriented and he's money oriented). It's going to get real messy, especially since he holds all money, bank, passwords info (now I understand why he wanted to take control of those stuff in the beginning). Firing him will be so messy, and the 3 employees we have…

I would recommend that anyone else reading this take note: you need someone on the board who is your ally. You can't let your partner fill it with his own people.

Re: Ask HN: How to fire your co-founder?

#46

Post by 7Figures2Commas »

Perhaps what you have is worth fighting for, and you will therefore be willing to incur significant costs (in time, energy, opportunity and likely money) battling your co-founder. But I think you should consider the facts you have presented in your question and responses to other comments:

1. Your co-founder has the same level of ownership as you.

2. He controls the company bank account, passwords, etc.

3. His relationship with the board is stronger than yours.

4. Your employees like him.

5. He is aware of your desires and has made it clear he is willing to fight your efforts, apparently even if it means sabotaging the company.

Given these facts, I think it would be wise for you to consider what you can realistically achieve even if you are successful in removing your co-founder. You may find that the question, "How do I fire my co-founder?" is not the first one you should be asking yourself.

Re: Ask HN: How to fire your co-founder?

#47

Post by beachstartup »

> I already talked to him about lowering his share options (which he currently holds about 40%, (same as me, after seed round dilution))

if you're a co-founder and all you have is options and not a significant chunk of real equity, i'd say the problem is not that he isn't pulling his weight, but you (that's you, not him) got short-changed for the amount of work you are doing. and you are probably upset about that.

if he's a CFO/money type that's been charged with fund raising, money management, records, dealing with vendors and HR, etc, his compensation (no actual equity?) is probably correct, or even under-valued.

in which case, if you go to the board, you are going to be forced into a position of justifying why you want an increase in compensation for your work, instead of lowering his compensation for the work he's doing.

these are the kinds of things you learn so that your 2nd and 3rd time around are easier.

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