It's too late for this idea in this situation, but it might be of interest to others thinking about getting into a partnership. Because most partnerships eventually go south, there is something known as the "Shotgun Clause". (I don't know who named it this, but this is what I've always known it as.) If your partner wants you out and comes to you with a lowball offer, you can invoke the Shotgun Clause, which gives you the right to buy him/her out at exactly the same terms, and THEY HAVE to accept. It's the risk they take by making an offer. It's designed to get them to make a "fair" offer, or one that they would accept.
Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
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Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#62Do not sell. He’s trying to push you out since it’s primed to blow up. If it becomes 40%of nothing let me know and I’ll build it with you. I’m a full stack entrepreneur who can sell and build. The only real threat that I’ve seen brought up is if he can fire you.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#63It sounds like he’s trying to push you out before it blows up. Don’t sell. If you end up with 40% of nothing hit me up. I’m a full stack entrepreneur who can build and sell.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#64The problem with your ask is that early stage capital is for growing the business, not liquidating founders, and investors are not interested in giving anyone cash to liquidate a founder. Additionally, your valuation is currently underwater and even that is assuming a functional founding team.
It's not OP's ask!
Please explain more what you mean about the valuation being underwater. I don't understand how that is, nor how that is even possible.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#65Sorry to hear you're going through this. I went through something similar and it wasn't fun. As much as you have shareholder agreements etc. none of that matters too much if the business fails and so it's basically about what the two of you can negotiate. In my case, I've paid off a former business partner much like a loan. You can negotiate all sorts of parameters on this: monthly payments, grace period, cash trigge…
This seems like the most realistic and likely answer. My co-founder hasn't really been budging so far and I feel like they don't fully understand the situation. They think that because it was their idea that they are entitled to a lot more than me. One issue for me is that I don't have that much faith in them being able to execute on the company vision by themself, e.g. they don't want to monetize right now or do a r…
Have them pay you with a loan and then start a competitor.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#66Not experienced in this by any means at all, but I still am interested in what are the legal, social, and professional responsibilities here. Legally, you are entitled even though the market is no longer the same as which you were brought to help in. Professionally you have put in lots of un-tallied TLC. Socially, there seems to be no effort for an amicable resolution. On the business side it doesn’t make much sense…
> Legally, you are entitled
He's not. He's 11 months into a 12 month cliff.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#67Can you expand on why they want you out and what happens if you stay?
We've spoken a fair bit and they don't have anything specific to say. It's mainly that they don't like or want the stress of working on a startup, and want to run it more as a lifestyle business.
lol! too late for that! he took seed money.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#68Your co-founder wants to profit from 11 months of your life and leave you in the gutter. 11 months is about 2% of your entire adult working life.
Don't give in to anything. The guy is a crook.
He should have proposed the paltry 3% before you dedicated 11 months of your life on the business.
At the very least he should offer to pay you a market salary for the 11 months you worked. He could take out a loan to pay you.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#69It's important to see if you are before or after the cliff. If before then depending on your employment agreement and other docs there could be a scenario where you are fired/let go and get 0% shares. Your last round valuation was $1,000,000 post so that price would be $141,000 or so for your 14% stake, can include some triggers on when that occurs that doesn't impede the business (ie $xm raised, $y profits). If not…
he is a cofounder not an employee
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#70If you are at your cliff you might want to buy time saying you will take a bad deal but need to run it past lawyers or whatever to make it past the cliff. Then you can have a change of heart after they can't take it by force.
Also this goes to show why you should not take a cliff if you see yourself as a founder.