111–120 of 435 posts
I don’t know if you can still delete this, but this is way too specific and way too many people read HN for your co-founder to not see this. I would email dang at hn@ycombinator.com to see if they can at least delete the body of this post. Please seek legal advice and the personal advice of contact you can trust that has angel investment experience if you have one.
puts a variety of other perspectives in public
worry about yourself
I'd say first things first. You have 11 months and a one year cliff. Find a way to stall for a month and your position gets much stronger. This is a great environment to find a way to stall. Tell your co-founder to write up a proposal so that you can have a lawyer look at it. That's easy to turn into a month of stalling.
As a new startup, I'd assume that the technical co-founder is doing a lot of maintenance and automation to keep everything running smoothly. Why not let something break, and then they'd have a stronger negotiation position? I can't imagine (but would be very impressed with tech co-founder) if a year old system could run without any maintenance for a month. Seems also unlikely that tech co-founder could be replaced fa…
These responses, my word.
Why does your co-founder want you to leave?
They're not enjoying working on the company together. 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.
Tell them to shove it. Something tells me your 40% is worth a hell of a lot more, otherwise they wouldn't be trying to screw you out of it. Lawyer up.
Do NOT sell. keep 40% of nothing, matter of pride first and for all. Secondly, they are more than likely bluffing. They don't want to put advertising that would generate 5k/mo means they are trying to make things look artificially worse so you leave and keep the rest for themselves. Don't fall for the 40% of nothing once you are close of making money. They just don't want to share the pie.
Hmm... a few objective points here: - If OP keeps 40% and doesn't do work for the company, the company is highly unlikely to succeed. The company needs to be able to dish out equity to future employees and likely investors to succeed, and having 40% locked up in an entity that doesn't do anything for the company is not going to be attractive to those future participants. - If OP keeps any equity, they should be doing…
Most important here, I think, is to act in polite and professional manner. It is not uncommon in these situations for everyone to lose because things get personal. Just try to find some kind of deal where you are likely to get some value.
Walk away. It's not fair, but starting a company isn't like getting a job. It's a relationship and a risk that doesn't always work out. Sometimes you find more money and success than you could ever dream of, and other times you waste 11 months.
Here's my thought process. You and your cofounder aren't going to be able to work together after this. The company has no money and no value, so you're trying to get your portion of something that doesn't exist. Them raising money to pay you just kills their chance at ever being successful... plus, who would give a company money just to pay someone out? Same goes for accelerating vesting on the 40%... there's no way they can build a company when someone not involved owns a huge stake.
You could spend time and money trying to right this injustice. And yeah, it is an injustice. But the worst thing you can do is tie your identity to this. There's not much upside to fighting it; all you'll do is spend more time, money and energy you could be using to start something new.
I've had this happen to me before, so I completely understand what it's like. You feel helpless and shitty and like you wasted a ton of time. Rather, do your best to put it behind you, and focus on what benefits you got out of it.
Did you learn about a new space that will make you extra valuable to another company? Even just having a founder mentality will raise your value to a startup. Did you learn things you would do differently? You can start another company, and do it better this time.
I know it sucks. But I'm 99% confident you won't get anything out of this, so it's best to just walk away. It's cheesy, but "success is the best revenge." Your relationship with this company failed, but you haven't. Don't tie your personal journey to this one company.
Good luck, and my emails in my profile if you want to talk!
(Also, a few years ago I wrote about going through it: https://medium.com/@gkoberger/five-years-time-6a6ae1157a66)
I'd say first things first. You have 11 months and a one year cliff. Find a way to stall for a month and your position gets much stronger. This is a great environment to find a way to stall. Tell your co-founder to write up a proposal so that you can have a lawyer look at it. That's easy to turn into a month of stalling.
As a new startup, I'd assume that the technical co-founder is doing a lot of maintenance and automation to keep everything running smoothly. Why not let something break, and then they'd have a stronger negotiation position? I can't imagine (but would be very impressed with tech co-founder) if a year old system could run without any maintenance for a month. Seems also unlikely that tech co-founder could be replaced fa…
Because this is the professional equivalent of shitting in your hand and throwing it at the wall?
The fact that an adult would suggest abdicating any professionalism and just letting a site with 60k users and investment backing start to break to prove a point is astounding.
Bad news: If the CEO wants you out, by default, you should leave. It won't work to stay wrt high-pressure collaboration & trust, and is a warning sign against continued growth. Worse, they are likely about to fire you over the equity + performance, and unless you have single-trigger, you get 0 equity. Even if you keep equity after you leave, 40% equity is too much 'dead weight' for professional investors to not press…
The difficulty is the CEO has a lot of flexibility in equivalent legal actions like firing the co-founder, issuing 10X more shares, and diluting the 40% to 4%. Even if the technical co-founder does successfully walk away with 40% today and things go well, investors in funding rounds years from now will still pressure them to do so ("why is 40% of the company shares dead weight? That should go to new employees!"). The situation stinks, as does the negotiation position.
Earlier quoted context omitted.
Basically: Were you negligent? Assuming you weren't, it's very strange to force someone out right before their equity vests. Basically, your lawyer can understand the situation better than an internet message board can. Then, a phone call from your lawyer to your co-founder could help make your co-founder become a lot more reasonable.
> it's very strange to force someone out right before their equity vests If the business-minded folk don't fully value the tech solution I can easily see this happening. This "devil's advocate" hypothetical is not an unheard of occurrence.