Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

Yeah - I don't see how people can tell them to just give up.

Go scorched earth - what do you have to lose? Know the other guy is hostile and don't trust them to do the right thing. Consider your options outside of that and talk it over with the other investor.

If you're the technical cofounder here you're probably in a stronger position to negotiate.

If you can get the other investor to see what's happening here (your cofounder pushing you out one month before the cliff after you've helped to build things up) you may be able to get them on your side.

As I see it without knowing details:

- Either your contributions are real and your cofounder is a miserable person trying to screw you out of it and risking the company in order to do that.

- Or you haven't done anything substantial and the cofounder wants you out. Even in this case it's still wrong of them to do this one month before vesting (and the way they're approaching it sounds dishonest, they should be direct).

If it's truly the former I think getting the third investor to understand this is key, if the non-technical cofounder is risking the entire business at this stage they're going to be bad going forward - you probably need to get rid of them.

If it's the latter (which seems unlikely since the other cofounder is non-technical) you'll still want to negotiate a reasonable exit, but it may be harder to do so (and you'll probably need a lawyer).

I don't think it's really a solvable problem. There's a very wide range of hard-to-predict outcomes, from total failure to massive wealth, with a lot of just-bumping-along-for-years scenarios. The value of money varies drastically over time. The people involved are generally novices. Labor and skill contributions are impossible to predict in advance. Social conventions and ties add more layers of difficulty. What everybody is doing is essentially buying lottery tickets. And any serious dispute resolution can be more expensive than makes sense early on.

So what the industry has mostly converged on is a pretty basic, simple-to-understand solution that has a small enough number of dials that people can work it. It covers the main outcomes reasonably well if people are not too terrible. And if people are terrible, well, no mechanism is really enough.

You must get a lawyer now. Below us my thoughts given several decades experience As founder-

You have a strong position here, since you built the products. Don’t walk away. The ultimatum is counting in you being non-confrontational and wanting to cave.

This cofounder has betrayed your trust at this point, so some sort of exit is needed. Non-technical is a lot easier to hire- you can get marketing or whatever expertise he has easily.

He should be the one leaving. Maybe offer to buy him out at current equity value paid over 20 years at %6 interest, secured only by company stock.

If he forces the issue he will destroy the company in the ensuing lawsuit. So this is a mutually assured destruction situation.

What is the ownership of the software? Did you retain rights to it? If you are forced out can you recreate the company quickly using the software you already created?

Get a lawyer, now. You need an advocate who is ready to play ball and who can be the “bad guy” for you.

Your cofounder will likely try to spin it, try to portray any resistance from you as evidence of bad faith, etc. Don’t let him.

What about the third option which is you building 100% of a competitor who knows how everything works and can compete effectively?

I strongly agree. Find a lawyer, find a lawyer, find a lawyer. To the OP, if you're in California, I'm happy to recommend mine. Adam Slote of Slote Links and Boreman, slotelaw.com. 20 years back somebody was trying to screw me over; he charged me $500 for a solid "don't fuck around or you'll regret it" letter. They paid up instantly. Since then he's been great a dealing with my startup stuff both as an employee and as a cofounder. And much of his work is in litigation, so if you do end up suing, he's the right person for it.

I also agree that the 1-year cliff is absolutely not standard for founders. Last time I did it, I had a 4-year reverse vest with no cliff at all.