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Fight between cofounders

1 points by debarshri 10y ago

Me and my cofounder have been working on a product for a while. We recently had a dispute over share split as he think he should own more since it was his idea. I was wondering how do people resolve such kind of early disputes in an amicable way. Furthermore, is it worth fighting with cofounder or just quite and pursue it all alone?

runesoerensen 10y ago
Unequal equity splits is one of the most common reasons for disagreement between co-founders. It's almost always a mistake caused by lack startup experience and knowledge of what it takes to build a successful company. I highly recommend you both read this article on the subject: http://www.themacro.com/articles/2015/12/splitting-equity-among-founders/ http://www.themacro.com/articles/2015/12/splitting-equity-am... Perhaps that will help you reach an agreement or part ways if that isn't possible.
ruler88 10y ago
There are often good reasons to have unequal split, having the product idea is NOT one of them. Ideas are a dime a dozen, and they are basically worthless without the execution ahead. If the cofounder can give you a clear execution edge, then the said cofounder might deserve a higher share. Some examples include: 1) Existing business relationships with potential clients 2) Experience starting and selling startups (which gives you a big edge in raising capital) 3) Commanding expertise in the domain that you are in (i.e. start a video company with a hollywood producer) 4) Specialized technical knowledge (i.e. one of few PhDs in the world who knows how to build autonomous vehicles)
- runesoerensen 10y ago
  All founders of a startup should bring something to the table and be able to carry their own weight. It doesn't matter if one founder has a clear edge in selling a company if there is no company/product to sell due to a lack of founders with the knowledge and expertise required to make it. If it's very difficult to define the "execution edge"/value of someone then that person probably shouldn't be a founder, or the other founder(s) undervalue that person. In either case this should be a major red flag. I fully agree that being the idea man is a bad reason for unequal splits. I'd also be more optimistic about the chances of resolving that issue vs the issues related to an undervalued/incompetent founder.
endswapper 10y ago
I think the comments that precede mine are valuable and should be the basis of your decision. I can offer a relevant perspective because I pursued my startup solo. I have said for a while that if anyone asked my opinion my response would be, "don't do it." My understanding is that Y Combinator prefers teams as opposed to solo founders because of the amount of work and the truly gut-wrenching process of bringing anything to market. I agree. I am fortunate because I am married. The strength of will not just to weather the storms, but to remain focused, positive and productive is a shared contribution with my wife and I. She has no interest in being considered a founder, but the value of her contribution in that regard, is indisputable. Even with a great support system and a decade of experience in my field everything took longer. When there's a "million" things to do and nothing else gets done while you are doing something it's easy to lose heart. So, I would recommend valuing the partnership beyond your individual contributions (assuming it is effective/satisfying/pleasant - aside from the split discussion). My personal opinion is that a quality partnership is worth 5-10% difference.
red_blobs 10y ago
Is his contribution just the idea and you are building the product out? I won't partner up with an idea person anymore. I have found that they always feel entitled to more of the equity and I suspect it's because they are insecure about their own abilities (which usually ends up being something you can do yourself). I will, however, partner with an idea person if they also offer a sizable investment into the company. Your cofounder should be bringing something to the company. Either money, connections in the industry, or some other type of skill. If you are both developers or one person has just the idea, you will run into issues at a later stage in the development of your company.

1 points by debarshri 10y ago

runesoerensen 10y ago

Unequal equity splits is one of the most common reasons for disagreement between co-founders. It's almost always a mistake caused by lack startup experience and knowledge of what it takes to build a successful company. I highly recommend you both read this article on the subject: http://www.themacro.com/articles/2015/12/splitting-equity-among-founders/ http://www.themacro.com/articles/2015/12/splitting-equity-am... Perhaps that will help you reach an agreement or part ways if that isn't possible.

ruler88 10y ago

There are often good reasons to have unequal split, having the product idea is NOT one of them. Ideas are a dime a dozen, and they are basically worthless without the execution ahead. If the cofounder can give you a clear execution edge, then the said cofounder might deserve a higher share. Some examples include: 1) Existing business relationships with potential clients 2) Experience starting and selling startups (which gives you a big edge in raising capital) 3) Commanding expertise in the domain that you are in (i.e. start a video company with a hollywood producer) 4) Specialized technical knowledge (i.e. one of few PhDs in the world who knows how to build autonomous vehicles)

runesoerensen 10y ago
All founders of a startup should bring something to the table and be able to carry their own weight. It doesn't matter if one founder has a clear edge in selling a company if there is no company/product to sell due to a lack of founders with the knowledge and expertise required to make it. If it's very difficult to define the "execution edge"/value of someone then that person probably shouldn't be a founder, or the other founder(s) undervalue that person. In either case this should be a major red flag. I fully agree that being the idea man is a bad reason for unequal splits. I'd also be more optimistic about the chances of resolving that issue vs the issues related to an undervalued/incompetent founder.

endswapper 10y ago

I think the comments that precede mine are valuable and should be the basis of your decision. I can offer a relevant perspective because I pursued my startup solo. I have said for a while that if anyone asked my opinion my response would be, "don't do it." My understanding is that Y Combinator prefers teams as opposed to solo founders because of the amount of work and the truly gut-wrenching process of bringing anything to market. I agree. I am fortunate because I am married. The strength of will not just to weather the storms, but to remain focused, positive and productive is a shared contribution with my wife and I. She has no interest in being considered a founder, but the value of her contribution in that regard, is indisputable. Even with a great support system and a decade of experience in my field everything took longer. When there's a "million" things to do and nothing else gets done while you are doing something it's easy to lose heart. So, I would recommend valuing the partnership beyond your individual contributions (assuming it is effective/satisfying/pleasant - aside from the split discussion). My personal opinion is that a quality partnership is worth 5-10% difference.

red_blobs 10y ago

Is his contribution just the idea and you are building the product out? I won't partner up with an idea person anymore. I have found that they always feel entitled to more of the equity and I suspect it's because they are insecure about their own abilities (which usually ends up being something you can do yourself). I will, however, partner with an idea person if they also offer a sizable investment into the company. Your cofounder should be bringing something to the company. Either money, connections in the industry, or some other type of skill. If you are both developers or one person has just the idea, you will run into issues at a later stage in the development of your company.