Any advice on how to part with a potential equity of a startup who is vested based on performance of which is not performing!

I am about 8 months into a startup venture and everyone that is a part of the company have performance-based milestones to reach before their equity is vested. I have one such person not pulling their weight and/or not delivering what he said he could. I find it prudent to cut him from the team. Any advice on doing so?

  • There’s a problem here. I assume you are the main founder. Being here and have to ask a question with one simple solution gives me an impression that YOU are note capable of leading a venture. Find a leader. That’s your answer.

    • That’s not a very productive response. He/she clearly hasn’t been in a situation like this before, and this is the place to ask questions without being judged.

      To answer op – have you talked to this founder about any of these issues? You could give him/her a few more months to prove themselves assuming no more equity vests during that period. Otherwise, you just need to sit them down for a serious conversation and tell them that given the stage of your company you’re realizing that you need someone in his position with a different set of skills.

      Now, this of course assumes that you’re the CEO/majority stock holder and can actually make this decision. Bottom line – if you’re not comfortable with this person cut the cord now before it’s too late.

  • I’ve had similar issues with poor staff performance. What worked best for me was to go to lunch or spend some time with that person and ask them how they feel things are going. Essentially, conduct an appraisal with them. Ask them what parts of their work they enjoy/dislike. What are they proud of? Check to see if there are any problems at home? I had a particularly difficult time with an employee who has since been working very hard. It turned out that he was splitting up with his fiancé. Another had money worries and another had a change in some drugs he was being prescribed by a doctor. Start an honest and open conversation with him in private over lunch or after work and see what he/she says.

  • You have to decide quickly if the performance issue can be resolved with coaching or if there truly is not a good fit here. Problems with work ethic, honesty, judgement, values cannot be resolved with coaching. The first 10 people in the company shape the culture to come. Fish or cut bait but do it quickly. No one ever said, “wow, I’m glad we waited so long to fire that guy”

  • Make sure he knows what his milestones are and that he has not been meeting them for some time. Then let him go. You can’t afford dead weight and you have lost trust in him. Keep it professional and you will both be fine.

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