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Co-founders want me out

HI all,

Started my startup a few years ago with another co-founder. Put the money in with him ,bootstraped MVP, found the engineers tetc.

Then we brought on 3rd tech co-founder. He really accelerated the product to make it great. Tbh I took my foot off pedal during this period (circa 8 months). So we had some awkward conversations and I dropped my percentage in company from 33% to 10%. Then I was tasked with onboarding new users and retention (something i’ve never done and which is very difficult i’ve learnt). I set up onboarding flows in Intercom etc. Not converted loads, it’s something i’m refining.

Technical guy designs product, other hustles seed funding etc, all things that are tangible. I’m left with the hardest bit.

We are at app launch stage now – we’ve been web based and – & the original co-founder said he’d give my original investment amount back & I walk

– Do I walk?

– Do I dig in and stay at 10%?

– Do I say i’ll drop to 5% and just do support?

  • Staying and doing support/onboarding with cofounders that already resent your equity stake is just going to burn you out and waste your time. Giving up your stake after you spent years at the company you founded for some cash (not inflation-adjusted, not including the value you added to the company) is insulting. I wouldn’t stay, but I wouldn’t walk out without equity – you can make the cash back at another job, but you can’t get 10% at another startup so easily, especially after a lot of work and derisking.

    Reply

  • Totally agree. It’s a low blow for your co-founders to ask you to give up your equity before you receive a return on investment. 10% is already low for the initial bootstrap period.

    I’d hang in there at 10%. Also your investment % isn’t the same as remuneration for your role there. If they are so concerned about the fairness of the split, they should create employment contracts for themselves as CTO / CEO whatever, and pay themselves a salary before the profit. Hopefully, this will require your approval and a fair deal can be reached for all. You don’t have to take a job there and do anything, just keep the 10% until they give you a good enough deal to exit. If they are fair, they’ll realise they don’t need to split the ‘ramen profitability’ money, that can be split via the officially contracted roles, leaving your % for only the profit… which may never come.

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