A guide for founders: Before Co-Founders Fall Out
What co-founders should settle while they still agree.
What this guide covers
What this guide covers
What this guide covers
Splitting in a hurry
A quick equal split has a cost
In 511 ventures, equal splits went with lower first valuations, most of all when decided quickly.
Four things to settle
Settle four things in writing
Agree roles, decisions, equity and what happens when someone leaves.
- Roles who owns which work
- Decisions who decides what
- Equity shares and vesting
- Leaving what a leaver keeps
Breaking a tie
Decide how you break a tie
Name who has the final word in each area before the first deadlock.
- Product the CTO decides
- Sales and hiring the CEO decides
- Raising money both must agree
- A tie hear the mentor, then the CEO decides
If someone leaves
Vest founder shares too
Shares earned over time mean a founder who leaves early does not keep everything.
- If one of us leaves in year one, what do they keep? Agree it now, not when it happens.
- Who can buy back the shares, and at what price? Write the formula, not just the intent.
- What if one of us goes part time? Name the hours that count as full time.
Two kinds of conflict
Argue about the work, not each other
Across 116 studies, personal conflict hurt team results; disagreement about the work did not consistently.
A monthly check-in
Hold a monthly founder check-in
Teams that did well had trust, respect and an open way to raise conflict.
- Is the split still fair for the work?
- Which decision is stuck?
- What bothers you that you have not said?
- What do we change in writing?
Asking for help
Bring in your mentor early
A mentor can run one meeting with both of you before positions harden.
- Your mentor runs one joint meeting
- A lawyer writes the founders’ agreement
- The program team if the program is affected
Mentornity in Claude and ChatGPT
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A preview before every change
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Disconnect any time
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Connect it once
Add Mentornity in Claude, ChatGPT or another MCP app, then sign in.
Ask in your own words
Plan meetings, fill in a tool or form, find a mentor, reply.
A preview before every change
The assistant shows what will happen; nothing changes until you say yes.
Disconnect any time
It sees only what you see; Settings shows what it did recently.
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Write what you want to reach and rate it at each check-in.
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Set your goals
Write what you want to reach and rate it at each check-in.
Badge courses for mentors
Seven skills with short practice, then a 20-question exam.
Guides for mentors and mentees
Research-based guides, a deck for every tool, and decks for your program.
Add your badge to LinkedIn
Pass the exam and share the badge page, valid for two years.
Sources
The research behind this presentation
- Hellmann, T. & Wasserman, N. (2017) The First Deal: The Division of Founder Equity in New Ventures Management Science, 63(8), 2647-2666
- de Wit, F. R. C., Greer, L. L. & Jehn, K. A. (2012) The paradox of intragroup conflict: A meta-analysis Journal of Applied Psychology, 97(2), 360-390
- Jehn, K. A. & Mannix, E. A. (2001) The dynamic nature of conflict: A longitudinal study of intragroup conflict and group performance Academy of Management Journal, 44(2), 238-251
Write it down this month
Settle roles, decisions, equity and leaving while you still agree.