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This, seriously. The reality is that you're leaving a company that has /no value/. It may have a number of pieces to get to value, but you're nowhere yet. Sometime, in the future, some set of pieces may come together that will give this company value; but they don't exist now.

( When I say value, I don't just mean profit; if you can't merge with another company in the space, or sell your code to another company in the space... No value.)

If it's just time and sweat to get to value, then don't leave! Take a vacation. Come back ready to make it work.

If it's time and sweat + some set of technology and business process innovations = value, then allow the cofounder who sticks with it to reap their reward, while you reap a different reward for different work.

> The reality is that you're leaving a company that has /no value/

From the sound of it, that's probably not even true...the company actually has negative value. The seed money wasn't given as investment, it was a loan. It doesn't sound like they've been able to create $10k of value to offset the liability of the loan. If the poster is able to walk away without having to pay back their share of that loan, they should probably count themselves lucky.

Can't +1 this enough. When I left that company back then, they compensated me with 5k for my equity, which would have been worth 50k and potentially much much more at an exit. However mad I was about it back then, it cleared up my mind by being an end to something and let me focus on something new. Just 2 years later, I'm cofounder of something great and that former company is falling apart. My 5k might have been the only equity being paid out from that company ever and it paid the bed I'm sleeping on every day. Take the high road and the long view.

I too received $5k for my 15% of a startup (I came on after the tech cofounder left, and took over that role but 90% of my time was development as opposed to truly CTO-level work). At the time felt it was a pittance given the number of hours I had put in, and from an hourly rate perspective it probably was, but the company was never profitable and was operating solely on the founder's capital.

As is the case 95+% of the time, the company closed a year or two later, as far as I know having never made a profit.

Exactly! I haven't heard of any companies in this stage that loose a cofounder and then become successful. Until you get to product market fit, the company is worth pretty much nothing.

If you want your cofounders to have at least a shot, giving them your equity in exchange of some small amount sounds the more reasonable and civilized way to go.

I wish I had of read this when I was in a similar position. I would still have my best friend.

Send them an apology with a link to this comment, and you may still. (Personally, I found your comment heart breaking, and I hope you can mend the relationship.)

Great idea, though maybe leave out the link.

If it hasn't been very long, but still long enough for them to get some space and perspective, then I second scott_s' advice. They might feel the same way, and you might come back together stronger than you were before.

If it's been too long, I think it's still worth a shot, but you're more likely to have a cordial but somewhat distant relationship rather than a return to best-friendship.

You also need to realize that should anything successful come out of the startup your contribution will be almost negligible compared to all of the work that goes in from this point.

I had an amiable co-founder breakup, and he still has a percentage of the company, but every day the proportion of the work that was done with that former co-founder grows smaller. We're kind of the same idea, but definitely not the same product, about 10 iterations further, an entire team of people who have been working nonstop for a year, millions of dollars of money risked, etc. I still am grateful for the work he put in, but it's now a tiny, tiny piece of the overall puzzle...

It just takes so much to be successful that the "idea" can't be worth much.

I still plan on hooking my former cofounder up if/when we have an exit, but recognize that if you take a large percentage it will make every aspect of the company incredibly difficult, especially when it comes to fundraising.

Very well said. Particularly when first starting out career-wise, the time and effort spent on something like this appear disproportionately large.

Though ... remembering myself when I was first starting out - this advise will be likely be hard to accept and act on.

Solid advice with one exception: you may not be able to make a deal that makes your cofounder happy.

Even if you're as nice as you can be, make good, on promises, etc, you may still end up being "the bad guy." Emotion is the enemy of rational thinking and there's going to be a lot of emotion here given the commingling of your personal and business investments.

You have to evaluate your behavior on the clarity of your own conscience, not on the communicated perceptions of the other party.

Maybe OP's co-founder should see this thread, too.

Agree with this strongly. If situation is that complex, both parties will have to go meta to resolve it - look at it from above, realize the tangled mess of emotions and expectations they're in and that no one wishes the other anything bad, that it's just hard to let go.

In my experience, it's hard to go meta together, but if you can successfully communicate: "I'm on your side, lets ascend together and look at it from far above", you both win.

Great post.

The only add I can include is; what good is fighting hard for a piece of nothing? You aren't going to milk much out of this as it is.

Stay on good terms! Maybe the idea isn't there yet, maybe it will blow up in 5 years. What if its the next Facebook? Do you want to be remembered as the asshole who fought over a couple thousand dollars in the beginning or someone fondly remembered, well connected with the owners of the new Facebook? :D