My co-founder wants to bring his wife as a late joining co-founder | Hacker News Reader

My co-founder wants to bring his wife as a late joining co-founder

69 pointsHaowenJohnWei70 comments

In 2020 (I was sophomore student in undergrad school), a close friend and I, then undergraduates, developed software now used by several research labs, particularly in the neurotech field. As a second-year master's student about to begin a PhD, and my friend a second-year PhD student, we've been the primary contributors (99% of the codebase) to this project. Over the years, we've also recruited new students to our team.

Recently, a month ago, we welcomed a new research assistant into our group. Subsequently, she and my friend started a personal relationship and are planning to marry. Amidst this, we began preparing for a venture competition submission. She has indeed contributed significantly, facilitating discussions with other companies and forming some partnerships, though often with my friend's involvement. My co-founder now proposes to grant her co-founder status with over 10% equity.

I'm concerned about the fairness of this decision to other team members who have been with us for over a year, contributing significantly to our project. Additionally, I feel somewhat sidelined, as my friend and the new member often reach consensus without involving me in the preliminary discussions.

I seek advice on handling this situation, especially regarding the proposed equity distribution and the changing team dynamics. How can I address these issues while maintaining both our professional relationships and the startup's integrity?

Thank you.

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> I'm concerned about the fairness of this decision to other team members who have been with us for over a year, contributing significantly to our project. Additionally, I feel somewhat sidelined, as my friend and the new member often reach consensus without involving me in the preliminary discussions.

Literally just say that to them. You said they're a close friend, so you should be able to start off with a frank and reasonable discussion about it without beating around the bush. If you somehow can't come to an understanding, then involve a lawyer.

Honestly if I were in your position, I'd be more worried that my close friend and co-founder is already planning to marry someone that they've only been in a relationship with for less than a month. But maybe I'm just ignorant of their culture.

> Honestly if I were in your position, I'd be more worried that my close friend and co-founder is already planning to marry someone that they've only been in a relationship with for less than a month.

Yeah, this is very unusual and could indicate some other "issues" (love-bombing? both sides simply being well-natured but immature?)

Like Elsa said, you can't marry someone you just met.

>Honestly if I were in your position, I'd be more worried that my close friend and >co-founder is already planning to marry someone that they've only been in a >relationship with for less than a month. But maybe I'm just ignorant of their >culture.

This. Not to mention any type of drama this may continue to bring into the workplace.

There's a lot of weird stuff going on here. First of all, someone new joined your lab one month ago and in that month, your friend not only started a personal relationship but even plan to marry? That seems like a red flag to begin with (although to be fair, I know multiple people who got engaged after 2-3 dates and have had long and happy marriages... so not saying that it's a problem, just a red flag).

Second, your co-founder wants to grant co-founder status to his girlfriend. That seems like an odd request. I think I'd be uncomfortable with this even if it was my best friend and he'd been married to his wife for over a decade. There's plenty of things that can go wrong in a startup to begin with, no need to add the possibility of divorce and other relationship issues to the mix.

Finally, they "often reach consensus without involving me in the preliminary discussions"? That's very odd, assuming that you and your friend have roughly equal shares of equity. I personally would shy away from partnering with two romantically involved people, but at the very least, I'd want to feel like I'm not being crowded out and having decisions made behind my back.

This is a terrible idea, and already bearing fruits of disrespect. Once they get married, they're going to answer to each other, and treat you as a "3rd" wheel. A lot of times (not even trying to be sexist), the opposite gender have power over us through love and intimacy that can blind us from logic; this can affect family, friendships, and sense of self in being an autonomous person.

Worst case scenario, you piss off the incumbent employees (which could cause them to go elsewhere, where their contributions are respected, and further down the line you wield no power as it's 2 of them vs you.

You need to be steadfast in your resolve, and have a private conversation with your friend and cofounder talking about these things. Stressing that although love is a beautiful thing, it's not always permanent and to focus on yourself, and what you've built first. It does sound like she has been contributing, but adding her as a co-founder with equity like that, is just his pants speaking.

Draw boundaries, and stand tall. Propose the following, if he wants her to have equity.. maybe he can sequester some of his to her? After all, they're gonna be married soon right :^)?

>>> month ago, we welcomed a new research assistant into our group. Subsequently, she and my friend started a personal relationship and are planning to marry

This seems rather quick.

Would you hire her at 10% if she weren't sleeping with a co-founder? You could suggest to your co-founder that he give her some of his equity.

https://www.gannons.co.uk/insights/good-leaver-and-bad-leave...

As other said, he doesn't just want to give 10%, he wants you to give 5%.

Getting a cofounder is like getting into a marriage, you should be able to discuss this with your cofounder and explain plainly the issues you're seeing.

> As other said, he doesn't just want to give 10%, he wants you to give 5%.

Another way of framing this is that the co-founder wants OP to just grant him control of the company by switching from the original 50-50 arrangement to a 45-55 arrangement.

It sounds like even without the 10%, this already creates an unfair (harassment?) environment for other team members. Even without equity being assigned, the message to your team is "if you manage to become a serious romantic partner or fiancee of one of the founders, you get greater influence and involvement in making important decisions."

If someone is willing to sell themselves out by becoming a high end call girl/boy, my main feeling towards them is pity rather than jealousy. I am not implying that's going on in this case, work is also a natural place to get to know someone well.

Work is a natural place to get to know someone, but forming romantic relationships with superiors or subordinates is a minefield, and can be bad for people _other_ than those forming the relationship. Even if no one is "sell(ing) themselves out" (e.g. feelings on both sides are authentic and mutual) for any employee who's been there longer and _doesn't_ have the level of access/involvement as the new fiancee, they're still effectively getting less high level work in part because they didn't form a romantic pairing with their superior.

If the marriage is actually going to happen, one of them should work elsewhere. Possibly already enough damage has been done, and one of them should work elsewhere. If their relationship is strong, it will still be strong if they're not also co-founders. If their marriage is going to last the test of time, they may be better off not having both their careers in one company basket. And team members should not need to constantly second guess whether their advancement is dependent on their work or the degree of intimacy of their relationship with their founders.

Your friend can give her the 10% from his own equity. Simple as.

That makes sense to me. And if he is concerned about the people who have put a year of their lives into the success of the business, they can each also give 5% of their equity (10% total) to the longstanding members of the team, so it goes:

OP: 45%

Partner: 35%

Partner's wife: 10%

Team: 10%.

That way the balance remains equal and the team has the final call when there is a deadlock.

Exactly. Feels like this is more a not so clever push to dilute the OP’s ownership more than any reward of effort. Happily married couples will always vote as a block and basically benefit together. My guess is that if the founder %’s are close and they don’t always agree, this is a way to grab control.

No.

There is no way for this to go forward without creating problems for everyone. You need to talk to your cofounder about the long run issues they are going to create.

Get a lawyer and come up with a partnership agreement that will work for everyone.

Multiple lawyers maybe. Since people aren't agreeing, they might need their own separate lawyers.

Lawyer. Lawyer lawyer lawyer. This is the only answer. You don't need to go in guns blazing, but you do need good legal counsel even before you talk to your business partner. A lawyer will be able to tell you your rights, what you don't have rights to (even more important), and the probable result of various courses of action. You will also have much more confidence when it comes time to have the discussion, because you have gotten help and will understand the situation a lot more clearly. Seriously: GET. A. LAWYER.

I agree with this. If she's adding value and her input is worth her place on the cap table then it should be easy to resolve.

You do need to think carefully about what a breakup would look like. Relationships can go sour and if that happened what would the arrangement be if they couldn't work together.

Also, who makes the decisions? Does her allocation give them both a majority of voting rights?

It's not a typical arrangement, that doesn't mean it can't work but your co-founder has added complexity into the process.

It's pretty rare to give someone 10%+ equity after a business has been operating for several years. Even if you brought on a professional CEO, I wouldn't expect to see that. I've seen some founders put together special agreements to transfer some of their own shares to a person recognizing that they'll be taking over a big part of their own role and that it wouldn't be fair to dilute the rest of the company.

Regardless of what you do, make sure there is a vesting schedule in place (e.g. a 4 year vest + 1 year cliff).

good news! By marrying them your cofounder is already giving them 50% of their equity, and you don’t have to do a thing.

get a lawyer.

What about if they divorce, does his next wife get 10% too?

Split his shares in two?

While not in a business, here's my experience:

When I was young, I rented a house with what I thought were good friends. One friend wanted to bring his gf. We were friends, so I said sure. Turns out, both couples alienated me beyond my comprehension. They weren't mean, I just didn't exist as they tended to each other.

One couple I stayed friends with, the second didn't fare so well.

The moral of my story is that the dynamics will change, and you are the odd one out. Best of luck!

I’d delete this, especially as it has your name, and have this conversation with both of them.

If she’s supposed to be part of your founding team, this is something you should be able to work through.

If you can’t come to an agreement, be glad you found out now rather than in a year or two

Giving your friend 5% of your equity is an awfully nice wedding present.

There are several issues here:

1) Having a relationship with a subordinate is not normal today. Planning to marry a subordinate that one has been dating for only a few weeks isn't normal at all. Your co-founder's behavior with a new employee opens your company up to harassment lawsuits by his fiance if the relationship fails, and by other employees whatever happens to that relationship.

2) Being a co-founder wouldn't give her the right to make decisions for the company. It's a label, not a meaningful legal title.

3) She is not a co-founder and should not be made one if the business already exists as a legal entity. You can consider bringing her on a a high-level employee/executive, since it sounds like she has already done executive-level tasks like bringing in partnerships, but that is something you need to discuss with a lawyer.

3) Your co-founder and fiance already making decisions without you is a huge red flag, and it is likely that after they marry they will formally push you out of the company. She is not a co-founder, or executive, or even a long-term employee. She's literally someone he met a few weeks ago. She shouldn't be involved in decision-making at all.

There's a lot of missing information here that can change things.

* Have y'all formed a corporation already? * What sort of equity split did you decide in the early days and do you have it in writing? * Did you have equity splits for the other students that helped?

It's probably best to work through an equity conversation for everyone whose contributed and not treat your friend's wife as a special case. If indeed, her contribution was significantly more, then it would make sense for her to have more equity than others once you establish the company, if you haven't already. Also note, that if you don't already have a vesting schedule you should institute one, not only for yourself but all the employees. You can potentially backdate that to the "start date" for each individual.

As for founder status, if you do end up determining that her fair equity split is significant portion of the company, it may be warranted.

All of the above probably requires a lawyer to do incorporation, write equity vesting policy, etc.

Anecdata... I was having good talks with an early startup founded by a couple and a third person.

They all were smart and nice and capable and experienced, and I was leaning towards joining. Though I was a little wary that they were all friends and I'd probably be a non-founder, and aware that usually a couple-like imbalance of power/relationship among the co-founders can be tricky. (I've seen this in detail elsewhere.)

(Relevant background: I'm probably best right now as a technical cofounder who'd solo build the MVP software and infra, and then switch to building&leading engineering as the company grows. But I was also open to being a founding engineer, with the right team and arrangement.)

After the good meetings with the team, for further diligence, I had an extended one-on-one with the third person, on what they'd already built, architecture, and their roadmap for the next year or so, and also to get more familiar with each other.

After talking, I indicated that it looked like the third fo-co-founder had everything covered, and didn't actually need me. Then this third co-founder was speaking more candidly, and indicated that they wanted to herd junior developers to do what remained. My impression was that the co-founders weren't in-sync on hiring someone like me, so I decided to leave things at letting the co-founders regroup.

Speculation: Since I'd found them through a strong personal referral, it might've been a "hire of opportunity", rather than a kind of hiring they'd all decided beforehand that they needed right now. And if the referral came in through a contact of the couple co-founders, it's possible that was an edge case in which a dynamic of two co-founders who're especially close -- no matter how conscientious -- might've inadvertently resulted in the third co-founder having been less in the loop in that instance, and railroaded by circumstances.

I think that particular exceptionally good team will figure out whatever comes their way. But startups are all about learning, and there will be learning opportunities even around things you know and had handled.

Wow! Your co-founder is complete moron!

They've been seeing each other for less than a month? And he wants to marry her and give her 10% of the company you've been spending 4 years to build, half of it coming from you?

Do you realize the lack of judgment of that person? Do you realize that he's ready to screw you over for a girl he met 4 weeks ago. Do you really want to have him involved in high level decisions regarding your own future.

The answer is obviously no to you giving away anything. If I were you, I'd keep my equity stake as it is and run and do something else!

Life is short, and things can be rebuilt. These are MASSIVE red flags that scream that you shouldn't start a business with that person. This whole thing is going to blow up bad at some point, it's so painfully obvious. It might as well be now than in 2 years.

Ugh, sorry about this. This is painful.

Was 50-50 on a startup, co-founder wanted to give me 100% more share in exchange for letting his love one join as co-founder.

Turned it down once I figured out that I would no longer be a controlling owner.

Caveat: pay attention to the backend deals and overall picture.

I think you need to ask the big question: if this person were unconnected with your existing co-founder would you add her as a new co-founder? That includes deciding whether you are comfortable working with her long-term. If not, there's your answer.

There have been cases of married co-founders working out great for everybody. Diane Greene and Mendel Rosenbaum at VMware are a nice example. [0]

[0] https://en.wikipedia.org/wiki/Diane_Greene

Sorry to hear this. This will end in drama.

Work out what drama is acceptable to you and work towards that. This will get ugly.

Your partner clearly makes quick penis driven decisions for good own benefit. This can’t work.

No problem, he can give her 10% of his share. Otherwise no way.

The problem you're describing is incredibly common—so much so that I'd say it's the vast majority of startups. Some details might be different but the overall shape is the same.

There are a few principles that I think can be helpful here:

1. The vast, vast majority of work remains to be done, and the vast majority of value your startup will have has not yet accreted. Unless your startup depends on some like critical patent or something I'd wager that 90%+ of the value is yet to be created.

2. At exit, a person's equity ownership in the startup should be roughly proportional to how much they value they helped accrete over the life of the company.

3. The above is the only thing that matters. Opportunity cost, professional reputation, relationship status, prior experience—all of those are irrelevant. The only thing that matters is contribution to the value accumulated by the startup over its lifetime.

Unfortunately, most big equity decisions are taken at the beginning of a company's life, not at the end--where most of the information needed is not known!

Because of that, no matter what you do, you will probably end up with something that is significantly far from optimal. There's just not enough information. Tough luck, them's the breaks, that's the price of success.

However, there are a few things you can do now to help guide the process:

1. Agree, explicitly, to the above principles. That is key.

2. Agree, explicitly, to everyone's role and responsibilities over the next year.

3. Given the above, distribute equity in a way that is simple, broadly aligned with the stated principles, and probably over-indexing on "fairness" than accuracy. It's better to make other people a bit richer than they "deserved" and be happy than the opposite.

4. Make sure that everyone's equity has a vesting schedule. The longer the better. 4 years is standard but honestly a bit too short when in the current world startups exit after 10+ years.

5. So that might look (at very first approximation) like you and your cofounder starting with 35% each and your new cofounder with 30%, or 40-40-20, or something like that.

5. Get to work.

Good luck!

You should think of what’s best for the success of the startup, pushing all emotional thoughts aside. Is she bringing value that warrants 10%? Is there a vesting schedule versus just giving her equity? Do you cede anything other than equity by the proposed change? If you have equity already you could just walk away and allow them to build your business for you.

You mention that you're both PhD-ish-level students, and that she's a research assistants. Is she also a PhD candidate? Or is this an undergrad intern type person?

I would suggest that unless she is bringing unique talents to the team, she would not get cofounder status and anywhere near that amount of equity — especially if others have been laboring away without so much equity.

If you do give any equity, make sure it's on a vesting schedule, and with the usual 1 year cliff. Then make sure that you have the power to dismiss her without needing your cofounder's vote. Obviously he has a conflict of interest and would be hard pressed to fire his wife (and have them lose equity as a couple).

You can frame this as a general rule that anyone with a conflict of interest does not vote on such matters. This honestly would also protect her in the event that she contributes a lot to the business but has a falling out with your cofounder. She wouldn't want him to be able to fire her out of spite.

Who is the majority owner?

If you are 50/50, you should create a milestone plan. After the milestones are hit, she begins vesting.

Delete this. Tell him if they marry they can just have a shared bank account, if he insists, get a lawyer involved.

Given the amount of time, I would ask for a minimum of a year before making that decision. Moving into a marriage after a month is romantic, but not reasonable, and making someone a co-founder after a month is not reasonable. (In my opinion.) At a month, they may not have even had their first fight. You've been at this for more than 3 years, and this person is interested in a stake after 1 month?

Another way to look at this involvement: Imagine you hired a consultant do some work for you and they made significant contributions, connected you with some companies, and formed some partnership. Does that person merit the same benefit?

If the issue is pushed further, I'd strongly recommend talking to a lawyer privately. And make sure that lawyer represents your interests and the company's interests.

I don't see any issue with her being granted cofounder status if it is warranted. You just need to work out her equity share. That's more important than her status. It needs to be in line with her importance and the importance of other people working on this. Although if you have a shipping product in the wild this is really odd (unless you don't make money and have no business model).

If the only reason she is being given cofounder status and all this equity is because they are banging and your friend is horny, you either need to step in and tell them no or leave.

I am concerned that two of your cofounders are engaged in a new romantic relationship. The fact that they are already talking about marriage says a lot about how unseriously they are taking everything.

As we say: run from there my friend!

No, no!! And if you think again, no!!

I saw ruined my dreamed company because almost the same situation (co founder flirting and engaging with a worker), everything was destroyed then.

It took me 2 years to recover from depression and then I had no company, no friend and no workers.

NFW!!

Well, you can't have a mom and pop business without mom and pop. If this is going to be a small close knit company, having spouses join can be a stabilizing influence - less arguments about sacrificing personal time for work sprints, less affairs at work, more collaboration. If you want a shark tank with no consideration for personal life, you can find one, but then they can also fire you in cold blood when you can least afford it. Seems like a question of what kind of venture you want to be, to which there is no single right answer. How sure are you that equity is going to be any good in any case, do you have any realistic prospects of being acquired or going public?

you should use a throwaway account without your name so as to not impact your company

It takes more than a month to get to know someone. This person is a stranger to both you and your cofounder. Red flags all over this. As another commenter noted, check out “love bombing”.

See also NRE - New Relationship Energy, which without some major self-awareness now has the very present potential to sink the relationships the founders had.

He's welcome to offer her equity from his share(s).

Acknowledge the specific problem in front of you but also generalize: nepotism is bad, and nobody wants to work at a family firm. Create new nepotism rules going forward. “Grandfather” in the wife’s current status on current projects, but make it clear she won’t have a favored position on new projects.

Make it clear any equity to the wife will come from her husband.

Sorry, this seems pretty fucked. Marrying a subordinate as a founder is inappropriate. In my opinion she should not work there if they are marrying, let alone get upgraded to a cofounder. As a married couple their finances are unified. Effectively this is a way to rob you of your equity, an interesting alternative way to dilute you.

Everyone else is talking about the obvious red flags of the relationship.

What about the fact that within a month someone new could contribute so significantly to your years-long business as to be worth 10% of it? That would make me ask a lot of questions about the value of the business and the value of everyone's contributions to it.

Seems like you have the power of saying "NO" but you are being non-confrontational.

Just be firm and say NO. Be professional about it. Get a Lawyer and be prepared.

Prioritize the company over this personal drama.

If she is indeed proving to be worth 10%, and contributing to an exponential growth then give it time and assess the situation in an year.

You're about to get screwed. I'm sorry, the future is going to get difficult for at least one person.

It's already dangerous to bring family members into business; it's even more concerning to bring a partner's family in. I think you should set boundaries and let them know of your concern and basically refuse the deal.

I wonder if at my medical institution a new research assistant would get 10% equity in the the lab that two other Senior researchers run. Would they justify that by saying well they've helped us with forming partnerships.

It's clearly wrong, and it will be a nightmare down the road, period. So you know the path to take even if it's meant to break the relationship or the company. There goes your negotiation skill 101.

Buried already. Maybe because more comments than upvotes.

In my experience, whenever relationships get involved in business, things go sideways fast. You should definitely fight this, as other people have mentioned, get a lawyer.

You'll get a lot of misguided advice on an app like this. At the early days of a startup you need people who care, who will find a way to succeed despite the odds, who will stick around even if it doesn't make economic sense for them. Friends, family are often some of the best people to work with. (if, its an important if, if they are excellent)

I would only be upset about this if people who have a personal relationship are held to a lower bar. The bar should be higher for them to avoid any doubt about favoritism.

In your case the real question is not their personal relationship, its more about if the team is excellent and if you trust them.

> Friends, family are often some of the best people to work with.

The person in question joined the group a month ago and the “plan to marry” happened after that, according to the OP.

This isn’t a long term, trusted friend. It’s someone who showed up a matter of weeks ago.

I've known people who have decided to not be a third co-founder because of situations like the other two being brothers. The simple reality is that that no matter how professional people try to be, and how high the bar is, that someone is always going to be the third wheel in a situation like that.

Also, in this case the OP mentions that they are already making decisions without him. If you've had a co-founder for years, there is no world in which it's OK to make decisions without them with someone you met 1 month ago.

You don't even need to factor in the personal relationship for this to be sketchy.

Sounds like true love and you can't put a price on that.

Why stop at 10% ?

Seems like a nightmare.

It sounds like the two of them want to have a majority position to be able to make decisions without you.

"Is nepotism really the way we want to run this company? Why doesn't she vest like the rest of the employees?"

I would maybe be more gentle, but not saying a version of this will hide the biggest issue, which is the blatant nepotism.

Who says she isn't vesting? The standard is that even 50/50 cofounders have a vesting schedule.

I guess you could grant the equity on a standard vesting schedule with a 1-year cliff, but would your co-founder be comfortable firing her if it doesn't work out? You could also try more creative arrangements like performance-based equity tranche releases but I'd guess she'll find that insulting.

I personally wouldn't accept it, it dilutes your team's equity and opens up a huge can of worms around conflict resolution, and founder conflicts kill companies. I would think of this as-if your cofounder is asking for an additional 10% on his or her stake, because that's de facto what it's going to be. Your cofounder frankly also hardly knows this woman despite the fact that he or she rushed into marriage.

Just show him the comments in this thread.

Cliff of 1 year and vesting period of 4 years

If this was me, I would tell him to take her 10% out of his 50% because they will be acting as a unit and constantly overriding you if they have majority control of the company. It's really bad news. If he doesn't want to do that then tell him to pound sand, share structure is not changing and be prepared for this enterprise to eat it before it even takes off (It is generally better for things like this to be stillborn rather than die five years down the line when you are older and less able to start over/take risks because you are further along in your personal life cycle).

kindly update us on how this all works out. dios mio i need a popcorn. i wish you well OP, dont let your time and efforts go to waste.

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